Corporate Governance of Nonprofit Organizations: Cooperation and Control

Abstract

This article explores the limits of institutional economics regarding the cooperation of boards of directors and executive directors of nonprofit organizations. The normative separation of power between these central actors resulting especially from arguments derived from institutional economics is being reflected using the analytical approach from the resource-based view and empirical evidence based upon group and motivational theory. After analyzing the board’s role and the individual board member’s role within a nonprofit organization, the paper explores the limits to decision-making within governing bodies. The paper shows why a unitary board can improve the quality of decision-making within nonprofit organizations by raising the incentives for the executive director to act as desired. The paper also explores the impact of trust and different types of control upon the key actors within the governance process in order to derive the suitable form of control from that analysis.     

THE PUBLIC MANAGEMENT CHALLENGES OF CONTRACTING WITH NONPROFITS for SOCIAL SERVICES

ABSTRACT

States and municipalities increasingly pursue privatization as a way to deliver public goods and services because of two expected outcomes, reduced costs and quality improvements. Several reasons are frequently cited for these anticipated benefits ranging from market competition to increased management flexibility and discretion to fewer rules and regulations. One policy area in which government has privatized many services through contracting with nonprofit organizations is social services. Contracted services are as diverse as providing shelters for the homeless, vocational education and job retraining, domestic violence services, refugee esettlement, child and elder abuse services, and food banks. A proliferation of public administration and nonprofit organizational scholarship has examined a range of issues associated with the government-nonprofit social service contracting relationship, not the least of which are topics related to management, measurement, and accountability. This article examines the public management challenges and implications of contracting with nonprofit organizations for the delivery of social services.     

Terminating intervention: Understanding exit strategy and U.S. involvement in intrastate conflicts

The term exit strategy is misleading because it elevates exit considerations over and above the demands of proper goal setting and mission accomplishment in limited engagements. Despite this fact, developing an appropriate exit strategy is mandated by the Clausewitzean framework that suggests three components: 1. a clear statement of the political objectives to be pursued; 2. a derivative group of operational goals that must be secured; and 3. a set of fallback options that must be anticipated if the original objectives and goals cannot be attained. Examining six U.S. interventions ‐with a view to understanding whether and how exit strategies were integrated into entry decision‐making, this study finds that they have been well integrated only in the case of high‐level interventions. They have been mostly neglected in low‐ and midlevel interventions, even though the latter incur all the potential hazards associated with high‐level engagements.     

What Drives For-Profit and Nonprofit Organizations’ Entry into Voucher Markets?

This study investigates a social service voucher program in Korea to examine why local governments rely on external actors, such as for-profit and nonprofit organizations, in provisioning social services and what encourages such market entry in view of the transaction cost theory. The social service voucher program, first introduced in 2007, offers a unique dataset of 1,101 local markets to examine how local governments are willing to stay in control of provisioning the nationwide program while promoting private actor entry. This study finds that local governments with lower fiscal capacities or in markets in which multiple existing organizations operate are more motivated to foster for-profit entry, whereas only existing nonprofit organizations in the market that provide the same services predict nonprofit entry. The implication is that the facilitation of for-profit entry is associated with local governments’ need to manage transaction costs, although this may not be true for nonprofit entry.     

Local governments and their arm’s length bodies

ABSTRACT

In this paper, we discuss the state of the art on the creation of arm’s length bodies (ALBs) by local governments. We make three main contributions. First, there are many different types of ALBs and each country has its own categories; an expert survey was held identifying three common types of body, to enable future comparative research. Second, we point out that the creation of ALBs has led to a number of new challenges for local governments, particularly regarding governing bodies at arm’s length to ensure ALBs’ good performance. A lack of capacity and information have to be countered, for example, by increased monitoring – also for democratic accountability purposes. Special attention is needed for the multiple principal problem that arises when local governments jointly create ALBs. Third, research into local ALBs is still in its early stages. We present a research agenda to develop knowledge on the topic.     

