Agency Problems in Public Sector Labor Relations Conant, John L.

In "Agency Problems in Public Sector labor Relations," John L. Conant examines government unionism from the perspective of agency theory. He observes that, in essence, workers "hire" unions while citizens "hire" politicians to act as their agents and give them significant managerial discretion to pursue their own subjective agendas. Consequently, economic inefficiency in the public sector often occurs when union officers manage to "capture" public officials as their own agents.

Conant reviews the mechanism that makes private sector corporate managers effective agents of the stockholders and the control devices within the public sector that create significant agency problems. He discusses the mechanisms that enable union agents to "capture" public managers as their own agents and proposes alternatives in the form of property rights and contractual provisions for correcting the situation. It is his hope that such alternatives will help provide public officials with the incentives some may require in order to act in the best interests of the people that they are elected to represent.