Is Civil Society Self-Regulation Effective? The case of Roman Third-Sector and the 'Mafia Capitale' Scandal.

AuthorCarolei, Domenico

Introduction and Research Aims

There have been calls for a greater accountability of civil society organisations (CSOs), due to their rapid growth in terms of size, visibility and political influence, coupled with a series of high-profile scandals (Edwards, 2000). One of the ways to deal with accountability is self-regulation: voluntary norms (e.g. codes of conduct, accreditation schemes, peer-assessment etc.) defined by CSOs for CSOs at sectoral level to regulate their behavior (Gunningham & Rees, 1997). Over the past decades, there has been a proliferation of self-regulatory instruments worldwide (Warren & Lloyd, 2009). Self-Regulation is currently evolving and emerging in several contexts both at a national and international level. At the international level, the Core Humanitarian Standard on Quality and Accountability (2014) has merged the Humanitarian Accountability Partnership International with People in Aid, integrating also The Sphere Project (The Sphere Project, 2014). In December 2017, the Global Standard for CSO Accountability was launched which has the ambition of serving as a point of orientation to improve accountability of CSOs working in the global south and north (Accountable Now, 2017). In November 2018, British charities developed the first ever Charity Digital Code of Practice (Charity Digital Code of Practice, 2018) whereas, in January 2019, the National Council for Voluntary Organisations (England and Wales) released the Ethical Principles for the Charity Sector (NCVO, 2019; Carolei, 2019).

The importance of self-regulation emerges from numerous factors, the most important being its purpose of institutionalising best accountability practices and rendering them systematic among CSOs. In that respect, self-regulation is more than a simple tool of accountability, it is a process linked to civil society identity and normative views on organisational behavior (Ebrahim, 2003). But, self-regulation is also used to avoid restrictive state policies, especially when CSOs operate in hostile political environments (Bies, 2010).

Similarly, self-regulation can occur when the State structure is collapsed and CSOs are operating in a 'vacuum of regulation' (Harris-Curtis, 2009). So, self-regulation, as a normative institution of (and for) civil society, reflects the nature of CSOs as civil agency in terms of self-determination, hence democracy, in setting regulatory norms for themselves at grassroots level, and in terms of normative developments as civil society autonomy in devising forms of progressive change within the law. Consequently, that the subject of self-regulation is central to discourses of democracy and development as well as to academic discourse about the nature and role of civil society.

Despite the increasing popularity, a sizable portion of self-regulatory instruments have been criticised due to systematic monitoring and sanctioning disfunctions (Hammad & Morton, 2011). The spectre of non-compliance cast doubts not only on self-regulation as a means of accountability, but it does also increase scepticism on self-regulation effectiveness.

Researchers have developed two approaches under which the matter of effectiveness can be assessed: the economic approach (also known as 'club theory') and the institutional approach (also known as 'constructivist approach'). On the one hand, the economic approach suggests that self-regulation arises as a response to mitigate perception of opportunism within the sector and CSOs create and/or join 'voluntary clubs' to send a reputational signal of quality to the principal(s): donors, lawmaker, and other targeting stakeholders (Gugerty & Prakash, 2012). In terms of institutional architecture, two conditions typify credible self-regulatory initiatives: clear standards of behavior and stringent enforcement mechanisms (Prakash & Gugerty, 2010). Under this approach, a self-regulation is effective if a high number of CSOs comply with voluntary standards (which are, in turns, adequately enforced) and, simultaneously, a successful signalling is sent to the initiative's principal/targeting stakeholder, resulting either into an increase of public trust/funding for CSOs or into a decline of intrusive State regulation (Gugerty & Prakash, 2012).

On the other hand, the institutional approach sees CSOs as normative institutions that collaborate to define self-regulatory standards with the aim of setting principles and practices that define the "right conduct" and such a process spells out the sector's public commitment to moral restraint and aspiration (Gunningham & Rees, 1997; Feeney, 1997). According to the institutional theory, a self-regulatory instrument is effective when it creates an institutional setting that promotes social learning and norm-compliant behaviour, encouraging CSOs to internalise behavioural norms (Crack, 2018).

