Agency Problems and Electoral Institutions:

Delegation of decision making authority to agents with different preferences and better information than their principals is ubiquitous in politics, and political representation is no exception. Electoral institutions can crucially shape the agency problems that result from this delegation. A prominent change in American electoral institutions occurred when the 17th Amendment to the Constitution established direct election of U.S. Senators as of 1914. How did this change the political agency relationship between the mass electorate and U.S. Senators? We develop theoretical expectations about the representational effects of direct election by a relatively inexpert mass electorate and indirect election by a relatively expert political intermediary, based on principal-agent theory. The chief predictions are that the representative will be more responsive to the mass electorate under direct election, but will also have more discretion to pursue his own ends regardless of those of his principals. We use the 17th Amendment as a quasi-experiment to test the predictions of the theory. Statistical models show strong support for both predictions. Moreover, the 17th Amendment is unable to “explain ” changes in voting patterns in the U.S. House of Representatives over the sam