Challenges Facing Public Accountability - Coursework Example

Name of Student Name of Institution Course Title Name of Instructor Challenges facing Public Accountability Introduction The late twentieth century saw a broad shift in accounting practice that has greatly impacted public accounting today. This broad transformation was a shift financial accountability to public accountability. The Anglo-Saxon world witnessed this shift when the Thatcher-government in the United Kingdom introduced the New Public Management policy. In the United States, the shift from financial accounting to public accountability was also witnessed through the Reinventing Government reforms of the Clinton-Gore administration (Bovens, 2006). These public finance management reforms in the Thatcher and Clinton administrations had introduced a range of private sector management styles and techniques into the public sector. Some of the practices introduced included: the use of contract management in the public sector; the use of benchmarks and performance indicators for purposes of comparing and evaluating the efficiency of public agencies among many others. Such instruments in the practice of accounting require extensive auditing to be effective and efficient (Bovens, 2006). What is the importance of public accountability? Today, accountability has become a golden concept to the extent that no one is against it. Through the way it relays the image of trustworthiness and transparency, accountability has increasingly been used in political discourse and policy documentation in most countries (Boven, 2002). Public accountability is concerned with the obligations of entities or persons who are entrusted with public resources to specifically be answerable to the fiscal and managerial responsibilities that have been prescribed to them (Khan & Chowhury, 2006). Entrusted individuals or entities have to then report to those who have conferred them the fiscal and managerial responsibilities of the public resources. Clearly from this definition, it is quite clear that those entities that use public resources have an absolute obligation to account on how these resources are allocated, used and the gains achieved from the spending. Khan & Chowhury, (2006) adds that the objective of any public accountability initiative is to ensure that public money is spent in an efficient, economic and accountable manner. Such initiatives are also put in place to ensure that there is minimal wastage of public resources so that the public can benefit from these finances. Is public accountability in crisis? In my opinion, I do not think that public accountability as a concept in modern governance is not in a crisis as many have tried to argue. Ideally, governments are entrusted with public funds for its use and management. They then have the duty to account for these public funds and to use them in accordance with the wishes of the people without any wastage, extravagance or excesses. Most governments have put in place a range of expenditure tracking and reporting systems to respond to the accountability requirement that comes with public sector spending (Khan & Chowhury, 2006). Today, the evaluation of the effectiveness of public officials and public entities has ensured that these two players in governance perform to their full potential. Desai (2009) argues that the quality of governance has a correlation with social performance. There is overwhelming evidence for me to point out that accountability has indeed become a cornerstone of good governance in many societies (Bovens, 2006). Public accountability has been seen and used as a powerful lever to improve governance by most regimes (Desai, 2009). It is therefore imperative for me to note that public accountability is a concept that is being adopted by many world economies which are focussed on streamlining governance system to deliver the wishes of their people. However, public accountability faces various challenges that have led some people to believe that the concept is being eroded. Dowdle, (2007) points out that since public accountability is not an old practice in public finance management, it’s important to understand that this concept, just like any other concept, is evolving and governments should be more concerned about best practices and not the contrary. Globalisation and privatisation are two modern concepts that have led many to believe that public accountability is today in a crisis. Many have argued that development of new configurations in today’s liberal regulatory era is deepening democratic deficits, thereby limiting transparency initiatives and obstructing the traditional checks and balances associated with public accountability (Dowdle, 2007). However, in my opinion, the truth is that the perceived crisis of erosion in public accountability is something that is far from new. Such observations that have termed public accountability as a declining concept should enhance the imperative for us to understand how notions of public accountability always continue to shift from time to time. This does not mean that it’s improper to perceive a crisis in accountability in most governments today, but it should be seen as an opportunity for us to invent more accountability pathways. The gist of my argument here is that public accountability in the midst of globalisation and privatisation should be seen as a presentation of new opportunities to experiment on notions of accountability with the aim of redefining the term ‘public’ (Dowdle, 2007). Public auditing on the other hand is in a mess which has made most citizens not to participate in elections even when they are aware that accountability places the onus on them. Bearing all this in mind, the question is how do modern market-oriented reforms such as privatisation and globalisation pose a challenge to public accountability? Privatisation