Delegation
From Wikipedia, the free encyclopedia
It is the assignment of authority and responsibility to another person (normally from a manager to a subordinate) to carry out specific activities. However the person who delegated the work remains accountable for the outcome of the delegate work. It allows a subordinate to make decisions, i.e. it is a shift of decision-making authority from one organizational level to a lower one. Delegation, if properly done, is not abdication. The opposite of effective delegation is micromanagement, where a manager provides too much input, direction, and review of 'delegated' work.
Contents |
[edit] Delegation Theories
types of delegation
- Allocating authority to issue orders.
- Entrusting tasks to subordinates.
- Allocating decision making in defined areas.
Several theories stemming from economics and politics have sought to explain delegation, both in terms of why it is undertaken in the first instance and how it functions.
[edit] Principal - Agent Theory
Principal-Agent theory conceives of delegation as involving firstly a 'principal' who for a particular reason decides to delegate authority over a particular policy area (for example) to another actor or organisation - the 'agent'. It is generally conceived of as more of a framework than a predictive theory and it incorporates a wide variety of forms. Generally speaking there have been two areas of primary focus, firstly that concerned with 'agency loss' which roughly corresponds to the extent to which decisions/policy outcomes arrived at by the agent differ from the goals of the principal. This in turn leads to theories concerning how to minimise agency loss whilst maintaining the benefits of delegation. Such theories tend to emphasise the use of ex ante and ex post controls which can help ensure compliance, though every principal-agent approach stresses that principals and agents always have separate interests and as such a beneficial delegation will always result in some element of agency loss.
Secondly there is the focus on 'informational asymmetries' whereby the agent is assumed to possess an advantage in terms of expertise in the particular area which it is delegated authority in. For instance if a local government decided to delegate refuse collection to a private firm, after a suitable amount of time the private firm would possess expertise in this area that would put it in an advantageous position relative to the principal. As such the agent could use this informational advantage to shape the relations between themselves and the principal to achieve more favourable outcomes - for instance the principal in this example may not know exactly how much funds are required to carry out the task of refuse collection effectively and will rely on the agent to provide them with this information, as such the agent is given the opportunity to extract more funds than is necessary to carry out the task.
[edit] Carltona Principle
Used by the UK civil service. In summary the principle supports delegation of authority but not responsibility.
Section 1 of the civil service act 1992 allows delegation to take place, but limits the powers to do so in three ways -
- the functions to be delegated must be management functions;
- they must have been the subject of Transfer of Functions Orders; and
- they must relate to the management of the Civil Service.
Most delegations are made under this section of the Act. However for the minority of civil servants whose terms and conditions of service are determined under powers in primary legislation which govern the organisations in which they work Section 2 of the ACt applies. The statutes in these cases usually require Ministers and statutory office holders to obtain the consent of the Minister for the Civil Service to the terms and conditions of their staff. The Civil Service (Management Functions) Act 1992 allows the Minister for the Civil Service to authorise the exercise of these powers without his consent. The policy has been to delegate to Ministers who can then authorise an official (e.g. Permanent Secretary, Chief Executive) to exercise the function in his name under the Carltona principle.
The Principle allows a person in whom a power is vested to authorise another person to exercise that power for and on his or her behalf. It is essential to note at the outset that a person exercising a power for and on behalf of another does so as the ‘agent’ or ‘alter ego’ of the person in whom the power is vested. That is, the act of the authorised person is, at law, the act of the person in whom the power is vested. This is fundamentally different from the act of a delegate which, at law, is the delegate’s and not the delegator’s act.
The case most often cited as authority for the proposition that a person may authorise another to exercise a power for and on his or her behalf is Carltona Ltd v Commissioners of Works 1943. This was a wartime case dealing with the requisition by the Government of a factory which manufactured food products. In Carltona, the English Court of Appeal considered whether a Minister had to exercise personally a power to take possession of land, or whether the power could be exercised by one of the Minister’s departmental officials for and on behalf of the Minister.
The court concluded that the power in question could be exercised by a departmental official for and on behalf of the Minister. The court’s reasoning indicates that there are two grounds which justify a Minister being able to authorise an officer to exercise a power vested in the Minister -
the Minister is ultimately responsible to Parliament for the decision of an authorised officer; and in modern government, Ministers have so many functions and powers that administrative necessity dictates that they act through duly authorised officers.
[edit] Delegation as a credible commitment
This section of the literature has purported to explain delegation as a solution to the problem of 'credible commitments'. In short this states that in certain situations an actor will choose to delegate authority to another actor or organisation in order to constrain their own behaviour and provide credibility to a particular obligation they have entered into. To give one of the sillier examples present in the literature there is that of three blind men left alone in a room with a cake. They all enter into a pact that none of them will eat the cake, but as nobody is capable of enforcing this agreement they decide to delegate authority to one of their friends who can watch over them to ensure nobody breaks their commitment and sneaks off with a slice. In this way delegating authority is seen as overcoming collective action problems.
