Accountability and Governance: Persistent Questions, New Challenges Paul L. Posner George Mason...
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Transcript of Accountability and Governance: Persistent Questions, New Challenges Paul L. Posner George Mason...
Accountability and Governance: Persistent Questions, New
Challenges
Paul L. PosnerGeorge Mason University
November 11, 2007
Consequences of Accountability Weaknesses
• Rampant corruption• Fiscal windfalls to principals and agents• Rent seeking• Undermining rule of law and predictability
necessary for investment• Sustaining and widening disparities• Inhibiting capacity to learn and adapt to
governmental performance shortfalls• Frustrating greater public involvement in
governance
Investment Climate Survey (World Bank 2006)
Bangladesh South Asia All nations
Reg. consistency 78% 52% 47%
Econ/reg certainty 44% 23% 30%
Expectation for gifts
86% 44% 22%
Corruption as major
58% 25% 30%
Confidence in judiciary
17% 48% 57%
Crime, theft as obstacle
39% 15% 20%
Accountability: The Elusive Concept
• The Building Blocks of Accountability – Legal compliance– Financial controls and stewardship– Program efficiency– Program effectiveness
• Evolution of focus
Accountability: Multiple Principals
• Organizational
• Political – voters, parties, elected representatives
• Legal
• Auditors and reviewers
• Professions
Accountability Foundations
• Management capacity• Information on finances and performance• Incentives
– Internalized public responsibility– Sanctions for violating laws– Inducements
• Transparency– Report cards– Freedom of information
Accountability Institutions
• Checks and balances within governments– Executive-legislative relationships
• Independent judiciary
• Party system
• Strong interest groups, NGO’s
• Competitive, free media
• Independent audit institutions
Congressional Oversight Tools and Strategies
• Hearings• Investigations• Support agencies audits/evaluations• Authorizations and reauthorizations• Approval of nominations• Transaction approval/veto• Budget and appropriations• Organization of executive agencies• Executive management reforms• Reports
Roles of the GAO
• A support agency for the Congress– Reports and testimonies addressed to congressional
members and committees– Institutional knowledge
• Oversight of executive agencies– Recommendations to agency heads– Rulings on procurements and spending
• Public reporting promotes transparency and accountability
• Inspectors General
Resources of GAO• Independence of Comptroller General reinforced
by 15 year term• Organized by 14 substantive teams and 11 field
offices• 3200 professional staff in numerous disciplines• Access to data held by executive agencies,
contractors, states• Processes reinforce independence and
neutrality
Accountability Barriers
• Traditions of informal rule and governance arrangements
• Lack of trust and continuous relationships among the key principals
• Weak management capacity• Underdeveloped pluralistic institutions• Absence of professional foundations for rule of
law• Wide disparities in economic resources• Low expectations for public services
Accountability: Reforming Governmental Institutions
• Enhancing the quality of the public service• Improving level of information collected by
government officials• Promoting greater transparency in sharing
information• Fortifying and creating independent institutions
to monitor and check performance• Clarifying goals and rules applying to programs
Accountability: The Shift from Government to Governance
• Establishing healthy NGO’s and free, open media
• Promoting more effective monitoring– Police patrol oversight– Fire alarm oversight
• Expanding the range of providers to decentralize service delivery
• Relying on private partners to provide resources and deliver services
Note: Executive branch civilian employees excluding postal service.
Source: Office of Management and Budget.
Th
ou
san
ds
of
Civ
ilia
n E
mp
loye
es
Bil
lion
s of
FY
20
00
Doll
ars
Shift in Public Management
• From program/agency to tools and actors
• From hierarchies to networks
• From public vs. private to partnerships
• From command/control to negotiation
• From management skills to “enablement”
• From internal controls to design
Grants-in-Aid
Transfer Payments to IndividualsSpend
Tax ExpendituresRevenues
Regulate
Perfor
mance
Mgm
t
Budge
tingHum
an Capit
al
Financ
ial M
gmtProcurement & Contracts
Vouchers
Social & Economic Regulation
Leases
Permit Trading
User Fees & Charges
Corrective Taxes & Fees
Exec A
genc
ies
Gov’t
Corpo
ratio
ns
For P
rofit
s
GSEs
State &
Loc
als
Non-Government
Fore
ign
Government
IT M
gmt
Government Credit & Insurance
Information, Training & Advise
Direct Services
Agenc
y Par
tner
ship
s
Feder
al Con
tracto
rs
State/L
ocal
Contra
ctors
Privat
e Ind
ividu
als..
