Principal-agent problem meets the public sector

posted by
September 19, 2011
Foundation for Economic Education
by Fred Smith and Jacqueline Otto  
Posted in Commentary

"What works for business should work for government, right? Not necessarily. Law professors Frederick Tung of Boston University and M. Todd Henderson of the University of Chicago recently asked that question about the banking industry. They propose that bank regulators should receive incentive pay linked to banks’ performance. They argue that giving regulators a stake in the success of the firms they regulate will motivate them to make better decisions." (09/19/11)  

Our Sponsors