Polity Atlas
EstablishedSource attached · not independently reviewedCLM-0595 · as of 2026-10-27 · about: Principal–agent theory of government · Author: Polity Atlas editorial team

“Jensen and Meckling formalised agency costs as the sum of the principal's monitoring expenditures, the agent's bonding expenditures and the residual loss from divergence between the agent's decisions and those that would maximise the principal's welfare.”

Evidence that supports

2

Evidence that contradicts

0

No counter-evidence recorded.

Context

The Economic Theory of Agency: The Principal's Problem

The New Economics of Organization

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