The difference in principle between the poorly informed and the powerless: a call for contestable authority

Abstract

At any time, as many as one in four individuals in a population may not be able to develop preferences and place trust in providers or act upon what he or she knows or wants because of immaturity or limited mental or physical capacity. In economic terms, these individuals have limited consumer sovereignty. As patients, pupils, or social service recipients, they have to rely on personal representation by a member of their family, a friend, or an appointed guardian. The article presents six cases of dependent individuals and applies a modified principal–agent model with a dependent–rather than a sovereign–principal to illuminate the additional informational problems and subsequent incentive problems that dependency causes. The article demonstrates how the situations of incompetent individuals are more prone to error, conflict and self-serving biases by representatives and professionals than the situations of autonomous clients. Important control options such as individual rights to information, complaint and choice are of little value if individuals do not have the personal resources to make use of them. Our call for contestable authority is a call for due process; for the design of institutions to ensure sufficient transparency in the exercise of authority and encourage critical reflection and cooperation. Ideally, major decisions should be contested and revised if they do not accord with the recipient’s fundamental interest. A particular challenge is to increase transparency and strengthen channels for verification by service recipients and their representatives when assumptions about personal aims and values underlie professional decisions.