Moving Beyond Agency- and Stewardship Theory: Testing a Reputation-based Approach to Understanding Government − Nonprofit Accountability Relations

Abstract

Nonprofit organizations are increasingly providers of public services (Milward & Provan, 2000; Smith & Lipsky, 1993). One of the most important challenges in public administration is to make these nonprofits accountable to government and the public (Alexander, Brudney, & Yang, 2010). However, accountability relations are theoretically poorly understood (Dubnick & Frederickson, 2010; Olsen, 2013). Busuioc and Lodge (2016, 2017), therefore, proposed a new approach which rests on the fundamental assumption that reputational motivations drive accountability behavior and outcomes. This study examines the value of this reputation-based approach for understanding accountability relations beyond agency- and stewardship theory. Twenty-four interviews were held with directors of Dutch music venues and festivals, and their municipal accountholders. The studied accountability relations are dominated by stewardship-type practices. However, deviations from this pattern are visible when reputational incentives are present. Key variables related to reputation-informed accountability behavior of actors are organizational age, dependence on a single funder and strength of expectations on core tasks. Key variables related to reputation-informed accountability behavior of forums are reputational risks relating to core competencies, past scandals and the presence of relevant audiences. This study concludes that working accountability theories are those theories that incorporate reputational motivations and incentives to account for the way in which expected reputational outcomes function as an important interaction variable that mediates the relation between institutional features of accountability relations and behavioral outcomes.