In the Principal-Agent Model, what do principals desire?

In the Principal-Agent Model, principals typically seek to control the bureaucracy to ensure that their preferences and objectives are met effectively. Principals, who can be thought of as elected officials or higher-level managers in an organization, delegate tasks to agents, who are tasked with carrying out these objectives.

This desire for control stems from the inherent issues that arise in delegating responsibility. Agents may have different interests, levels of information, or priorities than those of the principals. To align the actions and decisions of agents with their own goals, principals implement mechanisms of oversight and accountability. This could involve setting clear policies, establishing performance metrics, and providing incentives to ensure that agents act in a manner consistent with the principals' objectives.

Understanding this dynamic highlights the importance of governance structures and the need for effective communication between principals and agents to minimize conflicts and achieve desired outcomes in bureaucratic settings.