Research On The Operation Mechanism Of Statutory Organization From The Perspective Of Principal-Agent Theory

Shunde is one of the earliest region in China that adopted statutory bodies to promote social management innovation reform.This paper takes Shunde Social Innovation Center(SDSIC)as an example to study the principal-agent relationship in the operation process of statutory agency.This paper discloses that,in the principal-agent relationship between the government and SDSIC,the government provides theorganizational basis and legitimacy for the SDSICby “establishing institution,making system,and defining function”,and protects itsindependencein the specific operation process bymaking governance rules.In return,the SDSIC rewards the government's desired income by fulfilling the government's entrusted matters,andobtaining its reasonable compensation.This paper discloses that there are multiple principal-agent relationships between the SDSIC and a wide range of stakeholders and the SDSIC assumes multiple agent roles.As the agent of the supervisor government,the nature of the principal-agent relationship between the Policy-directed Department(Shunde Social Work Committee)and the SDSIC is an incomplete contract under the government's control.The government has mastered the contractual relationship at a macro level by grasping the power to make systems and rules,as well as the main resources and relational networks.Under the premise of recognizing government's control,the SDSIC also has the qualification and ability to negotiate the specific contents of the contract with the government and even modify them,thereby bringing about institutional or operational changes.As the agent of the market transaction subject,the SDSIC negotiates and signs the contract equally with the client,servicing as an independent legal entity,defines the powers and responsibilities between them and performs their respective duties according to the contract based on negotiations.In this process,the relationship between the SDSIC and the service purchaser is basically Party A and Party B in the market,even when the Party A is a certain governmental department.As the agent of the social donor,the SDSIC accepts the entrustment of property rights,provides the donor with a sense of altruism by carrying out the matters designated or not designated by the donor,and manages the donations properly,so as to obtain a certain agency fee to support its dailyoperationand perform itsmissions.The SDSIC not only assumes a variety of agent roles,but also shows different characteristics in the process of its growth.It has experienced three development stages: an all-round agent,a professional agent and an influential agent.The positions and contractual contents of each stage have changed significantly.This paper points out that the identity of the statutory body,the operational experience of being open and cooperate and the inclusive and supportive social culture of Shunde District help bring good agent effects to social innovation,but it still faces dilemmas come from the principal-agent relationships andsocial innovationindustry in its development.Giving a statutory body a veritable status,self-governance under the premise of recognizing the state order,and promoting the construction of standards and talentsin the social innovation industry are of great significances for improving the agency mechanism of statutory bodies.