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Saving the Moral Capital of NGOs: Identifying One-Sided and Many-Sided Social Dilemmas in NGO Accountability

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Abstract

The literature on nonprofit management has embraced the concept of “accountability” to target urgent challenges related to NGO probity and integrity, and there have been attempts in the literature to use rational-choice-based governance approaches to solve them. Although the existing principal–agent frameworks provide important insights, they are limited to the analysis of financial relationships between NGOs and donors. We contribute to the literature in developing a comprehensive rational-choice-based governance approach to analyze all stakeholder relationships of NGOs. Applying the research program of ordonomics, we unpack two fundamental interaction problems: (a) the “stakeholder dilemma” between the NGO and a single accountability holder as a one-sided social dilemma and (b) the “competition dilemma” among rival NGOs as a many-sided social dilemma. We show that improving NGO accountability in relation to intended beneficiaries, peer organizations, and the general public also requires identifying the underlying governance problem as a competition dilemma focusing on collective self-regulation as a solution.

Résumé

La documentation sur la gestion des organismes sans but lucratif a embrassé le concept de « responsabilisation » pour cibler les défis urgents associés à la probité et à l’intégrité des ONG, et on y retrouve plusieurs tentatives d’utilisation des approches de gouvernance fondée sur des motifs rationnels pour les surmonter. Même si les cadres de type mandat-mandataire existants procurent des renseignements essentiels, ils se limitent à l’analyse des relations financières entre les ONG et les donateurs. Nous contribuons à ladite documentation en créant une approche complète de gouvernance fondée sur des motifs rationnels pour analyser les relations de tous les intervenants avec les ONG. En appliquant le programme de recherche ordonomique, nous découvrons deux problèmes interactionnels fondamentaux : (a) le « dilemme de l’intervenant » impliquant l’ONG et un seul individu responsable, présentant un dilemme social à une facette, et (b) le « dilemme de la concurrence » entre les ONG rivales, présentant un dilemme social à facettes multiples. Nous démontrons que la hausse de la responsabilisation des ONG envers les bénéficiaires « prévus », les organisations paires et le public en général requiert aussi l’identification du problème de gouvernance sous-jacent dans le cadre d’un dilemme de concurrence concentré sur l’autoréglementation collective comme solution.

Zusammenfassung

Die Literatur zum Nonprofit-Management beschäftigt sich mit dem Konzept der „Rechenschaft“, um wichtige Probleme im Zusammenhang mit der Rechtschaffenheit und Integrität von Nichtregierungsorganisationen (NROs) anzusprechen. Es wurde versucht, die Probleme mithilfe von Führungsansätzen zu lösen, die auf rationalen Entscheidungen beruhen (rational-choice-based governance). Zwar geben bestehende Prinzipal-Agent-Rahmenwerke wichtige Einblicke, doch beschränken sie sich auf die Analyse der finanziellen Beziehungen zwischen den NROs und den Spendern. Wir leisten einen Beitrag zur Literatur, indem wir einen umfassenden auf rationalen Entscheidungen beruhenden Führungsansatz entwickeln, um alle Stakeholder-Beziehungen der NROs zu analysieren. Unter Anwendung des ordonomischen Forschungsprogramms ergründen wir zwei wesentliche Interaktionsprobleme: (a) das „Stakeholder-Dilemma“ zwischen der NRO und einer Einzelperson, die Rechenschaft fordert, als einseitiges soziales Dilemma und (b) das „Wettbewerbsdilemma“ zwischen konkurrierenden NROs als vielseitiges soziales Dilemma. Es wird dargelegt, dass zur Verbesserung der Rechenschaft von NROs in Bezug auf die „vorgesehenen“ Leistungsempfänger, Peer-Organisationen und die allgemeine Öffentlichkeit auch das zugrunde liegende Führungsproblem als ein Wettbewerbsdilemma erkannt werden muss und man sich deshalb auf eine kollektive Selbstregulierung als Lösungsmechanismus konzentrieren sollte.

