DUBAI – In Hermann Hesse’s novel The Journey to the East, a group of pilgrims sets out on a spiritual quest, guided by Leo, a seemingly humble servant who tends to their needs and keeps them organized. But midway through the journey, Leo suddenly disappears, and the pilgrimage collapses into chaos. The travelers, who believed themselves to be the journey’s true leaders, are lost without Leo’s quiet but essential presence.
The same risk follows from the loss of seasoned government professionals – the career civil servants, administrators, and experts who keep the modern state running smoothly, usually far from the spotlight. When they are abruptly defenestrated – as is happening at key US agencies like USAID, the FBI, the CIA, the National Science Foundation (NSF), the National Oceanic and Atmospheric Administration, and the National Institutes of Health – governance does not simply continue as usual under new leadership. Rather, fragmentation, inefficiency, and dysfunction prevail – just like among Hesse’s pilgrims. Though he is just one man in Hesse’s story, Leo represents all the anonymous bureaucrats and civil servants who keep the ship of the state afloat.
At the heart of this issue is the principal-agent dilemma, a concept introduced by economists Stephen Ross, Michael Jensen, and William H. Meckling in the 1970s to describe a problem that can arise when one party acts on behalf of another. In government, political leaders (the principals) rely on bureaucrats or officials (agents) to translate their decisions into action. While political leaders naturally want their directives to be followed precisely, bureaucrats are guided by their own specialized knowledge, ethics, and imperatives to prioritize long-term stability over short-term outcomes.
To overcome this mismatch, the principals in the second Trump administration are seeking to replace or simply eliminate the agents. But such purges usually backfire, because once a paranoid leader has sidelined his own agents, he no longer possesses the means to govern effectively.
Paranoia is a dangerous mindset in governance. A leader who constantly suspects his own officials of disloyalty may begin to see enemies where none exist – as with Trump’s perception of threats emanating from the “deep state.” The result is a vicious cycle: as more officials are dismissed or sidelined, institutional knowledge is lost, governance becomes less effective, and the leader’s fears are reinforced by the very dysfunction he has created. Instead of a smooth-running administration, the government becomes reactive, chaotic, and incapable of long-term planning.
This can play out in multiple ways. For agencies like the FBI and CIA, forced retirements and buyouts inevitably eliminate expertise needed to monitor threats to national security, reduce morale, and discourage prospective employees. Moreover, replacing seasoned professionals with political loyalists risks compromising the collection, analysis, and sharing of intelligence (some US allies may be reluctant to share sensitive information in fear that it may fall in the hands of Elon Musk or Tulsi Gabbard), leading to poor decision-making at the highest levels of government.
Similarly, US foreign policy will suffer now that, with the destruction of USAID, it has lost its long-standing connections with local communities around the world, weakening America’s diplomatic reach and influence, and making it harder to advance US strategic interests. And the loss of experienced professionals from agencies like the NSF will impede research, delay technological innovation, and weaken America’s ability to respond to emerging challenges and risks, such as those stemming from artificial intelligence, climate change, or public-health crises.
The German sociologist Max Weber, who laid the foundations of modern administrative theory, showed that a professional bureaucracy is necessary for effective governance. Career civil servants understand the complex processes behind budgeting, law enforcement, disaster relief, and infrastructure projects. Without rule-based, merit-driven systems that keep government functioning beyond the whims of political leadership, governance breaks down.
Equally dangerous is the attempt to run public administration like a private company, where success and failure are measured only in accounting terms: efficiency, cost savings, and profit. While fiscal responsibility is important, applying corporate-style financial controls without an understanding of public-sector purposes can lead to disastrous consequences. A financial controller or accountant borrowed from Tesla may identify potential government savings that look rational on a balance sheet, but that will lead to much greater long-term costs.
A striking real-world example is the Danish tax authority (SKAT) scandal of the 2010s. In an effort to streamline operations and cut costs, SKAT underwent aggressive staff reductions and implemented other reforms to improve “efficiency” – such as dismantling internal fraud-detection units, outsourcing critical tax-collection functions, and betting heavily on automation. The result? Criminals exploited the weakened system to siphon off an estimated $2 billion in fraudulent tax refunds. The supposed cost-saving measures ended up costing Denmark far more than they saved.
Treating governments as if they were businesses can undermine their core functions. A well-run administration requires not just financial oversight but institutional knowledge, strategic foresight, and a deep understanding of the unique demands of governance. Prioritizing short-term savings over long-term stability weakens state capacity, renders public services unreliable, and opens the door to corruption, inefficiency, and systemic failure.
By aggressively shrinking key agencies and viewing career officials as adversaries rather than experts, the Trump administration is shifting from the traditional principal-agent dilemma – where bureaucrats resist leadership – to a “paranoid principal dilemma,” where the leader, in a desperate attempt to assert dominance, ends up alone, unable to trust anyone, and incapable of governing effectively.
As in The Journey to the East, where the pilgrims find themselves lost without Leo, a government that dismisses too many seasoned officials may soon find itself without the glue that held everything together. But a leader who is also paranoid – who sees his own agents as potential enemies – risks isolating himself within an administration that is both ineffective and deeply unstable.
Copyright: Project Syndicate, 2025.
www.project-syndicate.org
