A framework for the assessment of mandatory accountability

To analyse how and to what extent regulatory agencies are required to render account, a framework for the assessment of mandatory accountability will be developed. Two questions are central here:

  • (i) What qualifies as mandatory accountability?
  • (ii) What types of mandatory accountability can regulatory agencies potentially be subject to?

Let us first have a look at the meaning of the concept of accountability and the subcategory of mandatory accountability.

In this study, accountability is defined as the degree to which an actor A is obliged to offer or is committed to offering information on, and explanation of, his or her conduct to another actor B, and may be sanctioned for this conduct. This definition resembles the definition by Bovens which is taken as the point of departure in the introduction to this volume, and which portrays accountability as 'a relationship between an actor and a forum, in which the actor has an obligation to explain and to justify his or her conduct, the forum can pose questions and pass judgement, and the actor may face consequences' (2007: p. 450). In line with this definition, the possibility of sanctions - but not the actual imposition of sanctions - is regarded as a constitutive element of the concept. Thus, a full accountability arrangement is characterized not only by the obligation to inform and explain - which can in principle be non-committal - but also by the possibility of certain conduct being sanctioned (cf. Bovens 2007: p. 451). Furthermore, as set out in the introductory chapter, the concept consists of two constitutive elements: an element of answerability - actor A needs to explain and justify its conduct - and an element of enforceability - actor B can evaluate and/or sanction this conduct.

The definition departs from Bovens's conceptualization in its emphasis on the ordinal nature of the concept. Various scholars, including Bovens, conceive of accountability as dichotomous, with actors being either accountable or not (cf. Schedler 1999; Philp 2009). When such definitions are used to determine whether instruments are referents of the concept, some instruments are dismissed for their lack of one of the components. For instance, the use of definitions that incorporate the component of potential sanctions results in the exclusion of legal instruments that require an organization to explain its (financial) conduct to an audit office if the latter does not have the possibility to sanction the conduct. As accountability is regarded as one of the many social phenomena which are a matter of degree rather than absent or present, it is defined as an ordinal concept in this study. Hence, actors can be accountable to various degrees, ranging from not accountable at all to highly accountable.

Though this study focuses exclusively on the mandatory type, accountability can also be voluntary in nature. While mandatory accountability refers to accountability provisions that are imposed on an actor by another actor, voluntary accountability is self-imposed, referring to accountability practices that go beyond those required by law and other binding instruments (see Koop 2014). Because of its coercive nature, mandatory accountability is, from a democratic point of view, the more important of the two subcategories. Mandatory accountability leaves actors with less discretion over the choice to render account and the type of conduct for which account is rendered. Hence, it may offer a more adequate means to prevent and detect shirking and misuse of public authority.

Mandatory accountability comes in different forms. First, agencies can be required to render account for various aspects of their conduct. Three aspects for which agencies may have to render account are often distinguished (Behn 2001: pp. 6-10; Bovens 2007: pp. 459-460):

  • (i) finances,
  • (ii) performance and
  • (iii) fairness

First, accountability for finances, or financial accountability, has the strongest connection to the roots of the concept of accountability (Bovens 2007: pp. 448-449). Like the words 'account' and 'accounting', accountability can be traced back - through Old English and Old French - to the Latin word compUtare, which is closely related to the verbs 'to count' and 'to reckon' (Behn 2001: pp. 6-7). Thus, accountability for finances refers to bookkeeping, and to actors explaining how they have spent the money with which they have been entrusted. In the public sector, this type of accountability typically encompasses a justification of the way in which taxpayers' money is spent. The central question is 'whether the organization and its officials have been wise stewards of the resources with which they were entrusted' (Behn 2001: p. 7).

Second, agencies and other public organizations may have to render account for their performance. The main question is, as Behn (2001: p. 10) puts it, '[a]re the policies, programs, and activities of government producing the results that they were designed to produce?' For accountability for performance to take place, there must be objectives or benchmarks that the actors in question aim to achieve, followed by information on, and evaluation of, the actual performance of the actors.

Third, agencies may be required to render account not only for the consequences of their actions, but also for the way in which they act. In other words, they may have to render account for acting fairly and non-arbitrarily. As Behn formulates it:

We want government to be fair to its employees and to its contractors. We want government to be fair to all of the clients of its various programs. We want government to be fair when it provides services to citizens, when it taxes citizens, when it accuses citizens of violating the law. We want government to be fair - exceptionally fair.