Explaining and Justifying Authoritative Decisions: The Case of Controversial Facilities for the Homeless in Rotterdam

Abstract

This article analyses the ways in which local executive leaders rendered account for the decisions taken on where to locate 19 controversial facilities for the homeless in the Dutch city of Rotterdam. Despite the non-participatory nature of the decision-making process, executive leaders acquired a remarkable level of authority for their decisions. The analysis suggests that the accountability strategies employed by local executive leaders contributed substantially to this success. Specific ways of rendering account for the decisions made concerning the locations enabled local executives to develop the political repertoires necessary to make the authoritative decisions they deemed indispensable. Most important among these ways were the executives' recognition of the importance of forming direct, informal accountability relationships with local residents, the proactive rendering of account and the executives' partial control over the forums to which account was rendered. The author concludes that an authoritative ‘Decide - Announce - Defend’ approach may not yet be out of fashion in modern local governance. The findings suggest that we will better understand the practice of public accountability if we supplement the existing conceptual frameworks for analysing and assessing public accountability arrangements with an alternative conception of accountability that focuses on the strategic aspects of rendering account. ^{1 1.}?An earlier version of this article was presented at the 2009 EGPA Permanent Study Group Local Governance and Democracy, in the section themed New Forms of Local Democracy. The author thanks two anonymous reviewers for their constructive comments on an earlier version of the article.      

Don’t reinvent the wheel: possibilities for and limits to building capacity of grassroots international NGOs

Abstract

How can support organisations build the capacity of volunteer-driven non-governmental organisations (NGOs)? Citizen aid for relief and development has expanded rapidly in the twenty-first century, and the number of American aid organisations operating in the Global South has grown to nearly 10,000. These grassroots international NGOs – GINGOs – are small-budget, volunteer-driven organisations typically launched by Americans without professional experience in international development or nonprofit management. These groups prize the expressive and voluntaristic dimensions of development work, yet face challenges of amateurism, material scarcity, fragmentation, paternalism and restricted focus. We investigate whether support organisations, whose primary goals are to build the capacity of organisations and strengthen the organisational field, offer solutions to GINGOs’ inherent weaknesses. We draw on 15 semi-structured interviews with a stratified selection of support organisations, including associations tailored towards international development and towards nonprofit work at large. We find that support organisations offer resources to help GINGOs in managerial and administrative domains. Fewer support organisations help GINGOs build technical development skills, and fewer still push GINGOs to critically reflect on their role in development. We find that peer learning and online platforms could help engage GINGOs volunteers in networking spaces, even as their geographic dispersal in the US encourages their fragmentation and isolation.     

Joined up policy in practice? The coherence and impacts of the local government modernisation agenda

Abstract

The last decade has witnessed a raft of new policies designed to transform the politics and performance of local authorities in the UK. Over the next three years, a specially commissioned themed section of Local Government Studies will explore the impact of these policies drawing on recent empirical studies by leading researchers in the field. This paper, the first in the series, sets the scene by tracing the evolution of key policies, analysing their objectives and assessing the extent to which they can, as central government has claimed, be seen as a coherent package of complementary policies. It concludes that whilst at first sight the links between policies within the Local Government Modernisation Agenda are not obvious, policies have become increasingly holistic. Local authority officers perceive them to be interacting in ways that contribute to the achievement of service improvement, more effective community leadership, increased stakeholder engagement, greater accountability and increased public confidence. However, the lack of ‘joined up’ working across Whitehall presents significant problems for councils and other agencies that are responsible for local service delivery and a continuing challenge for central government.     

Ombudsman for Bangladesh: Theory and Reality

Abstract

Although the term “Ombudsman” is a relatively unfamiliar term in Bangladesh in general, it is widely used and is a practiced technique of ensuring administrative accountability and transparency in western developed countries. The offices of Ombudsmen, as currently found in an increasing number of countries, are institutions of government design to meet the perceived needs as to both out come and process. Their objectives are to secure fairness, integrity, accountability and efficiency in public affairs, by methods conductive to promoting confidence in all institutions of the state. In reality the Ombudsman's office is seen as an institution, which has been established in regional jurisdictions in order to promote high standards of public administration and management, and to protect the right of citizens in their dealing with government. In this article, an attempt is made to analyze the role of the “Ombudsman” concept and why it is needed and how it can be institutionalized in Bangladesh. In doing so, the article has been divided into two parts. Part I discusses the conceptual framework of the Ombudsman while part II throws light on the prospects and problems of this concept in Bangladesh as attempts are being made to establish the office of the Ombudsman.     

Evidence-Based Practice: Challenging the Rational Wisdom

The field of performance measurement (PM) is firmly entrenched as a management practice in many governments, agencies, and nonprofit organizations. Though emerging later, the field of evidence-based practice (EBP) has developed simultaneously as a new approach to enhance agency performance. While both rationality-oriented reforms intend to enhance program or agency performance, these two related rational approaches are seldom considered in concert. This essay examines the conceptual underpinnings and practical linkages between PM and EBP to explore how EBP and PM can be jointly implemented as tools to advance agency goals. As rational approaches aimed at improving performance, these two distinct tools are not substitutes, but integrated components of a results-driven strategic management approach. As a conceptual assessment, the article offers practical advice and broad appeal to performance-oriented practitioners seeking to improve agency performance.     

