THE NEXUS BETWEEN AGENCIFICATION AND HORIZONTAL ACCOUNTABILITY: A MULTI-COUNTRY SURVEY ANALYSIS.

• Author: Verhoest, Koen

1. Introduction

   Over the last 20 years, several public service organizations have been granted substantial formal and operational autonomy in numerous OECD-countries. In line with the literature (e.g., Pollitt et al., 2004) we will refer to this process as agencification. Crucial to this process is that public sector organizations are placed outside of traditional, departmental hierarchies. One of the major concerns however is whether political principals, the product of democratic election, are able to control properly these organizations and to make sure that they follow the public agenda. If not, one can worry that this structure might enact mandatory regulations which the citizens cannot influence, but have to obey (Christensen and Laegreid, 2007). Ministerial responsibility, although still a cornerstone for accountability, can indeed have a number of shortcomings when applied to autonomous public sector organizations. As discussed by Schillemans (2008) one such shortcoming is the fact that the assessment of the quality of services can be hardly transported through democratic processes. Moreover, the focus of ministerial oversight tends to be limited to political priorities and risks. A second important shortcoming is the fact that the growth in size and complexity of present-day public administration has led to fragmented practices of control and administration that are ill-adapted to hierarchical models of accountability, making the doctrine of ministerial responsibility less and less applicable.

   As a way to overcome these deficiencies in traditional vertical accountability relations, several authors (e.g., Bovens, 2005; Schillemans, 2011) point at new forms of accountability, making the accountability regime of public organizations more and more divers. However, also other shifts in accountability have been detected, such as forms of accountability that are directed towards third parties, outside of the primary principal-agent relationship. The rise of these additional mechanisms of accountability has been described in different ways; many authors have coined these kinds of accountability mechanisms as 'horizontal' forms of accountability (Bovens, 2005; Schillemans, 2011). These forms of accountability do not directly address the political principals of agencies but aim at significant stakeholders such as clients (Pollitt, 2003), professional peers (Thatcher and Stone Sweet, 2002), the use of systems of quality control and risk assessment (Aucoin and Heinteman, 2000), codes of conduct (Flinders, 2001), and exit and voice (Meijer and Schillemans, 2009). However, it remains unclear to what extent such alternative accountability mechanisms are really effective (Schillemans, 2008). Yet, the idea that representative government requires accountability to the general public is a core value of democracy and thus public administration. Pollitt (2008) even claims that 'almost everyone, it seems, is agreed that accountability is a good thing, that is fundamental to liberal democracy and that we need more of.'

   The goal of this article is to examine whether managerial autonomy can be considered a key factor for explaining the existence and use of horizontal accountability mechanism or the absence (or presence) of vertical accountability mechanisms. Managerial autonomy is likely to be a pull-factor towards horizontal accountability, giving managers the leeway to devise additional accountability mechanisms. The absence of vertical accountability mechanisms on the other hand could signify a 'push' factor. Agencies will seek ways to be 'accountable', not because they enjoy being controlled but because they may be perceived as being important (Mill, 1962; Olsen, 2013). The remainder of this article is organized as follows. Section 2 discusses accountability into more detail and relates the concept to post-New Public Management (post-NPM) reforms and agencification. The used data are described in section 3. In the fourth part, we discuss the used methodology and results, offering a detailed insight on how horizontal accountability mechanisms relate to the level of de facto autonomy. The fifth part contains the conclusions.

2. Accountability, post-NPM and agencification

   Although the concept of accountability is widely used in public administration, there exists no unanimity on the meaning of the concept (Brandsma and Schillemans, 2013; Behn, 2001; Mulgan, 2003; Bovens, 2007). As Brandsma and Schillemans (2013) indicate, many authors set out to produce their own specific definitions of accountability making it seem like an ever-expanding concept, which has come to stand as a general term for any mechanism that makes powerful institutions responsive to their particular publics (Brandsma and Schillemans, 2013; Mulgan, 2003, p. 8). Nonetheless, there is an overlap in what many authors present as the core of their definitions of accountability. The basic notion of accountability is understood to be a communicative interaction between an accountor and an accountee, in which the former's behavior is evaluated and judged by the latter, in light of possible consequences (Bovens, 2010; Mulgan, 2003; Schillemans, 2011).

