The principal-agent problem in administration refers to:
- undertraining
- shortage of administrators
- unconstitutional acts
- divergent interests of principals and agents
Show answer and solution
Correct answer: D. divergent interests of principals and agents
1. Principal (elected officials, citizens) hires agent (bureaucracy).
2. Agent may pursue own goals due to information asymmetry.
3. Solutions: monitoring, incentives, transparency.
__Source: syllabus Political Theory — administrative theory__