Jamal Awil

← The Social Control of Impersonal Trust

Principals often cannot monitor agents despite contracted obligations. [causal]

Fourth, even if they are able to specify the responsibilities of agents, many principals are unable to monitor the performance of contractual commitments. Decedents cannot evaluate whether the executors of their estate truly complied with the stipulations of their wills. Secrecy, as well as the physical, temporal, and social distance inherent in many agency relations precludes principals' surveillance of agent behavior. … And lack of expertise further limits the ability of principals to evaluate what they are able to observe. Principals who lack the specialized knowledge of their agents and are excluded from the sites of agency action are therefore unable to articulate or enforce the norms that should govern agent behavior.

DEFINE: Clarifies a key dimension of principal-agent problems: monitoring failure stemming from secrecy, distance, and expertise gaps — not just incentive misalignment.

Shapiro, Susan P., The Social Control of Imper…, loc. 50