Fiduciary Rationality and Public Policy: The Theory of Agency and Some Consequences

This paper introduces the theory of agency, identifies key concepts, relationships, and logics of agency. Norms of agency are identified and discussed, including the fiduciary norm. Problems of agency are identified and discussed. Applications of agency theory are made to regulation, the legislative representative, and diplomacy.This 1973 paper was the first to identify many of the central concepts and logics associated with the theory of agency and was the first to make applications to social institutions. This paper and Stephen Ross's 1973 paper were the first to explicitly propose agency theory, and this paper was also the first to develop the approach in an extended way. This paper is posted in order to make it generally available to scholars interested in the theory of agency.