Regulation by Reputation: Monitoring and Sanctioning in Nonprofit Accountability Clubs

Nonprofits seek to enhance their reputation for responsible management by joining voluntary regulation mechanisms such as accountability clubs. Because external stakeholders cannot fully observe nonprofits’ compliance with club obligations, clubs incorporate mechanisms to monitor compliance and impose sanctions. Yet including monitoring and sanctioning mechanisms increases the cost of club membership for nonprofits. What factors account for the variation in the strength of monitoring and sanctioning mechanisms in voluntary accountability clubs? An analysis of 224 clubs suggests that stringent monitoring and sanctioning mechanisms are more likely in fund‐raising‐focused clubs, clubs that offer certification (as opposed to only outlining a code of conduct), and clubs with greater longevity. The macro context in which clubs function also shapes their institutional design: clubs in OECD countries and clubs with global membership are less likely to incorporate monitoring and sanctioning mechanisms than clubs in non‐OECD countries and single‐country clubs, respectively.     

Balancing Accountability and Efficiency in a More Competitive Public Sector Environment

Extract from a speech delivered at Government-in-Excellence Summit 2000, 'Reinventing Government — A Manifesto for Achieving Excellence and Managing for Results in the New Millennium', 24–26 May, Singapore, (For the full text see www.anao.gov.au)     

Corporatism, Pluralism, and Democracy: Toward a Deliberative Theory of Bureaucratic Accountability

This essay proposes a deliberative model of bureaucratic accountability and assesses its feasibility. Conventional wisdom suggests that a deliberative theory of bureaucratic accountability has little utility outside corporatist contexts. I reject this view because recent changes in patterns of interest representation have transformed both corporatist and pluralist bureaucracies into more hospitable environments for public deliberation. Contrary to the claims of democratic corporatists, recent pluralist practices of interest representation also seem to be compatible with public deliberation. Hence, movement toward greater openness in administrative decision-making is possible from both liberal pluralist and corporatist starting points. Corporatism clearly has no monopoly on democratic deliberation.     

Toward a Theory of Performance Reporting to Achieve Public Sector Accountability: A Field Study

Governments in many countries are implementing performance reporting systems. Many advocates claim that performance reporting results in accountability and effectiveness. There is no theory to justify these claims and guide implementation. This paper presents five field studies of five performance‐reporting systems to begin building theory. Four locations are optimistic; one is not. Mere adoption of performance reporting is not effective. Broad involvement across all government levels is important. Communication and integration with strategic planning and agency management are essential. Two theoretical streams, accounting in organized anarchies and the constitutive role of accounting, are useful theoretical bases.     

Unpacking LogM: Toward a More General Theory of Party System Density

The standard model of political party system density combines two traditions to explain why some countries have more political parties than others, one tradition that emphasizes social cleavages and another that emphasizes electoral institutions, especially district magnitude. Despite its considerable success, there are several reasons to be less than fully satisfied with the standard model. We examine two of these problems associated with the scope of strategic voting and the functional form of the specification used to test the model. In doing so, we contrast the standard interpretation with an organizational ecology model that accounts for what the standard model did so well, but also accounts for important anomalies it ignores. We reexamine some of the key analyses that have been used to test the standard model to assess the severity of its limitations and the utility of the rival organizational ecology account.     

Financial Reporting by Australian Nonprofit Organisations: Dilemmas Posed by Government Funders

Nonprofit organisations comprise a growing and important sector of the Australian economy. This sector is being used by governments to an increasing extent for the delivery of services. The most common manner in which nonprofit organisations are funded by government is through the provision of grants, contracts or service agreements. Nonprofits discharge their accountability for these funds through reporting guidelines issued by the government funders. This article examines the financial accountability requirements of government funders, in one jurisdiction in Australia to support the central argument that the emphasis on ‘upward and external’ accountabilities serve as a functional and control tool on the sector. This emphasis detracts from the development of the ‘downward and internal’ mechanisms of accountability which are the essential building blocks for the strategic development of the capacity of the sector to respond to calls for greater accountability.     

Ordoliberal Lessons for Economic Stability: Different Kinds of Regulation,Not More Regulation

Since the Global Financial Crisis of 2008 the term “ordoliberalism” has experienced a marked revival. This discussion tends to focus on the need for more state intervention. Yet this misrepresents the core ideas of ordoliberalism because its main concern is not with “how much” but with “what kind of” intervention is needed. Thus, this article seeks to clarify the ordoliberal position, in particular its key distinction between market conforming and nonconforming state intervention. Discussing the current financial crisis, it also evaluates the potential benefits and drawbacks of ordoliberalism. The article rebukes rhetorical shortcuts that equate every economic policy coming out of Germany with ordoliberalism. It also suggests that while the ordoliberal conception does not necessarily provide a solution to the current problems in the short run, in the long run it may form the basis for a sounder conception of economic regulation than more libertarian views can offer.     

Accountability in Governance Networks: An Assessment of Public,Private, and Nonprofit Emergency Management Practices Following Hurricane Katrina

What is the most effective framework for analyzing complex accountability challenges within governing networks? Recognizing the multiscale and intersector (public, private, and nonprofit) characteristics of these networks, an accountability model is advanced organized around democratic (elected representatives, citizens, and the legal system), market (owners and consumers), as well as administrative (bureaucratic, professional and collaborative) relationships. This concept draws from 2005 events following Hurricane Katrina. Multiple failures of governing networks to plan for and respond to Katrina include a breakdown in democratic, market, and administrative accountability as well as a pervasive confusion over trade‐offs between accountability types emerging from crises. This essay offers several useful recommendations for emergency management planners as well as for those who teach and research.     

