An Evaluation of Leadership as a Response to Agency Failure in the Public Sector

An alternative to contractual solutions to agency problems is suggested in the literature on leadership in which leaders are often claimed to be able to steer historical processes in the direction they intend through the distinctive influence they have on the intrinsic motivation of their followers. We evaluate Casson's (1991) agency–theoretic model of leadership as 'moral manipulation' which under certain conditions can be exercised at lower agency cost than monitoring. We then make a case for conceiving leadership as the development of culture of passion to advance the leader's quest through the engagement of followers in 'interaction rituals' in which their passion is either recharged or their lack of passion exposed. The impact the emergence of such cultures can have on the policy–making community is examined using the British and New Zealand experiences and a case is made for the preservation of a counter–culture of 'public interest' in the policy advisory ranks of the civil service.