Abstract:

Building on the analysis of administrative subcontracting, this paper develops the governance impossibility triangle as a mid-range theoretical framework. It argues that within any hierarchical principal-agent structure, three constraints-rigid performance targets, fixed resource constraints, and strict rule enforcement-cannot be simultaneously maximized. Organizations must therefore make structural trade-offs among these three elements. Based on this insight, the paper reinterprets three ideal-typical governance forms-administrative subcontracting, Weberian bureaucracy, and modern corporate governance-as distinct equilibria under different constraint combinations. It further derives a set of testable propositions to explain endogenous phenomena such as the expansion of informal institutions, selective implementation, campaign-style governance, ambiguous subcontracting, and organizational distortion. The paper also examines the implicit conditions under which the triangle holds-including technological limits, organizational absorption capacity, agent behavior, risk externalization, and legitimacy resources-and identifies potential pathways for reconfiguration, such as technological innovation, extraordinary mobilization, and organizational restructuring. By distinguishing between ex ante and ex post uncertainty management, it reveals a fundamental divide between bureaucratic and subcontracting logics. Finally, the paper argues that China's governance system, under conditions of rigid targets, resource constraints, dispersed information, and high risk externalities, has evolved into a hybrid structure: bureaucracy as the institutional base, subcontracting as the operational engine, and externalized organizational forms as complementary absorbers. This configuration enables governance to remain viable under structurally impossible conditions.

Key words: Governance Impossibility Triangle, Administrative Subcontract, Rational Bureaucracy, modern corporate governance, uncertainty management