Resumen

El material publicado sobre la gestión de las organizaciones sin ánimo de lucro ha adoptado el concepto de “responsabilidad” para abordar desafíos urgentes relacionados con la probidad y la integridad de las ONG, y ha habido intentos en el material publicado de utilizar enfoques de gobernanza basados en la elección racional para resolverlos. Aunque los marcos de agente- principal existentes proporcionan percepciones importantes, se limitan al análisis de las relaciones financieras entre las ONG y los donantes. Contribuimos al material publicado desarrollando un enfoque de gobernanza basado en la elección racional para analizar todas las relaciones de las partes interesadas de las ONG. Aplicando el programa de investigación ordonómica, desvelamos dos problemas de interacción fundamentales: (a) el “dilema de la parte interesada” entre la ONG y un único titular de la responsabilidad como un dilema social de un lado y (b) el “dilema de la competencia” entre las ONG rivales como un dilema social de muchos lados. Mostramos que la mejora de la responsabilidad de las ONG en relación con los beneficiarios intencionados, las organizaciones de iguales y el público en general requiere también identificar el problema de gobernanza subyacente como un dilema de competencia centrándose en la autorregulación colectiva como una solución.

要約

非营利组织管理的著作已经将“问责性”概念纳入到与NGO廉洁和诚信相关的目标迫切的问题中,并且在著作中试图用基于合理选择的治理方法来解决这些问题。尽管现有的委托与代理框架提供了重要的见解,但只限于分析NGO与捐助人之间的财务关系。在制定基于委托与代理的完整治理方法,以便分析所有的NGO利益相关者关系方面,我们对著作做出了贡献。通过应用经济学研究计划,我们解开了两个基本的相互作用问题:(a)作为单边社会困境,NGO 和单一问责性持有者之间的“利益相关者困境”,以及(b)作为多边社会困境,竞争对手NGO之间的“竞争困境”。我们指出,要改善与“预期”受益人、同类组织和一般公众相关的NGO问责性,还要求将潜在治理问题识别为竞争性困境,此类困境注重将集体自我管理作为解决方案。

ملخص

إشتمل الأدب حول إدارة المنظمات الغير ربحية مفهوم “المساءلة” لإستهداف التحديات اامستعجلة المتعلقة بنزاهة المنظمات الغير حكومية (NGO) وأمانتها، وكانت هناك محاولات في الأدب لإستخدام نهج حاكم على أساس إختيارمنطقي لحلها. على الرغم من وجود أنظمة عامل رئيسي توفر معلومات هامة، إنها تقتصر على تحليل العلاقات المالية بين المنظمات الغير حكومية (NGOs) والجهات المانحة. نحن نساهم في الأدب في وضع نهج حاكم على أساس إختيار منطقي لتحليل كل العلاقات مع أصحاب المصالح من المنظمات الغير حكومية (NGOs). عن طريق تطبيق برنامج البحوث للترتيب ، نحن نفض مشكلتين تفاعل أساسية: (أ) “معضلة أصحاب المصلحة” بين المنظمات الغير حكومية (NGO) وحامل المساءلة واحد كمعضلة إجتماعية من جانب واحد و (ب) “معضلة منافسة” بين المنظمات الغير حكومية (NGO) المتنافسة كمعضلة إجتماعية متعددة الجوانب. نحن نبين أن تحسين مساءلة المنظمات الغير حكومية (NGO) فيما يتعلق بالمستفيدين المقصودين، منظمات الزملاء والجمهور أيضا” يتطلب تحديد المشكلة الحاكمة الأساسية بإعتبارها معضلة منافسة مع التركيز على التنظيم الذاتي الجماعي كحل.

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Notes

  1. The term ‘NGO’ is notoriously broad. It can be applied to a variety of different organizational forms (Vakil 1997). Based on a recent “comprehensive definition” by Martens (2002, p. 282), NGOs can be seen as “societal actors,” i.e., as “formal (professionalized) independent societal organizations whose primary aim is to promote common goals at the national or the international level.” We follow this broader definition, which also embeds Salamon and Anheier’s (1992) characterization of nonprofit organizations (NPOs) featuring institutionalization, independence, nondistribution constraint, self-government, and voluntary participation.

  2. According to Kane (2001, p. 10), moral capital is “a resource that can be employed for legitimating some persons, positions and offices and for delegitimating others, for mobilizing support and for disarming opposition, for creating and exploiting political opportunities that otherwise would not exist.” The “quantum” of moral capital is when “people judge the agents or institutions to be both faithful and effective in serving those values and goals.”

