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By Hale G. E.

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85). Likewise, when deciding whether to initiate institutional change or not, individuals will consider the expected costs related to the transformation of existing institutions and, in particular, the up-front costs of transformation and the costs of monitoring and enforcing the proposed institutions. 202-205). On the one hand, a shift in relative prices is the prime condition for institutional change to occur and, on the other hand, agents' perceived costs and benefits are central to the institutional decision taken or, in other words, a central dynamic institutional change.

1 993) have a pronounced preoccupation with the persistency of the CAP, but the tentative ideational changes identified in the early 1990s are more difficult to capture through the public choice framework applied. It is suggested that shifts in 'supply and demand behaviour in the political market' have turned agricultural policy into a societal problem. Clearly, however, even in the early 1990s, surplus agricultural production, increasing agricultural expenditures, adverse environmental effects of agricultural production and international trade negotiations were not new phenomena.

Shirking' appears when agents seek to optimise their own preferences at the expense of the preferences of their principals and in that sense agent 'shirking' may contribute to ideational change to the extent that agent preferences are in favour of such. e. the principals - in the context of the 1992 CAP reform. The reason for this is that the institutional conditions, which the principal-agent theoretical framework suggest as being relevant, all work against the ability of the Commission to 'shirk'.

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