   The relationship between a public sector organization and the oversight government is a typical example of a principal-agent relationship, whereby the public sector organization acts as the agent of their political and administrative principals. Principal-agent theory emphasizes that the agent may use its autonomy to behave opportunistically (Jensen and Meckling, 1976). Subsequently, traditional forms of accountability mechanisms in public administration are often vertical and characterized by a superior (oversight government) demanding accountability from a subordinate (agency).

   However, several scholars have pointed at important changes in accountability systems resulting from NPM reforms (Denhardt and Denhardt, 2007). The increased autonomy of public sector organizations has limited the possibilities for strict ministerial control (e.g., OECD, 2002; Flinders, 2004; Haque, 2000; Schillemans, 2008). For instance, OECD (2002) points to some general problems, such as the lack of clarity regarding roles and accountability of top governance structures (appointment and evaluation of CEOs and boards) and weak accountability mechanisms to ministers and ministries, parliament and civil society. The introduction of new vertical accountability mechanisms such as result-oriented reporting, multi-year performance agreements and monitoring mechanisms aim at strengthening accountability to minister and ministries. Most of these mechanisms are a new category of auditing, monitoring and evaluating mechanisms which focus specifically on efficiency and performance (Power, 1997). NPM has thus led to a proliferation of various monitoring and regulating bodies designed to safeguard some 'public' standards in the absence of direct ministerial control (Hood et al., 2004; Scott, 2000). These kinds of accountability mechanisms are obviously intended to limit the independence of an organization in undertaking actions. Yet, an independent but accountable agency performs its tasks without political interference, but its decisions are scrutinized afterwards, so that it operates under the shadow of possible sanctions. To put it another way: accountability is to 'trust but verify' (Behn, 2001, p. 106). The focus of vertical accountability mechanisms thus lies on ex-post result control.

   Furthermore, public sector organizations are also becoming more and more externally oriented, with a stronger focus on the provision of flexible and tailored responses to citizens' needs (Van Ryzin, Muzzio and Immerwahr, 2004). Denhardt and Denhardt (2007, p. 119) point out that 'Public administrators are and should be held accountable to a constellation of institutions and standards, including the public interest; statutory and constitutional law; other agencies; other levels of government; the media; professional standards; community values and standards; situational factors; democratic norms; and of course, citizens'. Romzek and Ingraham (2000) refer to the hierarchical, legal, professional and political types of accountability. Stone (1995) distinguishes five modes of administrative accountability: parliamentary control, judicial/quasi-judicial review, managerialism, constituency relations (downwards and sidewards) and market (Stone, 1995, p. 511).

   Consequently, also other mechanisms are developed to improve the accountability of autonomous public organizations directly to citizens, clients, customers and other groups, for example by the inclusion of these groups in boards, the distribution of annual reports, and freedom of information laws. As discussed by Schillemans (2011), many of these new mechanisms can be understood as horizontal forms of accountability, as they do not directly address the political principal of agencies, but aim at significant stakeholders such as clients (Pollitt, 2003), or professional peers (Thatcher, 2002), and use systems of quality control (Aucoin and Heinteman, 2000), codes of conduct (Flinders, 2001) and exit and voice (Meijer and Schillemans, 2009). Literature (e.g., Mulgan, 2003) indicates that accountability is linked to some specific key questions: who is accountable, to whom, about what, and how? Our distinction is based on the 'to whom question'. We define horizontality as being accountable to any external third party stakeholder--clients, customers, board members. This assumption belies, contrary to the work of O'Donnell or Schedler, the possibility that these parties outside of the traditional hierarchy can exert command and control authority. These new forms and tools of accountability are, for example, performance audit and reporting, client panels, scorecards and benchmarks, professional evaluations, etc. For some of these horizontal accountability practices the accountees are not provided with strong...