Understanding Government, Higher Education Institutions Relationship Vide the Lens of the Principal-Agent Theory

Abstract:

This paper attempts to presents a literature review on Agency Theory and its relevance in understanding the relationship between Government and the HEIs. It discusses the general aspects of the theory and also reviewed some previous studies that have applied the theory. Theories as we know help us to accomplish many important outcomes in academia. They help us to organize our thoughts and ideas about the world and also help us generate and explain relationships, complex or otherwise, between individuals or among groups. Theories also help us improve our predictions and expectations about people, groups or organizations, while at the same time giving us a better understanding of the world around us. Attempt has also been made to relate the application of the Principal – Agent theory to Higher Education, especially public universities with regards to their governance and funding. It is a well-known fact that Governments provides the greater part of funds required by the public universities.