and public accountability Privatisation of public services by governments has been documented to shift control of rights and obligations of governments on the citizenry. Ellman (2005) argues that privatisation can enable politicians to escape the responsibility of the quality of public service that has been conferred to them by the people. I also concur to certain extents the argument by critics of privatisation who argue that governments usually have the habit of privatising certain services with a strategic aim of deflecting responsibility for a non-popular change like a layoff (Ellman, 2005). It is such practices that have made public accountability to be seen as eroded, or a concept in crisis. According to Walker (2012) privatisation of auditors is one case in the United Kingdom that has made many people to believe that public accountability has been eroded in modern governance. Auditors are key players in the cycle of public accountability by governments. In the United Kingdom, there is a crisis in identity of an auditor and his/her actual role. In my opinion, the auditing fraternity in the private sector in the United Kingdom is yet to understand there is a collective failure in the accountancy professions since most auditors have been deafened by excess pay (Walker, 2012). Clive Grace, the former head of the Audit Commission in Wales has been quoted saying that there is a profound emptiness on where the citizenry ought to find meaningful conversation about the role of public audit (Walker, 2012). This is after the UK government announced that it would abolish the Audit Commission and move its functions to the private sector. I cannot overemphasise that public accountability as traditionally understood, is a concept where governments introduce initiatives in their own structures to check on accountability of public resources and finances. When a government takes an imitative to outsource accountability services for instance, one can easily conclude that public accountability as a concept is in crisis. However, it’s important to note that whereas it’s the responsibility of a government to hold itself accountable to its people over their finances, the cost of ensuring that this responsibility is achieved should be considered. The British government in disbanding the Audit Commission and moving its expertise to the private sector was aimed at saving the taxpayers over £50m per year (Kaffash, 2010). The issue of privatisation and public accountability is also a never ending debate in Chicago. Chicago is considered as the ‘ground zero’ in the American debate concerning the privatisation of public infrastructure. Dutzik et al. (2009) explains that there is no city in the United States that has aggressively moved towards privatisation of its infrastructure as Chicago. It’s quite clear to me that a common lure to privatisation of public assets by governments is that it provides quick boosts to budgets through large and upfront payments. For instance, when Chicago leased the city’s parking meters system in 2009, it received $1.16 billion which was estimated to be 20% of total revenue that the city was supposed to collect in that year (Dutzik et al. 2009). Chicago has also used privatisation to shift risks associated with the public sector to the private sector. One of the risks that is associated with the shift to the private sector after privatisation of a public asset is the political risk that is mostly related to an unpopular decision. Another risk that is transferred is the risk of future capital investments on public assets. A recent privatisation deal in Chicago required the new owners to rebuild the East Monroe Street Garage and replace all non-existing coin-fed parking meters with meters that display the parking pay (Dutzik et al. 2009). Such is a transfer of an obligation to undertake unforeseen repairs on a system by the government to the private sector. Another reason for privatisation that can also be associated with the situation in Chicago is the fear by government of losing income. Most governments live with the fear that assets that are making money today will not be the money-makers of tomorrow and that is why they privatise them out (Dutzik et al, 2012) What are the pitfalls of privatisation? However, privatisation has many pitfalls that have made many people to believe that public accountability has been eroded in modern governance systems. Privatisation often leads to a loss of public control over key infrastructure (Dutzik, 2009). When a government decides to offer a service, its main aim is to serve the larger interests of the public. However, for private entities, their primary objective is to make a profit. Once a public asset has been privatised, the public loses its control over the asset or resource whether its key to them or not (Dutzik, 2009). Dutizik (2009) further points out that another major pitfall of privatisation is that rarely do taxpayers receive a full value of an asset after a privatisation deal has been struck. Public accountability demands that the public should always get a value for their finances and resources (Bovens, 2006). The concept is essentially meant to reduce wastage of public resources. However, with the rampant privatisation of public assets by most governments today, it will always be difficult even for me to try to explain the contrary to those who believe that public accountability has been eroded. Globalisation and public accountability Today, the liberalization of world capital markets, lifting of international trade barriers, technological advances in transport and communication that has accelerated the movement of people, capital and information are some of the impacts that globalisation has had on states. Globalisation has also had an effect in broadening the range of issues that spill into nations that demand