@article{Acemoglu2025, 
author = {Daron Acemoglu},
title = {How Can Administrative Agencies Operate Effectively? Institutional Trust, Independence, and Mission-Driven Incentives},
year = {2025},
journal = {Research in Government and Economics},
volume = {1},
number = {1},
pages = {47-75},
keywords = {administrative state, institutional trust, incentive mechanisms, regulatory reconfiguration, artificial intelligence governance},
url = {https://www.sciopen.com/article/10.26599/RGE.2025.9720102},
doi = {10.26599/RGE.2025.9720102},
abstract = {From the perspective of government and economics, the paper examines the role of modern administrative agencies in market economies and the pressures they confront. It conceptualizes these agencies, such as central banks and environmental regulators, as a “fourth pillar” of the state, parallel to the executive, legislative, and judicial branches. Together, they constitute the contemporary “administrative state.” Its effectiveness rests on broad institutional trust. Yet this trust is increasingly undermined by populist movements and political interference, which weaken the professionalism and independence of administrative agencies. To address these risks, the paper develops an analytical framework that emphasizes two pillars: mission-driven incentives and institutional independence. At the local level, it analyzes incentive failures and governance fragmentation within federal systems. The paper then turns to emerging technologies, particularly artificial intelligence, and argues that regulatory frameworks must be reconfigured. The key is to balance deregulation with targeted oversight. Such a balance is essential for rebuilding state capacity and enabling governments to navigate the uncertainties of the current era.}
}