Agency Problems and the Politics of Administrative Reorganization

Abstract

While scholars have long argued that political uncertainty leads governments to enact organizational structures that insulate agencies from future control by opposing groups, they have paid less attention to what governments can do to cleanse agencies from past insulation efforts. In this paper, I argue that governments often reorganize their bureaucracies precisely to ameliorate the agency problems that past governments have imposed upon them. To illustrate the principal lines of argument, I trace the lifecycles of all agencies in the Swedish executive administration between 1960 and 2014 and show that they suffer considerably greater risk of termination when an ideological opponent of the government is responsible for appointing their heads. Because all agency heads serve on fixed-terms in the Swedish case, all incoming governments are bound to inherit the appointees of their predecessors. However, only in some situations are they bound to inherit the appointees of opposing groups—namely, following partisan shifts in government. I conclude that structural insulation can both deter and encourage political interventions in bureaucratic operations.