ABSTRACT
Principal-agent theory is often used to model the relationship between SOEs and governments. Several arguments, however, demonstrate why the application of this theory to the case of SOEs is problematic. This chapter discusses three such problems: the over-assumption of goal divergence, the lack of attention to the principal’s opportunism and the existence of multiple principals. Potential solutions can be found in increased coordination among principals and/or the application of stewardship theory. The existence of these problems is illustrated by an analysis of the Dutch SOE policy between the 1980s and 2015. This analysis confirms the existence of the problems and shows that the Dutch government is adopting some elements of the proposed solutions. Similar patterns are found in other countries, but more research is necessary to either further develop principal-agent theory or replace it as the main vehicle for the analysis of SEO-government relations.