So far, these approaches have been applied by scholars to analyse whether self-regulation is effective in relation to various empirical and theoretical tasks. First, there is a body of the literature that has employed the economic and the institutional approach to explore drivers and motivations behind the emergence of different self-regulation models in Europe (Bies, 2010), Asia (Sidel, 2010), Africa (Gugerty, 2008) and across the three continents (Gugerty et al, 2010). Comparative scholars have lately studied the interplay between State-based regulation and self-regulation (or co-regulation) looking at different jurisdictions (Breen et al, 2017). Drawing upon the economic approach, scholars have laid down an analytical framework to identify the ideal institutional architecture--in terms of monitoring and sanctioning--that typifies credible voluntary clubs (Prakash & Gugerty, 2010). Using the economic and the institutional approach as a theoretical outline, a recent study has investigated the perception of effectiveness of the INGO Accountability Charter exploring the motivations of NGOs in joining the Charter and to what extent participant NGOs perceive it as effective in enacting accountability (Crack, 2018). Similarly, a scholar has gathered perceptions of self-regulation effectiveness looking at USA-based instruments asking why CSOs adhere to voluntary regulation and whether the subsequent regulatory experience matches their initial expectations (Kennedy, 2018). The institutional approach was deemed more appropriate than the economic one in explaining how International Non-Governmental Organisations (NGOs) defined and institutionalised voluntary standards of accountability within the context of the Humanitarian Accountability Partnership (Deloffre, 2016). The same approach was also employed to prove that self-regulation arises as a response to environmental and institutional pressures (Bromely & Orachard, 2016).

As to norm-compliance, researchers have put much of their intellectual efforts in understanding what factors account for the variation in the strength of monitoring and sanctioning mechanisms (Boire, Prakash & Gugerty, 2016), while, other scholars have measured to extent to which NGOs comply with regulatory standards focusing on the Global Reporting Initiative: findings point out low level of norm-compliance (Traxle, Greiling & Hebesberger, 2018). On a theoretical level, it was argued that non-compliance might result from willful/strategic shirking and from mere confusion or ignorance (Prakash & Gugerty, 2010). However, there is scant empirical research that investigates the reasons behind non-compliance. Recognising this gap, Crack has investigated the challenges faced by CSOs in complying with self-regulatory standards gathering data in the field. In that respect, Crack argues that 'there has been an overwhelming proliferation of initiatives, that observance of the standards can be excessively bureaucratic, the initiatives may not adequately accommodate the organizational diversity in the sector, and the extent to which the standards are sufficient to embed a culture of accountability to affected populations is doubtful' (2016: 41-42). However, Crack's investigation is limited to a few self-regulatory instruments of which only international NGOs can be part.

In light of this, the list of the challenges faced by CSOs in complying with self-regulation cannot be considered exhaustive, neither can it be said that the effectiveness of self-regulation has been adequately investigated especially in terms of verifying whether self-regulatory instruments meet their expected outcomes/objectives. Despite their tremendous contribution to the literature, none of above-mentioned studies has tried to examine the matter of effectiveness against self-regulation's own objectives/expected outcomes. Indeed, prominent scholars have warned that 'future efforts should begin to assess the effectiveness of self-regulatory systems in achieving their desired outcomes and improving nonprofit performance' (Gugerty et al, 2010:10).

To sum up, there is still a question within the literature that remains largely unanswered: is self-regulation effective in achieving its own objectives? When assessing the effectiveness of self-regulation, one must ask not only whether--and to what extent--CSOs comply with voluntary standards but also why they fail to do so. This article aims to provide an answer to these questions.

2: Rationale for the Case-Study and Methodological Framework

To answer to the research questions formulated above, this research has looked into the practices of Italian CSOs. Italy has been chosen as a case study for three reasons. First, the "Mafia Capitale" scandal (December 2014) has undermined the credibility of CSOs revealing a network of corrupted relationships between CSOs, criminal gangs and political parties.

Secondly, the Italian government has recently reformed the third sector through the 'Riforma del Terzo settore, dell'impresa sociale e per la disciplina del Servizio civile universale' (Third Sector Reform...

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