The Accountability of International Nongovernmental Organizations (INGOs) E-Book

Alice Hengevoss

• Herausgeber: Books on Demand
• Kategorie: Fachliteratur
• Serie: CEPS PhD Series
• Sprache: Englisch

Seitenzahl: 194

Veröffentlichungsjahr: 2023

Beschreibung

This thesis deals with the concept of accountability in international nongovernmental organizations INGOs). The four chapters focus on the theoretical and practical implications of a comprehensive approach to INGO accountability. Comprehensive INGO accountability goes beyond the donor-centric focus on financial accountability, and further includes outcome assessment processes and stakeholder dialog. The findings suggest that INGOs that implement such processes yield more effective programs as well as a stronger mission orientation. This implies that accountability is not merely to be understood as a necessary evil that occurs separately from the organization's core operations. Instead, comprehensive INGO accountability is integrated in organizational processes, and has the strategic value of strengthening organizational performance and mission orientation. It is based on dialog, and therefore is constructive in nature and contributes to more democratic organizational decision-making. In light of the increasingly political role of INGOs, implementing comprehensive accountability can be expected to become indispensable to ensure their organizational legitimacy.

Leseprobe

PREFACE

Introduction

This thesis examines the concept of accountability in international nongovernmental organizations (INGOs). INGOs have been criticized for primarily engaging in market-driven and inherently donor-focused accountability practices (Cavill & Sohail, 2007; Crack, 2013b; Hielscher et al., 2017; Mitchell & Schmitz, 2014; O’Dwyer & Boomsma, 2015). This has raised concerns regarding the democratic legitimacy of INGOs operating as private organizations but providing public goods and services (Goodin, 2003; Pallas et al., 2015; Wellens & Jegers, 2014). Consequently, there is a general plea for INGOs to adopt a more comprehensive approach to accountability – one that addresses the interests of a wider set of stakeholders, and of beneficiaries in particular (Crack, 2013a; Mitchell et al., 2020; O’Leary, 2017; Schmitz et al., 2012; van Zyl & Claeyé, 2019). The thesis consists of four articles that were part of my PhD research project. They all address questions on what constitutes a comprehensive approach to INGO accountability, and discuss the implications for organizational performance and strategy thereof. This thesis aims to advance research on INGO accountability by a) providing a theoretical foundation to conceptualize a comprehensive approach to INGO accountability, and b) by offering empirical evidence for the strategic advantage of being accountable to a wider set of stakeholders, and to beneficiaries in particular. This preface serves as an overview of the larger context of this research by emphasizing the relevance, motivation, and approach of my thesis, explaining the research questions and research process, and providing an overview of the subsequent four articles.

Relevance

INGOs have become important societal actors – not only on the local level, but increasingly in global governance forums (Mitchell et al., 2020). They are defined as nonprofit organizations (NPOs) that are headquartered in one country and have programs and mandates outside that home country (Boyer & Kolpakov, 2018). Traditionally, and with a local focus, INGOs act as providers of public goods and services in regions where state agencies lack the capacity to do so (Prakash & Gugerty, 2010). During the initial COVID-19 outbreak in February 2020, toprovide a timely example, Helvetas, a Swiss INGO, moved fast to provide partner organizations in developing countries with sanitary supplies and information material to combat the outbreak (Helvetas, 2020). The amplified reach and intensity of socioeconomic and environmental challenges has further led INGOs to become important actors in global governance forums that significantly shape international policy debates and outcomes across a wide spectrum of political issues (Mitchell et al., 2020; Pope et al., 2018). The United Nations Global Compact (UNGC) – today’s largest multiactor global governance initiative –, for example, systematically involves INGOs as consultants to further develop corporate responsibility debates and foster the Sustainable Development Goals (SDGs) (Lim, 2021). Consequently, INGOs increasingly become political actors with significant influence on a global scale. Their crucial role on the local level as well as their increasingly political engagement has put INGOs’ accountability under closer public, and subsequently, academic scrutiny.

