Best Practices for Implementing Federal Environmental Policies: A Principal-Agent Perspective

In the US, federal environmental policies tend to be implemented by subnational agencies through intergovernmental management systems, which results in state governments serving as agents of the Environmental Protection Agency (EPA). Therefore, principal-agent dynamics create a key challenge for implementing federal environmental policies, as goal incongruence and information asymmetries lead to conflict. As such, we argue some best practices are those that mitigate principal-agent problems by reducing information asymmetries, or aligning actions with the expectations of both principals and agents. Drawing data from the EPA’s evaluations of state programs, the authors identify and examine 68 best practices. Findings suggest that viewing implementation of federal environmental policies as an exercise in managing principal-agent dynamics can help reduce conflicts between organizations working together to address complex environmental problems.