  3. The prevailing understanding of NGO accountability is perhaps most succinctly summarized by Slim as a “process by which an NGO holds itself openly responsible for what it believes, what it does and what it does not do in a way which shows it involving all concerned parties and actively responding to what it learns” (Slim 2002, original emphasis).

  4. In October 2016 the INGO Accountability Charter changed its name to Accountable Now. As the current website and many other important documents still name the organization INGO Accountability Charter, we prefer the ‘old’ denomination.

  5. In particular, a strong moral disposition of faith-based NGOs might prompt a stronger resistance in the face of dysfunctional incentives. Other important considerations include the opportunity cost to cancel contracts and attract alternative sources of funding (Cooley and Ron 2002, p. 30).

  6. For Heckman (2015, pp. 3–4), Gary S. “Becker abducted economics,” specifying that in “many of his efforts to understand economic phenomena, he brought creative insights in response to initial mismatches between models and data.”

  7. From a systems theory perspective, Valentinov and Chatalova (2016, p. 6) argue that overcoming social dilemma situations in general calls for a “weakening of incentives.” For an institutional economic perspective on how to establish a differentiated management of social dilemmas in modern society, cf. Hielscher and Pies (2016).

  8. We reconstruct the prisoners’ dilemma as a ‘one-shot-game,’ which is a special case and indeed very reductive. In fact, game theorists can show that the tendency to cooperate is much higher if games are played repetitively (Binmore 2011, Chap. 11). Yet, analyzing the situational logic of the underlying game helps describe the basic interaction problem and sheds light on the ‘rules of the game’ necessary to overcome the problem. Thus, our use of game theory serves to illustrate Buchanan’s (1987, 1990) constitutionalist distinction between ‚choices among rules‘ and ‚choices within rules.’ In a social dilemma, ‘choices within rules’ lead to an inefficient outcome. Improving this outcome requires a ‘choice among rules,’ i.e. a shift from game (a) to game (b) in Fig. 1.

  9. For explanatory purposes, we use archetypical and, indeed, simplified strategy options for both players. We try to keep the game as simple and abstract as possible to emphasize its broad applicability. Of course, depending on the situation, it is possible to design a game tailored more closely to empirical situations, including more specific strategies. For example, instead of a binary strategy choice of being “accountable” or “not being accountable,” a game could be reconstructed in which the NGO, e.g., Amnesty International, can choose among two action plans: one of which features “greater long-term accountability” and the other “lower long-term accountability” to intended beneficiaries. With the ordinal pay-offs unchanged, given that the first action plan faces higher investments than the latter, our simplified version of the rational-choice analysis can thus easily incorporate the time dimension as well.

  10. When applied to fulfilling their mission in service delivery, the strategies of NGOs can be reconstructed as “mission-supporting service delivery” and “mission-undermining service delivery.”

  11. We owe the idea of a “global responsible communication standard” to Kernaghan Webb. In private communication he outlined this concept as a way of fostering trustful and fair dialogues among actors of different sectors, in particular, between business firms and civil society.

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Authors and Affiliations

  1. School of Management, Centre for Business, Organisations & Society (CBOS), University of Bath, Claverton Down Rd, BA2 7AY, Bathwick Hill Bath, UK

    Stefan Hielscher

  2. Chair of Economic Ethics, Martin Luther University Halle-Wittenberg (Germany), Große Steinstraße 73, 06108, Halle (Saale), Germany

    Stefan Hielscher, Jan Winkin & Ingo Pies

  3. Faculty of Humanities and Social Sciences, School of Social, Historical and Literary Studies, University of Portsmouth, Milldam, Burnaby Road, Portsmouth, PO1 3AS, UK

    Angela Crack

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  1. Stefan Hielscher
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  2. Jan Winkin
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  3. Angela Crack
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  4. Ingo Pies
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Correspondence to Stefan Hielscher.

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Hielscher, S., Winkin, J., Crack, A. et al. Saving the Moral Capital of NGOs: Identifying One-Sided and Many-Sided Social Dilemmas in NGO Accountability. Voluntas 28, 1562–1594 (2017). https://doi.org/10.1007/s11266-016-9807-z

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