When assessing the context INGOs operate in, it becomes apparent that there are several challenges to INGO accountability. First, like all NPOs, INGOs operate in a multi-stakeholder context- i.e. they work with, and for, a broad variety of stakeholders including beneficiaries, public and private donors, governmental institutions, employees and volunteers, and peer organizations (Brown & Moore, 2001). These stakeholders have their respective accountability demands that need to be addressed adequately. While providing accounts for INGOs’ financial efficiency may be meaningful to donors or governmental authorities (Goncharenko, 2019), beneficiaries or peer organizations may require more exchange-based and learning-oriented forms of accountability (Berghmans et al., 2017; Crack, 2013b). Challenges arise when accountability demands oppose or diverge (Ebrahim et al., 2014). For instance, requirements for low administrative and overhead costs may conflict with requirements for investments in administrative infrastructure or employing skilled staff with the expertise to develop effective programs. Koppell (2005, p. 94) has elegantly described these challenges as multiple accountability disorder. In the case of INGOs, these challenges are further amplified by the geographic and cultural distance between stakeholders that result from the international context. Second, in many countries, regulatory requirements for NPOs are fairly liberal in comparison to reporting and disclosure requirements for their for-profit counter parts (Ahrens et al., 2016). In Switzerland, for instance, – with many prominent INGOs headquartered in Geneva – only INGOs with the legal form of a foundation are required to be listed in the Swiss trade register (Helmig et al., 2010). Their international field of activity further subjects them to different jurisdictions and inherent regulatory requirements. As of today, international law does not recognize INGOs as actors with legal personality (Thrandardottir & Keating, 2018). Consequently, legal guidance for INGOs’ accountability on the national and international level is weak, leaving INGOs to operate in what has been coined as a regulatory vacuum (Scherer & Palazzo, 2011). This, in turn, places more stringent requirements on the individual leaders of INGOs, as well as on the sector itself, to develop standards for adequately responding to different stakeholders’ accountability demands.

Scholars have argued that this liberal context and the high competition for scarce resources have incentivized the INGO sector to foster accountability practices that respond to requirements of the funding market and inherent donors’ demands (Cavill & Sohail, 2007; Crack, 2013b; Hielscher et al., 2017; Mitchell & Schmitz, 2014; O’Dwyer & Boomsma, 2015). As a result, INGOs are criticized for lacking accountability to stakeholder that have little market power, such as their beneficiaries. This highlights the power imbalance between those that give to INGOs and those that receive from INGOs, and raises concerns regarding the democratic legitimacy of INGOs that operate as private organizations but provide public goods and services (Goodin, 2003; Pallas et al., 2015; Wellens & Jegers, 2014). In light of INGOs’ important societal role, but even more so to address the criticisms mentioned, the nonprofit management research has yielded an important body of literature discussing a more comprehensive approach to INGO accountability – one that addresses the interests of a wider set of stakeholders, and of beneficiaries in particular (Crack, 2013a; Mitchell et al., 2020; O’Leary, 2017; Schmitz et al., 2012; van Zyl & Claeyé, 2019). A comprehensive approach to accountability is crucial for INGOs to adequately respond to the multi-stakeholder context and to operate responsibly in the regulatory vacuum.

Motivation

This thesis was motivated by the need for INGOs to become more democratic societal actors and the inherent need to reduce the power-imbalance between the INGO and different stakeholders. In particular, this requires INGOs to engage more closely with, and be accountable to, the individuals and communities they serve and whose interests they represent – i.e. their beneficiaries.

Contemporary scholarship offers valuable insights on the motivation for the sector to engage more closely with its beneficiaries. The principal motivation for responsiveness to stakeholders, other than those that provide financial resources or have regulatory power, is described to be a certain moral obligation for INGOs to be accountable to their beneficiaries (Dick & Coule, 2020; Lyons, 2018; Reich, 1964). A more instrumental argument is provided by studies that document an increase in monitoring and evaluation processes and engagement in INGO peer regulation initiatives in response to pressures from donors (Bromley & Orchard, 2016; Crack, 2013a; Dhanani & Connolly, 2015; Wahlén, 2014). This describes accountability as a necessary element of good governance that is driven by moral or instrumental concerns, but not directly coupled to organizational performance or strategy. Particularly for staff working in the field, accountability is reported to still be regarded as a “necessary evil” for INGOs to be able to focus on their main activities (Agyemang et al., 2017). However, there are first empirical studies indicating that engaging more closely with their beneficiaries can strengthen INGOs’ societal impact (Cavill & Sohail, 2007; Crack, 2018). Yet, these studies are generally based on small samples, and focus on a specific country-context and a handful of large, well-known organizations. The largest sample size found comprised 152 US-registered INGOs (Mitchell & Schmitz, 2014). To make more substantiated and generalizable claims about how a closer engagement with beneficiaries may strengthen INGOs’ organizational performance, cross-country data and larger sample sizes are required. To summarize, while scholars generally agree on the moral necessity of INGOs to adopt a more comprehensive approach to accountability, the reasoning for it remains primarily normative and theoretical. Yet, as mentioned earlier, the weak legal regulation and economic pressures can lead to misleading incentive structures in which the INGO sector will prioritize accountability demands of donors. Criticisms on donor-focused accountability as well as highly publicized scandals of unethical behavior of INGO employees show that the moral obligation is not enough to ensure the adoption and enforcement of comprehensive INGO accountability. Therefore, more managerial guidance and arguments are required.