(2001: p. 8)

However, fairness is an elusive concept that can be interpreted in various ways. To make it more concrete, accountability scholars often talk about rendering account for following the rules, procedures and standards that have been established to ensure fairness and avoid arbitrariness.

The three types of accountability can be directed at different actors. In the introductory chapter, three directions of accountability are distinguished:

  • (i) upwards,
  • (ii) horizontal and
  • (iii) downwards.

While upward accountability is directed towards the political principal, horizontal accountability refers to accountability to bodies with a similar status in the public administration - audit offices, ombudsmen, courts and other oversight bodies - and downward accountability is focused on non-governmental stakeholders such as users, regulatees and society at large (cf. Scott 2000; Bovens 2007: p. 460). Table 4.1 includes the different types of accountability that can be distinguished based on the aspect of the conduct for which account is rendered and the direction of the accountability relationship. For each type, the provisions that can be found in the statutes of regulatory agencies are listed, based on previous studies on the accountability of independent agencies. Some provisions may fit more than one type; in such cases, they have been placed in the category in which they fit best.

First of all, accountability for finances may be upwards, horizontal or downwards in nature. In the case of upward accountability for finances, agencies have to render account to governments and parliaments. Agencies may be required to submit annual itemized budgets and annual

Direction of the accountability relationship

Upwards

Horizontal

Downwards

Aspect of conduct Finances

  • - Itemized budget to government
  • - Itemized budget to parliament
  • - Financial report to government
  • - Financial report to parliament

- Financial report to account office

  • - Publication of itemized budget
  • - Publication of financial report

Performance

  • - Activity plan to government
  • - Activity plan to parliament
  • - Activity report to government
  • - Activity report to parliament
  • - Parliamentary hearing of the agency head
  • - Publication of the activity plan
  • - Publication of the annual report
  • - Publication of the regulatory decisions
  • - Publication of the minutes of the board meetings
  • - Consultation procedures

Fairness

  • - Possibility to dismiss the agency head in case of misconduct
  • - Possibility to dismiss the board members in case of misconduct
  • - Approval rules of procedure needed
  • - Judicial review
  • - Ombudsman procedure
  • - Publication of the rules of procedure
  • - Publication of register of interests

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financial reports, and politicians may have the ability to disapprove these documents (for example, Koop 2011). Accountability for finances may also take the form of horizontal accountability, with an agency required to submit their financial reports to an audit office that examines the probity, legality, efficiency and effectiveness of the agency's spending and reports on its assessment to politicians and the public at large (Pollitt and Summa 1997; Scott 2000; Bovens 2007: p. 456). Finally, financial accountability may be directed downwards, towards the regulated sector and other non-governmental stakeholders, with provisions for the publication of the annual itemized budget and the annual financial report. These provisions are primarily related to the answerability element of accountability, as non-governmental stakeholders do not normally have formal powers to sanction agencies for their financial conduct.

Second, accountability for performance usually takes an upward or downward direction. Agencies may be required to submit their annual activity plan and annual activity report to government and parliament, and politicians may have the ability to disapprove these documents (Koop 2011). The statutes may also require the organizations to publish these activity plans and reports, which enhances the downward accountability (cf. Bovens 2007: p. 457). Furthermore, agencies maybe required to publish their decisions and the minutes of board meetings, and they may have to set up consultation procedures, thus allowing stakeholders to give feedback on the policies and activities of the organization (cf. Majone 1999: p. 14).

Third, accountability for fairness may be upwards, horizontal or downwards. Politicians may have the ability to disapprove the rules of procedure that an agency drafts, and they may also have the ability to dismiss the agency head and the board members in case of misconduct (Koop 2011). Judicial review of regulatory decisions is an important provision for horizontal accountability for fairness (Majone 1999: p. 14; Shapiro 2002; Bovens 2007: p. 456). Other horizontal provisions relate to the ability of an ombudsman to investigate the fairness of the conduct of agencies (Scott 2000; Bovens 2007: p. 456). Finally, downward accountability for fairness may take the form of provisions for the publication of the rules of procedure and the publication of a register of the interests of the board members.

 
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