Looking at the recommendations on how to overcome the reluctance to disclose information in public sector accountability arrangements, principal-agent theory has little to offer for the case of public services (Broadbent, Dietrich & Langlin 1996; Dubnick 2002). That the accountee demands more information from the accountor may not be an efficient option. Under certain conditions (measurement imperfections, unobservable multi-tasking, casual ambiguities and the latent economics of continuation) more information may lead to a higher agency loss (Jacobides & Croson 2001). More information destroys value by creating organizational dysfunctionalities (in form of a productive paradox, perverse learning or a pyrrhic victory). A productivity paradox occurs if the adopted performance indicators are inappropriate or the act of monitoring is too expensive. Perverse learning refers to situations where the accountor can effortlessly meet the agreed performance targets without making any extra effort on behalf of the principal. A pyrrhic victory occurs when the present costs of implementing a new information system outbalance future productivity gains. The wellknown multi-tasking problem, modeled by Holmstrom and Milgrom (1991), also shows a limit for incentive schemes for output that is not easy to measure. The conclusion that can be drawn from principal-agent theory is that the problem of intentionally withholding information can only be reduced but never resolved in the sense of a first-best solution. Agency losses can thus never be eliminated.