international regulation and norm-setting (Bertucci & Alberti, 2005). It is therefore possible to argue that most of the problems being experienced in the world today such as environmental pollution, poverty, economic crises and recessions, terrorism and organised crime have become transnational in nature (Bertucci & Alberti, 2005). This transnational element in such global issues has posed a great challenge to public accountability. However, globalisation in my opinion should not be used as an excuse by government for not improving capacities that ensure greater openness and transparency. Bertucci & Alberti (2005) suggests that he perception that globalisation undermines the size of a state in terms of its fundamental role in being responsible and accountable both in a national perspective and in international parameters. The state has to always remain central to the well being of its people and to the proper management of economic and social development. Those who argue that globalisation reduces the role of the state in accounting for its fiscal management should understand that society constantly evolves and globalisation provides an opportunity for states to redefine accountability at local, national and international levels (Bertucci & Alberti, 2005). Globalisation increases prosperity and human development to everyone. However, these prospects are dependent on how states pursue globalisation. It also depends on the democratic processes that are put in place at local, national and international levels to check and account on globalisation. States should ensure that there are adequate policies and laws to mitigate on the negative effects of globalisation such as unemployment that is caused by the restructuring of the economy (Bertucci & Alberti, 2005). sConclusion In conclusion, it’s important for me to point out that challenges to public accountability have manifested themselves especially in developing nations that are entrenching democracy as their new systems of government. The expanding scope and complexity in the functions of governments, the difficulty faced in gathering information, and the growing power of bureaucratic experts are some of the unique challenges that most of these emerging states are facing in as far as the full realization of public accountability is concerned (Haque, 2007). This is besides other challenges such as weak political institutions, military intervention in governance issues, weak and vulnerable civil society and absence of strong political opposition. All in all, these challenges according to me do not mean that public accountability as a modern concept in governance is in crisis. Those who argue that public accountability is being eroded by market-oriented reforms like privatisation and trends such as globalisation should note that every concept has its own challenges. It is the onus of policy makers and government to come up with new ways of ensuring that the tenets of public accountability are still maintained even when this concept is facing these modern challenges. After all, governments will always be accountable to their citizens (Bovens, 2006). Reference List Bertucci G., & Alberti A., 2005. Globalisation and the role of the State: Challenges and Perspectives. Pp 9-15. Available at http://unpan1.un.org/intradoc/groups/public/documents/un/unpan006225.pdf Bovens M., January 16th, 2006. Analyzing and Assessing Public Accountability. A Conceptual Framework. European Government Papers. No. C-06-01. Available at http://www.uu.nl/faculty/leg/nl/organisatie/departementen/departementbestuursenorganisatiewetenschap/onderzoek/publicgovernance/Documents/eu%20governance%20papers%20C0601_Bovens.pdf Boven M., 2002. Public Accountability - A framework for the analysis A framework for the analysis and assessment of accountability arrangements in the public domain. Available at http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&ved=0CFwQFjAG&url=http%3A%2F%2Fwww.qub.ac.uk%2Fpolproj%2Freneg%2Fcontested_meanings%2FBovens_Public%2520Accountability.connex2.doc&ei=z_9uUYpuxYuFB5XRgYgI&usg=AFQjCNHCKAihAkxxI_sI2_eT_cGAWmQTgg&sig2=u6SeJ81bhi6GMP0jZCNovQ&bvm=bv.45368065,d.ZG4 Desai J. P., November, 2009. The Power of Accountability. Universal Consulting. Pp 13-21. Available at http://online.wsj.com/public/resources/documents/mum_accountability.pdf Dowdle M., February, 2007. Public Accountability: Designs, dilemmas, and experiences. Cambridge Studies in Law and Society. Available at http://www.bsos.umd.edu/gvpt/lpbr/subpages/reviews/dowdle0207.htm Dutzik T. et al., Fall, 2009. Privatisation and the Public Interest - The Need for Transparency and Accountability in Chicago’s Public Asset Lease Deals. Illinois PIRG Education Fund. Pp 6-19. Available at http://www.illinoispirg.org/sites/pirg/files/reports/Privatization-and-the-Public-Interest.pdf Ellman M., December, 2005. Does privatisation of public services reduce government accountability for quality problems? Pp 8-14. Available at http://www.institut.veolia.org/ive/ressources/documents/1/2EBADdEIIX1c7O0kk7510GdE.pdf Haque M. S., 2007. Limits of Public Accountability under the Reinvented State in Developing Nations. National University of Singapore Press. Available at http://profile.nus.edu.sg/fass/polhaque/paq2.pdf Kaffash J., August 13th, 2010. Audit Commission to be abolished. Public Finance. Available at http://www.publicfinance.co.uk/news/2010/08/audit-commission-to-be-abolished/ Khan A., & Chowhury N., 2006. Public Accountability, Corruption Control and Service Delivery: Governance challenges and the future options. UNPA. Available at http://workspace.unpan.org/sites/internet/Documents/UNPAN043947.pdf Walker D., Tuesday, 8th May 2012. A crisis at the heart of accountability. The Guardian. Available at http://www.guardian.co.uk/public-leaders-network/2012/may/08/crisis-accountability-auditors Read More