From a nonprofit management researcher’s perspective, this raises the question as to whether a strategic managerial argument can be formed for INGOs to adopt a comprehensive accountability approach. This implies assessing whether by being accountable to their beneficiaries, INGO leaders could yield a strategic advantage for their organization. This, in turn, requires regarding accountability not solely as a necessary evil, but as a governance tool linked to organizational processes and outcomes. This thesis aims to make this link and shed light on the implications of different accountability approaches on INGOs’ performance and strategic orientation. Moreover, it aims at contributing to more large-n empirical studies on INGO accountability that allow making more generalizable claims. Better understanding the link between accountability and organizational performance, and providing empirical evidence for this link, will allow leaders of INGOs to make more informed and strategic choices regarding their accountability practice.

Approach

This thesis consists of conceptual and empirical research, and has both exploratory and confirmatory aspects to it. In a first step, more conceptual clarity on what a comprehensive approach to INGO accountability comprises was needed. The first article (“Reconceptualizing the Accountability of INGOs: From Neo-institutional Economic Theory to an Institutional Logics Approach”) is of theoretical nature and presents an overview of how the concept of INGO accountability has changed over time in the nonprofit management literature. It discusses how the concept has evolved along three defining properties including the stakeholders it addresses, the mechanisms it employs, and the aims of accountability practice. It then advances nine propositions on the implications of different theoretical approaches for the conceptualization of INGO accountability. In particular, it shows that neo-institutional economic theories lead to a donorfocused conceptualization of accountability that is linked to INGOs’ financial efficiency. Institutional logic theory, on the other side, allows assessing INGO accountability relationships that are not solely characterized by the market logic, and is therefore more suitable to describe accountability relationships between INGOs and beneficiaries. Moreover, it links accountability to organizational effectiveness rather than efficiency, and therefore captures a more relevant aspect of INGOs’ organizational performance. Consequently, a shift from neo-institutional economic theory toward an institutional logics approach is suggested.

The second article (“The Effect of Comprehensive INGO Accountability on Program Effectiveness: Towards a Discursive Logic”) initiates the empirical, quantitative part of this thesis and is based on data collected through an international survey among leaders of INGOs. The article builds on the afore suggested institutional logics approach and defines different INGO accountability logics. Based on partial least squares equation modeling, it empirically explores the drivers of these logics and assesses their impact on INGOs’ organizational effectiveness. The methodological approach and data set used allow providing evidence for the causal link between comprehensive INGO accountability and organizational performance in terms of program effectiveness. This allows providing evidence for a strategic link between accountability practice and organizational performance, and addresses the need for cross-country data and larger sample sizes in research on INGO accountability.

The third article (“Peer Regulation as a Mediating Factor to Strengthen INGOs’ Mission Orientation: A PLS-SEM Model”) considers INGOs’ economic and political institutional context and focuses on the effect of peer regulation – as one specific accountability mechanism – on INGOs’ strategic orientation. Based on the same survey data and methodological approach, the article compares the explanatory value of resource dependence theory and constructivist theory to INGOs’ motivation to engage in peer regulation. The article therefore links accountability to the strategic orientation of INGOs. The methodological approach and data set used allow providing further evidence for a causal relationship between an INGOs’ approach to accountability and its strategic orientation. Testing the explanatory value of different theoretical approach allows for further theory building in the research on INGO accountability.

The fourth article (“Assessing Nonprofit Organizations’ Impact on Multiactor Global Governance Initiatives: The Case of the UN Global Compact”) adds a different perspective on INGOs’ accountability. It addresses the increasingly political role of INGOs and other NPOs, and the inherent need to demonstrate organizational impact. It empirically assesses the engagement of NPOs in the UNGC – the largest multiactor global governance initiative worldwide. This sheds light on INGOs accountability in, and impact on, global governance initiatives. The data for this analysis was provided by the United Nations office responsible for UNGC reporting, and offers a cross-country analysis based on a large sample size. The analysis is based on a panel regression which allows testing for causal effects.

Research Questions

The thesis aims at answering one central research question:

Is there a strategic argument for INGOs to engage in a comprehensive approach to accountability?