'Managing for Outcomes': Accountability and Thrust

Central agencies in New Zealand are now defining public management performance to include both the quality of a manager's 'account' of output-outcome links and the manager's record of delivering efficient outputs. This article: (1) argues that the hard edge of accountability for deliverables must be dulled somewhat in order to pursue outcomes more vigorously; (2) shows how managers can use evaluation tools known as theories-in-action or logic models to give accounts of policy and management thrust; (3) proposes preliminary performance criteria for outcomes-focused management; and (4) attempts to sketch a new 'managing for outcomes' accountability bargain. The conclusions apply broadly to any jurisdiction interested in holding managers accountable for outcomes-focused management.     

Financial Regulation in the United States: Lessons from History

History is institutional memory writ large. One looks at economic history to see what problems recur, what causes them to recur, what solutions have worked best in the past, and which interventions have made the problems worse. The authors argue that a moderately complex interaction between the workings of the financial sector, the way in which the political system is organized, and the administration of regulation makes perfect regulation of the financial sector extremely unlikely. Many of these problems arise as a result of conflicting incentives for those participating in and regulating the financial field. The authors find that some proposed solutions have improved matters but have costs, and that some proposed solutions have actually worsened problems in the financial sector.

Peoples and governments never have learned anything from history, or acted on principles deduced from it.
— Georg Wilhelm Friedrich Hegel, 1837

     

The Power of Nonprofits: Mechanisms for Nonprofit Policy Influence

The dramatic increase in public funding for nonprofit organizations has raised concerns about the potential disadvantages of a nonprofit sector that is too reliant on government funding. Using nonprofits to deliver public programs also presents risks for the public sector, but the question of nonprofit policy influence is largely absent from discussions of public–nonprofit service collaborations. The motivation for this article stems from the contradiction between the perceived weakness of publicly funded nonprofits and their potential for policy influence. This research asks, how do nonprofits exert policy influence? Using a grounded theory approach, the research draws on the attitudes and experiences of professionals and elected officials involved in policy making and policy implementation in the area of low‐income housing. The findings indicate a variety of mechanisms through which the government–nonprofit relationship can strengthen the power of nonprofit organizations, sometimes while weakening their government counterparts.     

Accountability and Coalitions: Evidence from a Negotiation Experiment

This article tests the effect of accountability on negotiation outcomes in a face‐to‐face classroom experiment. Student participants were asked to form coalitions in groups of three. In the treatment condition, negotiators were held accountable by a personal forum during the formation of the coalition. In the control condition, negotiators were not held accountable. Results show that accountability leads to lower group performance in coalition negotiations. Accountability also reduced the willingness of negotiators to include all negotiators in a “grand coalition.” Rather, accountable negotiators reached agreement with a subset of negotiators. Accountability increased the odds of reaching no agreement. These findings challenge the idea of increased performance as a result of public accountability in the context of coalition negotiations.     

The New Governmental Financial Reporting Model under GASB Statement No. 34: An Emphasis on Accountability

After more than a decade and a half of research, study, and public comment, the Governmental Accounting Standards Board (GASB) in June 1999 issued the standards for a new governmental accounting model, GASB Statement No. 34, Basic Financial Statements—and Management's Discussion and Analysis—for State and Local Governments (hereafter Statement No. 34). These new standards introduced significant operational accountability by adding a set of additional government-wide financial statements to the current set of fund-based financial statements, which had previously focused on fiscal accountability. Other changes have resulted in substantially improved accountability in the government reporting model.     

Nonprofit equity: a behavioral model and its policy implications.

This article assumes that nonprofit decisionmakers have an incentive to earn and accumulate surpluses, and it suggests six reasons for this being the case. Based on the assumption that both the program outputs and the equity of a nonprofit yield satisfaction to its decisionmakers, a behavioral model is developed. This is used to derive a demand function for equity, which is then applied to a national sample of 6168 charitable nonprofits drawn by the Internal Revenue Service for the 1985 taxable year. The results substantiate the hypothesis that nonprofit decisionmakers consciously plan to increase their organization's equity. Currently, evidence of continued equity buildup is not sufficient to call into question a nonprofit's exempt status, because federal tax laws assume that surplus accumulations will ultimately be used in support of program mission. However, equity accumulation can become excessive. We present several criteria to define excessive equity accumulation and discuss why large equity accumulations may not be in the best interest of society.     

English Councillors and Mayoral Governance: Developing a New Dynamic for Political Accountability

Much has been written about the arrival of directly elected mayors into the English political landscape. The responses of the councillors serving on those councils to the arrival of elected mayors, has by comparison, been neglected. Yet, the construction, by councillors of a new role as the guarantor of local political accountability within mayoral councils, requires councillors to develop new patterns of political behaviour which challenge long‐held assumptions about the role of the councillor as a political representative. The paper reports the findings of research conducted amongst councillors on England's mayoral authorities, which explored how councillors have responded to the arrival of an elected mayor and what mayoral government means for our understanding of the role of the councillor within English local government.     

Budgeting for Accountability: Municipal Budgeting for the 1990s

The emphasis of a public budget depends on the time and circumstances in which it is developed. During the 1990s, for example, the emphasis has increasingly been on accountability due to widespread public belief in recent years that government is uncontrollable and responds only to special interests. Over the past few years, local budgeters have begun to adapt to this new environment by improving the accountability of the budget to the public. This article summarizes some of the changes taking place and suggests some additional changes that could be adopted to make local budgeting more accountable.