Social control of public expenditures in a multilevel principal-agent approach

Abstract

This study enhances the principal-agent model by incorporating a multilevel perspective and differences among agency situations. A theoretical discussion is developed using a proposed intersection of methodological focuses and a descriptive-exemplificative hypothetical analysis. The analysis is applied to public expenditure social control in representative democracies, and as a result, a principal-agent model unfolds that incorporates a decision-making perspective and focuses on formulation, negotiation, articulation, and implementation competencies. Thus, it is possible to incorporate elements into the principal-agent model to make it more permeable to individual, group, and societal idiosyncrasies with respect to public expenditure social control.

The financial performance of private hospitals in Saudi Arabia: An investigation into the role of internal control and financial accountability

“…This asymmetry can lead to opportunistic behaviour due to one party having more information than the other. In the principal-agent relationship, the agent has an obligation to the principal, but also has a duty to their own interests [ 38 ]. Since the principal cannot fully observe the agent’s effort level, the agent may not be motivated to maximize the benefits for the principal.…”