Problems of Accountability in Nonprofit Management: A Political Economy Approach
Author: Way Sun
Abstract / Chinese PDF Download
Nonprofit organizations (NPO) should create appropriate accountabilitysystems to enhance management effectiveness and maintain public trust. Thisarticle employs public policy analysis and a political economy approach to build asystem of accountability for nonprofit organizations, according to the constituenciesand characteristics of such an organization. Within this system, this articleanalyzes three levels of management responsibility in a nonprofit organizationand problems associated with each of them: oversight, evaluation, and feedback.The origin of the three problems is a contradiction between individual preferenceand collective action. In order to resolve the contradiction, this article proposesfeasible measures based on the characteristics of nonprofit management and threetheories: principal-agent theory, social choice theory, and collective action theory.These measures resolve supervision problems by providing management withnegative or positive incentives and by encouraging teamwork through motivation.Evaluation problems are resolved by minimizing the areas of preference of thedecision-maker and by increasing the transparency of nonprofit organizations.Feedback problems are resolved by providing constituencies with selectiveincentives and by building multiple partnerships.