This primary research question is subdivided into several working questions. These questions are presented subsequently, categorized by different scopes of research:

Conceptual questions

Which conceptual approaches to INGO accountability are discussed in nonprofit management literature? (addressed in paper I)

Can different INGO accountability conceptualizations be linked to different organizational performance measures? (paper I)

What constitutes a comprehensive approach to INGO accountability? (paper II)

Theoretical questions

What is the theoretical foundation of the different INGO accountability conceptualizations? (paper I)

What theoretical approach describes the motivation of INGOs to engage in peer regulation? (paper III)

Empirical questions

Does a comprehensive approach to INGO accountability yield a strategic value in terms of increased organizational effectiveness? (paper II)

Can peer regulation help INGOs overcome economic and political opportunity constraints? (paper III)

To what extent do INGOs and other NPOs strengthen multiactor global governance initiatives? (paper IV)

Practical questions

What are the external drivers INGO managers should focus on to strengthen comprehensive INGO accountability within their organization? (paper II)

What accountability mechanisms can INGO managers focus on to strengthen a missionoriented strategy? (paper III)

Research Process

One of the biggest learnings of writing a thesis is that research is definitely not a linear process. As mentioned beforehand, this thesis was motivated by the quest for a strategic argument for INGOs to be accountable to a broader set of stakeholders, including their beneficiaries. In a first step, this required creating more conceptual clarity around the concept of INGO accountability. It not only required to define whom INGOs are accountable to, but also establish for what and how INGOs practice accountability. This analysis allowed to establish a framework and terminology around the concept of INGO accountability. In particular, it became clear that there are multiple INGO accountability logics which describe accountability to different stakeholders, for different organizational outcomes, and that require different tools and organizational processes. This, in turn, required a theoretical foundation to establish a theoretical frame to further investigate these logics. Consequently, a theoretical shift form neo-institutional economic theories to an institutional logics approach was required. Finally, it became evident that more empirical research and comprehensive data was needed to advance research on INGO accountability.

The second article of this thesis (chapter 2) builds up on the developed framework for multiple accountability logics. It empirically analyzes the drivers of different logics as well as their impact on program effectiveness. The theoretical framework for this article draws from institutional logics theory which allows describing the means and ends of different accountability logics. The data used was collected through an international survey among leaders of INGOs. A questionnaire was developed and sent out to more than 1’400 INGOs worldwide, registered in the Swiss trade register and the Yearbook of International Organizations (YIO) (Union of International Associations, 2020). It consisted of survey items asking about different accountability practices, managerial challenges, and mission achievement in INGOs. One particular challenge during the sampling process was that there generally is no database with comprehensive information listing existing INGOs. Ironically, this is not least due to the low registration and reporting requirements for these organizations. As both of the used databases did not provide comprehensive contact information, e-mail addresses of INGO leaders were collected manually. To reach organizations from as many regions as possible – from the Global North and South – the questionnaire was translated to English, German, French, and Spanish. The survey was launched during the COVID-19 pandemic outbreak in Spring 2020. The initial low response rate clearly indicated that INGOs were strongly needed as first-responders in many regions of the word. However, after a few reminders, an adequate sample size of 201 INGOs was obtained – the largest cross-country sample size as of today (see Mitchell & Schmitz, 2014).

After having looked at the impact of different accountability logics on the organizational level, the third article of this thesis (chapter 3) was intended to look more closely at how the institutional environment influences INGOs’ accountability. It empirically investigates how exogenous influences including strong competition in funding markets and close proximity to political institutions affect the strategic orientation of INGOs. It further analyses whether peer regulation is an effective accountability mechanism to strengthen the strategic mission orientation in INGOs. The analysis draws from resource dependence theory and constructivist theory to evaluate INGOs’ motivation to engage in peer regulation. The study is based on the same survey data and methodological approach as the second article.

As I learned during the course of my research, the academic discourse on the increasingly political role of INGOs became more pronounced. This discourse has certainly intensified after the outbreak of the COVID-19 pandemic during which INGOs provided large scale support in regions where governmental agencies lacked the capacities to do so. Consequently, the fourth article (chapter 4) was aimed at looking more closely at the political role and impact of INGOs in multiactor global governance initiatives. It focuses on the case of the UNGC and assesses the impact of INGOs’ and other NPOs’ engagement on the initiatives’ activities. The study builds on insights from actorhood theory, which describes NPOs as purposeful societal actors with the social responsibility to not only provide evidence for their impact, but to effectively create societal impact. The article therewith contributes to the emerging literature on NPOs’ social responsibility. Data for this study was obtained via the United Nations’ office responsible for UNGC reporting and completed with other relevant data.