.
Non-P
rofit
sFai
th-B
ased
Acquis
ition
s
Mgm
t
Rebuilding Involves Networking Among Sectors: Government Stakeholders in
Louisiana
FEDERAL
STATE
HUD SBAVAUSDA DOC DOD DHS
EPA HHSDOTTREAS DOI DOE DOJ
22Executive
Departments
Boards/ Commissions
LouisianaGovernor
Councils/ Programs
Louisiana Recovery Authority
13 Task Forces/Recovery teams
64Parish
Governments LOCAL
19 affected parishes
Orleans
Office of the Federal Coordinator for Gulf Coast Rebuilding
LouisianaSpeaks
UnifiedNeighborhood
Planning
Unique Accountability Challenges
• Accountability to multiple constituencies– Multiple actors empowered to bargain
• Third parties enjoy leverage – Political resources– Voluntary participation– Monopolies over beneficiaries– Information asymmetries
• Complex implementation chains
Privatization Pressures
• Supplant monopolies with competition
• Increase financing for public initiatives
• Improve technical capacity
• Promote greater flexibility
Public-Private Roles and Tools
Delivery/
Finance
Public Finance Private Finance
Public Delivery Direct Government
User Fees
Private Delivery Contract Vouchers
PPP’s
Traditional Direct
GovernmentFully
Private
Internal Managerial
Reforms
Quasi-Governmentalorganizations
Contracting for specificServices/products
Market based regulatoryapproaches
Public-PrivatePartnerships
Devolution
Tax creditsand vouchers
Divestiture
Benefits from Outsourcing
• Savings considerable when using competition
• Economies of scale
• Expanded access to expertise and technology
• Improved public sector performance when public service competes with private firms
Public Private Partnerships for Assets
• B = Build• D = Design• F = Finance• L = Lease• M = Maintain• O = Operate• P = Purchase• T = Transfer
• DB – contracts with public for design and construction
• FDBOM – private role in all phases
• BOT – private transfer to public
• PMO – sale from public to private
• LDO – private lease of public facilities
• LO/LPO – public lease/public lease-purchase
Public-Private Partnerships
• Classic PPP – Design, build, operate and maintain over many years
• Different from traditional outsourcing– Long term nature of contract– Private responsibility for multiple phases– Relationship between public and private collaborative,
not arms length– Competition limited due to large up front capital
necessary– Budgetary treatment annualized rather than up front
PPP’s: Rewards and Risks
• Private Sector Brings Capabilities– Financing – Capitalize underutilized assets– Technical expertise– Market efficiencies– Transfer of demand and supply risk to private sector
• Risks from Private Participation– Public values and support– Budgetary control and loss of revenue streams– Contingent Liabilities for shifts in market demand, political
changes, disasters and other contingencies– Oversight and Accountability– Truncated Competition
Requisites for Successful Public-Private Partnerships
• Consistent political support• Effective legal frameworks• Competent government negotiations of terms
and conditions• Competition among potential partners• Performance based contracts• Explicit risk allocations• Guaranteed revenue stream for private firms• Support from broader publics
Privatization Concerns
• Lack of competition reduces rationale for private over public– Exclusivity at outset- sole source– Overdependence over time – indispensable
• Accountability and principal agent issues• Cost shifting and cherry picking• Inherently governmental functions
– Public ensures we get right things done– Private ensures we do them right
• Transparency – assigning credit and blame
New Dimensions for Accountability
• Tool Choice – is contract most appropriate tool for the job?
• Design – are contracts designed to shift risk to private or public sector?
• Nature of network – how can government choose “principled agents”?
• Oversight – can government effectively specify and monitor private performance and resolve problems?