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An agency analysis of church-pastor relations

Author

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  • Charles Zech

    (Villanova University, Villanova, PA, USA)

Abstract

Incentives are critical to the study of economics. But do they work in non-traditional economic settings, such as religious organizations, in a manner consistent with economic theory? This study considers the agency relationship between churches and their clergy. This paper contends that pastor compensation is not typically tied directly to performance, but rather indirectly through promotion tournaments. Pastors whose performance is recognized as being exceptional are rewarded by being called to larger, more prestigious congregations. Given the difficulty of observing and measuring pastor performance this represents a sensible solution to the church-pastor principal-agent problem. Copyright © 2001 John Wiley & Sons, Ltd.

Suggested Citation

  • Charles Zech, 2001. "An agency analysis of church-pastor relations," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 22(6), pages 327-332.
    • Handle: RePEc:wly:mgtdec:v:22:y:2001:i:6:p:327-332
    DOI: 10.1002/mde.1030
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    References listed on IDEAS

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    1. Allen, Douglas W., 1995. "Order in the church: A property rights approach," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 97-117, June.
    2. Herbert A. Simon, 1991. "Organizations and Markets," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 25-44, Spring.
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    Cited by:

    1. Becky Haney, 2008. "The Relationship Between Labor Market Structure and Clergy Compensation in Protestant Denominations," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 36(1), pages 65-75, March.
    2. Oliveira, Livio Luiz Soares & Netto, Giácomo Balbinotto, 2013. "Tournaments in religious organizations with investment in religious human capital: choosing the pope," MPRA Paper 44603, University Library of Munich, Germany.
    3. Oliveira, Livio Luiz Soares de & Neto, Giácomo Balbinotto, 2013. "The problem of the principal-agent and promotion tournaments in religious organizations: choosing the next pope," MPRA Paper 44610, University Library of Munich, Germany.
    4. Franklin G. Mixon Jr. & Luis R. Gómez-Mejia, 2020. "The Competitive Struggle to Win Tournaments: The Allies’ Race to Capture Adolf Hitler’s Eagle’s Nest," American Business Review, Pompea College of Business, University of New Haven, vol. 23(1), pages 3-17.
    5. John A. Pearce II & David A. Fritz & Peter S. Davis, 2010. "Entrepreneurial Orientation and the Performance of Religious Congregations as Predicted by Rational Choice Theory," Entrepreneurship Theory and Practice, , vol. 34(1), pages 219-248, January.

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