Conventional wisdom holds that open, collaborative, and transparent organizations are innovative. But some of the most radical innovations—satellites, lithium-iodine batteries, the internet—were conceived by small, secretive teams in national security agencies. Are these organizations more innovative because of their secrecy, or in spite of it? We study a principal–agent model of public-sector innovation. We give research teams a secret option and a public option during the initial testing and prototyping phase. Secrecy helps advance high-risk, high-reward projects through the early phase via a cost-passing mechanism. In open institutions, managers will not approve pilot research into high-risk, high-reward ideas for fear of political costs. Researchers exploit secrecy to conduct pilot research at a higher personal cost to generate evidence that their project is viable and win their manager's approval. Contrary to standard principal–agent findings, we show that researchers may exploit secrecy even if their preferences are perfectly aligned with their manager's, and that managers do not monitor researchers even if monitoring is costless and perfect. We illustrate our theory with two cases from the early Cold War: the CIA's attempt to master mind control (MKULTRA) and the origins of the reconnaissance satellite (CORONA). We contribute to the political application of principal–agent theory and studies of national security innovation, emerging technologies, democratic oversight, the Sino–American technology debate, and great power competition.

中文翻译：

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 秘密创新


传统观点认为，开放、协作和透明的组织是创新的。但一些最激进的创新——卫星、锂碘电池、互联网——是由国家安全机构中小型的秘密团队构思的。这些组织是因为他们的保密性而更具创新性，还是尽管保密？我们研究了公共部门创新的委托人-代理模型。在初始测试和原型设计阶段，我们为研究团队提供秘密选项和公共选项。Secrecy 通过成本传递机制帮助在早期阶段推进高风险、高回报的项目。在开放机构中，管理者不会因为担心政治成本而批准对高风险、高回报想法的试点研究。研究人员利用秘密以更高的个人成本进行试点研究，以产生证据证明他们的项目是可行的，并赢得他们的经理的批准。与标准的委托代理调查结果相反，我们表明，即使研究人员的偏好与他们的经理的偏好完全一致，他们也可以利用保密性，并且即使监控是无成本且完美的，经理也不会监控研究人员。我们用冷战早期的两个案例来说明我们的理论：中央情报局试图掌握精神控制 （MKULTRA） 和侦察卫星 （CORONA） 的起源。我们为委托代理理论的政治应用和国家安全创新、新兴技术、民主监督、中美技术辩论和大国竞争的研究做出了贡献。