Online ISSN 2286-0266
Print ISSN 1223-0685
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Octavian-Dragomir JORA
Academia de Studii Economice din Bucureşti
Mihaela IACOB
Academia de Studii Economice din Bucureşti
The “property economics” of moral hazard, unlike mainstream “informational economics”, has a more relevant perspective on the issue because it places side to side, in a counterfactual manner, two realistic frames. On one hand, the moral hazard (and also the mechanisms for its limitation) existing when the affected parties are presumed to have an institutionalised respect for private property and freedom of contract; on the other hand, the opposite case, when social policies and institutions hamper properties and contracts. State interventionism is the most pervasive institutional infringement on private property and free contract, be that materially (taxes, inflation) and virtually (arbitrary regulations). The present paper deals with moral hazards in “principal-agent” relationships, identified in modern multinational corporations, arguing that institutions captured by interventionist ethos make it escalate into a systematic “expropriation” of principals (as stockholder-owners) by their own agents (as managers). The logic of this type of expropriations is that “legally” the principals are (institutionally) hampered from configuring or securing the contractual precautions they wish to enforce out of those available in a pure free market. We review topics pointing that omnipotent management phenomenon is not a so-called “asymmetric information” market failure, but a State failure in protecting private property.

ŒCONOMICA no. 1/2012
Keywords: business corporation, private property, contract, state interventionism, law of unintended consequences, moral hazard, principal-agent problems
JEL: B53, K20, L20, M20
Managementul omnipotent şi puterea stimulentelor etatiste. Hazard moral în interiorul corporaţiei moderne