Jay Cost | Our Masters, the Bureaucrats

With so many scandals swirling around the Obama administration, it is hard to identify which is the most politically damaging for the president. But there’s no doubt which one should trouble constitutionalists the most. The Internal Revenue Service’s targeting of conservative groups raises core questions about the nature of our government that the public has ignored for generations. It’s high time to revisit the issue of how the people can maintain control over those who are supposed to do their business.

Political scientists and economists have identified the “principal-agent problem” that rational actors face when trying to outsource management of their affairs. How can a “principal” induce her “agent” to work for her interests rather than his own? The Constitution is an attempt to manage the principal-agent problem in a republic, though the Founders didn’t understand it in those terms. The founding document institutes a system of checks and balances to ensure that elected officials work on behalf of the people, rather than themselves.

Yet the Constitution barely touches upon the bureaucracy, the modern version of which the Founders couldn’t have imagined. It merely empowers Congress to create executive departments and charges the president to make sure the laws are faithfully executed. This gives little direction, as the Framers—like most republican thinkers of their day—were more interested in the relationship of the three main branches of government to each other and to the people. It would be up to later generations of Americans to fill in the gaps, and they struggled for a century to find a reasonable organizational scheme for the civil service.

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