The article explores the value and limits of agency theory by comparing relations between ranchers and their managers in Rio Grande do Sul and Buenos Aires during the first few decades of the 19th century. Agency theory and the rational choice perspective are based on a deficient theory of action, assuming presocial actors who use a universal rationality to choose the most effective behaviors for attaining their objectives. Even so, agency theory is useful for identifying central dilemmas in the principal-agent relationship and for delimiting the set of viable solutions. As actors generally do not try to optimize their choices, but instead look for satisfactory solutions for the problems they encounter, only history and culture explain the "choice" of one viable arrangement and not another. Context and experience are internalized as habitus and practical consciousness, which shape the definition of problems and strategies for solving them. The ranchers studied here approached similar questions of agency in different ways. Part of this was due to divergent contexts, but much of it was related to their distinct habitus, stemming from the origin of the Argentine rancher in the colonial merchant class, lacking rural experience, and the origin of the Brazilian rancher in an elite of military officers and ranchers, dependent on the state. In both cases, repeated interaction through time led to important changes in the relationship between rancher and manager that are difficult for rational choice approaches to explain.
Rational choice; Agency theory; Ranches; Rio Grande do Sul; Buenos Aires