Bureaucratic politics research couched within the new institutionalism paradigm has largely focused on principal authority rooted in formal (institutional) mechanisms that are ultimately both devised and chosen by politicians. A nascent literature has emerged over the past two decades whose underpinnings reflect increasing gravitation towards a transactional authority perspective, one that is compatible with behavioral theories of organizations. This transactional authority perspective departs from an exclusive reliance on formal mechanisms insofar that agent compliance is motivated by either mutual or bilateral agreement for both the principal and the agent. This perspective is rooted in not only the agent’s “sanctioned acceptance” of the principal’s authority but also the principal’s “sanctioned acceptance” of the agent’s legitimacy. We explore the logical implications of this transactional authority perspective for better understanding principal–agent relationships in the study of bureaucratic politics. We conclude by recommending that future research should redirect scholarly attention towards analyzing informal compliance and resistance mechanisms in bureaucratic politics, as well as offer a richer pluralist conception of bureaucratic governance in a democracy.