公共部門의 資源配分과 主人-代理人(principal-agent)問題

Resource Allocation in the Public Sector and Principal-Agent Problem

This paper applies the standard principal-agent framework to the public sector in order to investigate the optima) retrospective voting rule that minimizes agency costs politicians rent seeking activities give rise to. While existing literature considered voters who have incomplete information only on politician’s behavior, we analyzes more ewalistic voters who have incomplete information on politician’s characteristics as well. Voter’ welfare level achieved by the optimal voting rule indicates that carrots and sticks to politician are needed to raise effectiveness of reelection incentive. It is dlso shown that retrospective voting mechanism can sort out good politicians although complete sorting is not possible.