As the street-level bureaucrats at the lowest tier of the national governance system, village cadres are confronted with pressures arising from imbalances between authority and responsibility as well as constraints in resource endowments. Investigating the theoretical and practical logic underlying their strategic innovations within structural constraints constitutes a pivotal inquiry in grassroots governance studies. Drawing on a combined “structure–agency” analytical approach, this study constructs a dual principal–agent framework for village cadres and conducts a comparative analysis of the implementation of common prosperity policies in three administrative villages in Town L. It investigates the behavioral motivations and strategic choices of street-level bureaucrats in achieving innovative policy implementation. The research finds that village cadres, as street-level bureaucrats, are situated within dual principal-agent relationships between the state and society. Through the “Pressure-Leverage” mechanism, they cultivate motivations for innovation under dual pressures and build action networks by leveraging resources from both directions. Village cadres promote the transformation of “pressure” into “leverage” through interactions with township governments and villagers. They select appropriate response strategies based on the interest-based bargaining, and their innovative behaviors follow the action logic of equilibrium game. The study analyzes the process by which village cadres engage in strategic decision-making by utilizing the space created by the dual principal-agent structure, which is conducive to deepening the academic understanding of the principal-agent theory and the policy implementation of street-level bureaucrats within the community settings.