This theory has been applied most prominently in the context of democratic pressures which impact on a government's ability to uphold international agreements. Two factors are seen as causing this problem, firstly the problem of 'time inconsistency' whereby what is the best short-term solution to a problem may be different from the optimal long-term solution. In this instance a government may agree to carry out the long term course of action, but when faced with the pressures of winning an election will resort to the short term course of action which undermines the agreement. To overcome this problem the government will delegate authority to an actor or organisation so as to ensure that the correct long term policy is carried out even when it is not electorally desirable. Secondly there is the problem of 'political property rights' which refers to the fact that as democracies have the potential to replace one government with another government who support opposing policies, the agreements made by one government must be somehow enforced by an independent authority so that they constrain future governments from breaking them.
[edit] Applications of Delegation Theory
[edit] Independent Central Banks and Non Majoritarian Institutions
One of the most important areas where delegation theories have been applied has been in the debate over the merits of Independent Central Banks (ICBs) such as the Bank of England or the European Central Bank. This debate has corresponded to the theories of credible commitments and can be understood as a solution to problems posed by the two democratic pressure problems mentioned above where monetary policy is concerned. Those in favour of the creation of ICBs have primarily focused on interest rates and have argued that democratic pressures tend to have an inflationary effect as governments will often be tempted to advocate higher interest rates immediately prior to an election so as to manufacture short term booms in the economy and boost their support - but to the detriment of long term economic health. A variant of this argument is that as most democracies incorporate two main parties split on economic policy between left and right, the party of the left winning power will often result in damaging inflation raising policies immediately after the election in an effort to distance itself from the previous government. A solution to these problems has naturally been sought in the creation of an independent institution which can decide interest rates outside of the influence of democratic pressures - the ICB.
This argument has been highly influential and the number of ICBs has risen dramatically since the 1980s however it is not without its critics. Many scholars (for instance Kathleen Mcnamara) have questioned the premisses of the ICB argument, making the case that democratic pressures will not result in high inflation and that high inflation is not inherently bad for the economy long term. Broadly speaking the empirical evidence on these points has tended to be inconclusive for both sides. An alternative criticism has come from certain branches of New institutionalism who have sought to explain the increase in ICBs not by the 'rational' argument outlined above, but as a process of symbolism, where governments will create ICBs because they are seen to be respectable institutions by other actors, particularly by foreign investors who, it is argued, will view a country with an ICB as a modern state worthy of investment.
[edit] The European Union
Delegation theories have also been applied extensively in studies of the European Union. The dominant approach has undoubtedly been the principal-agent approach, but there have also been variations from the classic form by intergovernmentalist approaches and the 'fiduciary' model laid out by Giandomenico Majone.
Andrew Moravcsik is perhaps the most prominent intergovernmentalist theorist who has written on delegation and his work can essentially be thought of as applying the principal-agent model in a manner which stresses minimal agency loss. The model is not a simple principal-agent model however, as he conceives of the EU as delegation on three levels. Firstly there is the delegation from European electorates to national governments (who in this sense act as agents), secondly there is the delegation from national governments (who now act as principals) to European institutions such as the European Commission. Moravcsik has been particularly interested in the informational asymmetries which arise from delegation in the European Union and has argued that whilst there is minimal agency loss between the national governments and the European institutions, the national governments gain significant informational advantages over European electorates which allow them to carry out policies at home which they would not be able to do in the absence of the European Union. In this sense the delegation process strengthens the national governments rather than weakening them (as is traditionally assumed where the European Union is concerned). This has nevertheless been seen as inconsistent by some scholars (for instance Mark Pollack) who take issue with the assertion that informational advantages only allow national governments to gain freedom from European electorates and that the same principle applies with European institutions gaining an advantage over their principals through informational asymmetries.
In contrast Giandomenico Majone has formulated a theory of delegation which stresses the importance of credibility problems in the decision to delegate to European institutions. Not only is this explained as a mechanism to ensure member states comply with treaty obligations, but employing similar logic as that used in the ICB debates he makes a defence against democratic deficit arguments which advocate a directly elected European Commission. Much in the same way as in the ICB debate democratic pressures are seen as impacting negatively on what is a primarily regulatory institution and as such for Majone the Commission should be insulated from democratic pressures if it is to fulfil its functions effectively.
[edit] References
- Fabrizio Gilardi, "The same, but different. Central banks, regulatory agencies,
and the politics of delegation to independent authorities"
- Giandomenico Majone, "Two Logics of Delegation: Agency and Fiduciary Relations in EU Governance" European Union Politics.2001; 2: 103-122
- Kathleen Mcnamara, "Rational Fictions: Central Bank Independence and the Social Logic of Delegation" West European Politics, 25 (1)
- Andrew Moravcsik, "The Choice for Europe"