Understanding China’s ‘Belt and Road Initiative’: beyond ‘grand strategy’ to a state transformation analysis

Abstract

China’s massive ‘Belt and Road Initiative’ (BRI) – designed to build infrastructure and coordinate policymaking across Eurasia and eastern Africa – is widely seen as a clearly-defined, top-down ‘grand strategy’, reflecting Beijing’s growing ambition to reshape, or even dominate, regional and international order. This article argues that this view is mistaken. Foregrounding transformations in the Chinese party-state that shape China’s foreign policy-making, it shows that, rather than being a coherent, geopolitically-driven grand strategy, BRI is an extremely loose, indeterminate scheme, driven primarily by competing domestic interests, particularly state capitalist interests, whose struggle for power and resources are already shaping BRI’s design and implementation. This will generate outcomes that often diverge from top leaders’ intentions and may even undermine key foreign policy goals.     

Contesting land grabs,negotiating statehood: the politics of international accountability mechanisms and land disputes in rural Cambodia

Abstract

In Cambodia, rural citizens embroiled in protracted land grabbing cases with the state and private companies are turning increasingly to international accountability mechanisms for resolution. This article applies the interlinked concepts of hybrid governance and legal pluralism to understand the prospects and limitations of ‘forum-shopping’ through appeals to international mechanisms for rural communities affected by land grabs. Drawing on interviews and using process tracing, it examines the outcomes of a mediation case filed with the International Finance Corporation’s Compliance Advisor/Ombudsman (CAO) involving indigenous groups and a Vietnamese rubber company in north-east Cambodia. It argues that while international accountability mechanisms yield platforms for dispossessed groups to assert claims, they also reify choices between entitlements and attainability without circumventing the problems associated with justice delivery under Cambodia’s authoritarian regime. Overall, this study highlights the interaction, competition and collaboration between distinct forms of regulatory authority exercised by national and transnational actors involved in land grabbing cases in Cambodia, demonstrating their role in ‘negotiating statehood’ by governing local claims to land.     

The New Mode of Public Governance and Public Accountability in Developing Countries: An Analysis with Particular Reference to Bangladesh

Public accountability is a fundamental element of good governance. All countries all over the world strive to ensure the accountability of public officials by adopting different kinds of mechanisms. Following the liberal democratic tradition, most countries in the world have relied on the legislative instruments, executive means, judicial and quasi-judicial processes, official rules, codes of conducts, official hierarchies, public hearings, interest groups, media scrutiny and so forth for ensuring public accountability. However, in recent years, the new mode of public governance has brought new dimensions to the discourse on public accountability. This new mode focuses largely on the market- and society-centered mechanisms. This article is an attempt to assess the effectiveness of these market- and society-centered mechanisms in ensuring public accountability in Bangladesh. The article has the following objectives:

(a) to explore contemporary debates on the market- and society-centered mechanisms of public accountability;

(b) to sketch the state of public accountability in Bangladesh; and

(c) to analyze the effectiveness of the market- and society-centered mechanisms in view of the contemporary socio-economic and political dynamics of Bangladesh.     

Federal set-asides policy and minority business contracting: understanding the adarand decision

In Adarand Constructors v. Pena ⁽¹⁾, the Supreme Court ruled that federal affirmative action preference programs must undergo the “strict scrutiny” standard. A program subject to strict scrutiny is one that cannot pass muster under the Constitution's “equal protection” mandate unless there is a “compelling government interest” in its objectives and the program is “narrowly tailored” to meet the objectives. This paper reviews the Adarand decision and discusses the implications of the decision for minority business federal contracting.     

Industrial relations and manpower

This article provides the first empirical evidence on the impact of Best Value processes on local service quality, costs, efficiency and accountability. Views were obtained from a wide range of personnel involved in the pilot programme in Wales by means of a postal questionnaire and interviews. The evidence shows that so far Best Value has had a positive impact on quality and accountability but little impact on service costs. Perceptions of the impact of Best Value are significantly more positive in authorities that adopted a corporate approach to the pilot process.     

