Moral Hazard in High Office and the Dynamics of Aristocracy
研究君主如何通过延迟奖励、随机解雇等机制最小化高官道德风险成本，长期可能导致贵族阶层固化，并分析了软预算约束的适用条件。
Both aristocratic privileges and constitutional constraints in traditional monarchies can be derived from a ruler's incentive to minimize expected costs of moral-hazard rents for high officials. We consider a dynamic moral-hazard model of governors serving a sovereign prince, who must deter them from rebellion and hidden corruption which could cause costly crises. To minimize costs, a governor's rewards for good performance should be deferred up to the maximal credit that the prince can be trusted to pay. In the long run, we find that high officials can become an entrenched aristocracy with low turnover and large claims on the ruler. Dismissals for bad performance should be randomized to avoid inciting rebellions, but the prince can profit from reselling vacant offices, and so his decisions to dismiss high officials require institutionalized monitoring. A soft budget constraint that forgives losses for low-credit governors can become efficient when costs of corruption are low.