'Objectionable Parasites': The Crown Agents and the Purchase of Crown Colony Government Stores, 1880-1914

This article discusses the Crown Agent purchase of colonial government supplies from the perspective of principal-agent theory. It is argued that, in order to maximise their own welfare, the Agents adopted a quality bias and used an uncompetitive purchasing procedure to buy quality goods, which were then subjected to an elaborate inspection procedure and insured and shipped at high cost. Until the turn of the century the colonies, however, were prepared to accept the additional expense, aware that the potential cost of the supply of poor quality merchandise far outweighed the premium paid for the goods, and that, if they wished, they could easily circumvent the Agents' purchasing monopoly and buy direct from merchants.