Delegation of Power and Prevention of Tyranny
James Madison, often referred to as the "Father of the Constitution" wrote, "In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed, and in the next place oblige it to control itself." In this quote Madison presents the two sides of a collective action problem that he diligently fought throughout the framing of the Constitution. Not only would he have to delegate enough power to the government (agents) so that they would be able to effectively govern the people (principals), the Constitution also had to spread power evenly amongst each branch so that the government would control itself.
The first constitution of America was the Articles of Confederation, drafted shortly after the Declaration of Independence. The Articles created a highly decentralized governmental system where most of the power was held by individual states, who had the authority to override any governmental decision.
The Continental Congress was transformed into a new, permanent Congress, with each state receiving one vote. Major laws required nine of the thirteen state's votes, while more fundamental changes required unanimous agreement. Throughout the Revolutionary War and the subsequent years, Congress struggled to wield what little power they had in America's affairs. In fact, the nation was so shakily grouped together that by 1787 American leaders were openly speculating that Britain might reassert its authority over the states.
Therefore when it came time to draft the Constitution, American leaders no doubt looked to the major problems associated with the Articles of Confederation for inspiration. One such problem that faced the young nation was a massive debt incurred after six years of war. Congress owed Americans some $25 million and foreign governments...