An Exploratory Study into the Understandings and Awareness of Leadership Ethos and Its Inherent Critical Success Factors by Public Sector Officials in the Department of Trade and Industry (DTI) and the Ministry of the National Economy (ECONAT)

ABSTRACT

The purpose of this study is to examine the understandings of public sector leaders about Leadership Ethos (LE) and its inherent Critical Success Factors(CSFs) looking at their application in the public policy implementation process. The study applied an adapted theoretical paradigm on leadership that borrows from the Western and African contexts. In the light of the aim and objective of the study, both the interview schedule and survey questionnaires were used to gather information with regard to LE and its inherent CSFs. In this view, a semi-structured interview schedule was used to guide both interviews with senior public officials - one in the DTI and one in the ECONAT. A survey questionnaire was administered to public officials at middle and lower management levels working and reporting directly to the interviewed senior public officials. The purpose of the questionnaire was to reduce personal biases inherent in the responses of the senior officials, which appear to be a challenge emerging from self-perception assessments. Research findings suggest that leaders at the DTI and the ECONAT do not sufficiently demonstrate an awareness of LE and its inherent CSFs in the practice of leadership. LE enables leaders garner followers’ trust and obtain their consent; encourage followers’ commitment to organisational goals; and introduce and encourage participatory decision making processes as key factors to successful public policy implementation.     

Financing Local Government

There has been much debate in the UK over the implications for local government accountability of the high proportion of central funding of local government. The question has received particular attention recently as a key issue in the government's 'Balance of Funding' review. Two forms of accountability can be distinguished: average accountability and marginal accountability. This paper provides an analysis of the relationship between the balance of funding and these two concepts of accountability and concludes that increasing the proportion of local funding would be beneficial. One method of addressing problems caused by high central funding would be to introduce a local income tax alongside council tax, enabling the central grant to be reduced. The paper examines practical issues involved in the introduction of such a tax.     

Political transitions and commissions of inquiry: the politicisation of accountability in Ghana

Abstract

What role does a commission of inquiry (COI) play in delivering accountability? In theory, when the public delegates power to political leaders to formulate and implement policies, they seek political accountability in return. Using Ghana as a case study, this study examines how the operations of COIs may deliver accountability. Principal–agent theories of accountability and African conceptions of legitimacy are incomplete on their own and need to be integrated into an explanation of political accountability that takes into consideration political transitions and the role of COIs in delivering a minimalist form of accountability. This study argues that a COI is an instrument of regime legitimatisation. The demands by citizens for political accountability in Ghana correlate with political transitions. Accompanying each power alternation was a different model of political accountability. To understand the predominant applications of accountability, we emphasise the politicisation of accountability.     

Nicaraguan peasant cooperativism in tension: adaptive strategy or counter-movement

Abstract

Based on qualitative research conducted in three regions of Nicaragua, this paper examines the contribution of the communitarian approach to the new rurality in understanding the orientation and tensions within the peasant cooperative movement. The thematic analysis of 30 semi-structured interviews carried out with members of grassroots cooperatives reveals two main categories of motivation for engagement within the cooperative movement. A first set of motivations shows the will to transform the productive structures through small producer organisations to better adapt to the challenges imposed by global economic integration. A second set of motivations highlights broader socio-political objectives that seem to crystallise around the desire to build long-term alternatives to the exclusionary process of neoliberal globalisation. I explore these motivations in light of the distinction between reformist and communitarian approaches to the new rurality. I outline that the articulation of these two approaches, and more particularly the contribution of the communitarian approach, makes it possible to better understand the tensions within the cooperative movement in regard to socio-economic challenges. On this basis I call for a greater consideration of the communitarian dimensions of the new rurality to better define the role of the state, public policies and non-governmental organisations in supporting these phenomena.     

SELF‐REGULATION WITHIN THE REGULATORY STATE: TOWARDS A NEW REGULATORY PARADIGM?

An emerging feature of the modern regulatory state in Britain and elsewhere is the promotion of self‐regulation. This paper examines the relationship between the state and self‐regulation in the context of the challenge of meeting public interest objectives. It draws on research on the policy and practice of self‐regulation in recent years in Britain. The paper argues that the institutions, processes and mechanisms of the modern regulatory state and the ‘better regulation’ agenda in Britain, notably those that aim to foster transparency and accountability, can assist in the achievement of public interest objectives in self‐regulatory schemes. We conclude that a ‘new regulatory paradigm’ can be put forward which involves a form of regulatory ‘subsidiarity’, whereby the achievement of regulatory outcomes can be delegated downwards to the regulated organizations and self‐regulatory bodies while being offset by increasing public regulatory oversight based on systems of accountability and transparency.