Commentary: Reputation and Accountability: Incentives and Reputation as a Harness

• Author: Paul Tucker
• DOI: http://doi.org/10.1111/puar.12686
• Published date: 01 January 2017
• Date: 01 January 2017

Reputation and Accountability: Incentives and Reputation as a Harness 101

Public Administration Review,

Vol. 77, Iss. 1, pp. 101–102. © 2016 by

The American Society for Public Administration.

DOI: 10.1111/puar.12686.

Reputation and Accountability:

Incentives and Reputation as a Harness

Paul Tucker , former deputy governor

of the Bank of England, now chairs the

Systemic Risk Council and is a fellow at the

John F. Kennedy School of Government at

Harvard University. His commentary draws

on his forthcoming book on the legitimacy

of unelected power, to be published by

Princeton University Press.

E-mail: paul_tucker@hks.harvard.edu

Commentary

M artin Lodge and Madalina Busuioc have

written an important article on the need

to consider how the desire for reputation

affects the accountability of public policy agencies. It

could usefully spark additional research and discussion

on the circumstances under which accountability

helps harness agencies to the public good.

It has become commonplace in the literature on

public administration to define accountability very

broadly. Regulators are said to be accountable to those

they regulate, the regulated community ’ s customers,

other interest groups, and the general public. I doubt

whether many practitioners think like that, and when

they do, I suspect they mislead themselves. Regulators

and other administrative agencies are given delegated

mandates by democratically elected legislatures. The

agencies, led by unelected officials, are accountable to

the legislature, which must decide whether to sustain,

reform, or repeal the regime. The views of other

audiences matter to legislative opinion, of course,

but that is not the same as being accountable to

them. Agencies do not stand apart from or above the

democratic state.

Hearings in front of legislative committees are, on

this view, vital to a regime ’ s legitimacy. They perform

many roles, including the “fire alarm” and “police

patrol” functions made famous by political scientists

Mathew McCubbins and Thomas Schwartz. But the

purpose and effect of hearings go further than that

narrow compass of finding error and deterring abuse.

Hearings are, in principle, the central occasion for

spurring and contributing to public debate about the

purposes of a regime and the agency ’ s stewardship of

the regime.

Whether hearings perform that wider role in

practice depends in part on the incentives of the

agency leaders and legislative committee members.

Where, as in the United States, committee members

have near-monopoly rights over tabling legislation,

their reputation turns less on their contribution to

agency oversight. Where, as in the United Kingdom,

committee members have few de jure powers, they

have greater incentives to enhance their prestige (their

reputation among their peers and with the public)

through high-profile oversight of agencies.

In both cases, the reputational incentives are greater

as the profile of an agency becomes higher and its

mission and actions become more salient to the

public. Thus, oversight hearings with central banks

tend to raise committee members’ public profiles

more than hearings with some other kinds of agencies.

My second point concerns “reputation for what?”

If a delegated regime has a vague objective or a

multiplicity of vague objectives, the public debate and

hearings that shape the reputation of an agency and

its overseers form part of a broader process through

which the direction and activities of an agency are

shaped and embedded. This is reputation building

as mission discovery, and it is an underdetermined

process because it is not anchored by a clear goal.

Things are quite different when a mission is clear

and an agency has an objective against which it can

be monitored on the basis of a clear standard (for

central banks, achieving a target for inflation over the

medium term). In those circumstances, an agency ’ s

leaders can be harnessed to the mission if their

reputation, with peers, legislators, and public, can

be made to depend on their success in delivering the

mandated goal.

A prudent—or, if you prefer, a shrewd—agency is a

legitimacy seeker. The desire of its leaders for prestige

and standing can be tethered to a clear goal by its

legislative overseers if their own reputations depend,

in turn, on the quality of their oversight. But absent

a clear objective, accountability can amount to a

process through which an agency and its legislative

overseers either compete for standing or cooperate,

through an elaborate dance, in manufacturing a joint

reputation.

Paul Tucker

Harvard University