Question 4_Solutions - Are there inherent risks in any...

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Are there inherent risks in any principal-agent relationship? 1. Greed: Rationality principle: all political behavior has a purpose and people weigh costs and benefits of decisions. Example of problem Congressperson lobbies the EPA not to enforce standards on a political donor. 2. No sociological representation (extent that makeup of agents represents that of the principals) Very few minority agents for instance 1 black senator (Obama) when blacks make up 12% of pop. And 2 Hispanic Senators when they make up 12.5% of population. 3. Divided agents Gerrymandering state legislatures draw up Congressional districts to make political gains and don’t necessarily keep neighborhoods with similar values intact. 4. Professional legislatures Congressmen have a 95% re-election rate, because of benefits of incumbency like free media, ability to provide pork for district, and franking privilege. a) Hard for women or minorities to break through the glass ceiling. What are the best ways of assuring that agents follow the principal’s instructions?
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This homework help was uploaded on 02/20/2009 for the course GOVT 111 taught by Professor Lowi during the Fall '08 term at Cornell University (Engineering School).

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Question 4_Solutions - Are there inherent risks in any...

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