Figure 1 provides an overview of the structure of the thesis. The following section on the research output of the thesis describes the four articles in more detail.

Figure 1:Structure of the thesis

Research Output

This thesis contributes to the understanding of the concept of a comprehensive approach to INGO accountability and its implications for organizational performance and strategy. It provides a theoretical foundation that allows defining different INGO accountability logics. The results of the empirical analyses show that a comprehensive approach that comprises accountability demands of beneficiaries leads to more effective programs as well as a stronger mission orientation. This indicates that a comprehensive approach to accountability indeed provides a strategic advantage for INGOs. Moreover, the results indicate that INGOs and other NPOs have a significant impact in global governance initiatives. These findings are particularly relevant given the multi-stakeholder context, economic and political pressures in their field of activity, and increasingly political role of INGOs.

Central Findings

The first article (“Reconceptualizing INGOs’ Accountability: From Neo-institutional Economic Theory to an Institutional Logics Approach”) lays the theoretical foundation for the research on INGO accountability. In a first part, it develops a systematic overview of the current discourse on INGO accountability. It identifies three defining properties along which the concept of INGO accountability can be described: Primary recipients, content, and aim. This allows documenting a shift from a narrow conceptualization towards a more comprehensive approach. It shows that INGO accountability practice shifts from donor-focused toward a broader set of stakeholders, and to their beneficiaries in particular. Accountability mechanisms broaden from being results-focused toward being more process-oriented. For example, while financial reports are considered crucial, monitoring and evaluation and participative processes further become increasingly important aspects of INGO accountability. Moreover, the article highlights that accountability does not solely imply providing accounts for the financial performance or impact created, but further entails a deliberate engagement in discourse with relevant stakeholders to better understand their respective needs. Consequently, the aim of INGO accountability is not solely to provide evidence for their organizational performance, but also to create impact based on exchange with a broad set of stakeholders. By conceptualizing accountability as a means to create impact, instead of an organizational duty that occurs separately from its value creation, accountability is linked to an organizational process and outcome. In a second part, the article advances nine propositions on the implications of different theoretical approaches to the conceptualization of INGO accountability. In particular, it suggests that neoinstitutional economic theories, including principal-agent theory, stakeholder theory, and property right theory, create a narrow donor-focused conceptualization. This conceptualization further implies accountability for organizational performance in terms of efficiency. Applying institutional logics theory, on the other hand, is suggested to describe a more comprehensive conceptualization that defines different accountability logics, addresses a broader set of stakeholders, and describes accountability for organizational performance in terms of effectiveness. Linking accountability practice to organizational performance measures allows theorizing a causal relation between the two variables, and hence lays the theoretical foundation to empirically investigate a strategic advantage.

The second article (“The Effect of Comprehensive INGO Accountability on Program Effectiveness: Towards a Discursive Logic”) conceptualizes a comprehensive approach to INGO accountability logics that is based on a resource-oriented logic, an outcome-oriented logic, and a discourse-oriented logic. It shows that expectations of the funding market, participation in peer regulation initiatives, a deliberate approach to communication, and the engagement of beneficiaries in different organizational processes are relevant drivers of a comprehensive approach to INGO accountability. Finally, it assesses the impact of the three logics on program effectiveness and shows that all three logics significantly contribute to increased program effectiveness. This indicates that accountability can be linked to measures of organizational performance – i.e. program effectiveness. Assessing this link based on partial least squares equation modelling (PLS-SEM) allows describing a causal relationship between a comprehensive approach to INGO accountability and increased program effectiveness. This finding, indeed, provides a strategic argument for INGO leaders to adopt a comprehensive approach to accountability in order to strengthen their organizational performance. Moreover, it ascribes a certain level of power to beneficiaries as they become important stakeholders to strengthen the program effectiveness of INGOs.

The third article (“Peer Regulation as a Mediating Factor to Strengthen INGOs’ Mission Orientation: A PLS-SEM Model”) assesses how exogenous influences including the competitive funding market and close ties to political institutions affect the strategic orientation of INGOs. The empirical analysis shows that these economic and political pressures can lead INGOs to sacrifice their mission orientation for resource security. However, it further shows that peer regulation initiatives are an effective accountability mechanism to strengthen INGOs’ missionoriented strategy despite these exogenous pressures. In particular, peer regulation initiatives initiate organizational learning processes which, in turn, strengthen INGOs’ mission orientation. This confirms the applicability of constructivist theory when measuring the effectiveness of peer regulation. Testing these links based on PLS-SEM provides further empirical evidence for a causal link between the accountability practice of INGOs, i.e. peer regulation, and their strategic orientation.