Changes in accountability mechanism in times of crisis: The case of Denmark

TY - CONF

T1 - Changes in accountability mechanism in times of crisis

T2 - EGPA 2012

AU - Hansen, Hanne Foss

AU - Kristiansen, Mads Bøge

PY - 2012/9/5

Y1 - 2012/9/5

N2 - As other countries Denmark has been hit by the global financial, economic and fiscal crisis. Denmark has experienced a housing market bubble, several banks have been closed, stock prices have been falling, unemployment has increased, private consumption has weakened and the estimated GDP growth has been adjusted downwards. As a result the pressure on the public finances has increased and public sector reforms are launched. This paper analyses how public sector accountability mechanisms are changed as part of crisis responses. The analysis shows that accountability dynamics are changing in favour of strengthening political, administrative and professional accountability mechanisms focused on the aspect of financial conduct. This is done by introducing a budgetary law increasing the surveillance of financial conduct by establishing new hierarchical and diagonal accountability relations. The role of the Ministry of Finance as an accountee is strengthened and the advisory body on the economy, the Economic Council, is given a new role as a formal accountee. Also, the possibilities for central government to punish individual actors in local government are widened. This development can be interpreted as a move towards classical economic public sector accountability thinking stressing the importance of fiscal discipline. In addition several important accountability institutions seems to further develop their accountability policies stressing another economic value namely effectiveness. Finally, accountability capacity building initiatives may introduce new accountability regimes in the years to come among other things related to developing benchmarking activities in central-local government relations.

AB - As other countries Denmark has been hit by the global financial, economic and fiscal crisis. Denmark has experienced a housing market bubble, several banks have been closed, stock prices have been falling, unemployment has increased, private consumption has weakened and the estimated GDP growth has been adjusted downwards. As a result the pressure on the public finances has increased and public sector reforms are launched. This paper analyses how public sector accountability mechanisms are changed as part of crisis responses. The analysis shows that accountability dynamics are changing in favour of strengthening political, administrative and professional accountability mechanisms focused on the aspect of financial conduct. This is done by introducing a budgetary law increasing the surveillance of financial conduct by establishing new hierarchical and diagonal accountability relations. The role of the Ministry of Finance as an accountee is strengthened and the advisory body on the economy, the Economic Council, is given a new role as a formal accountee. Also, the possibilities for central government to punish individual actors in local government are widened. This development can be interpreted as a move towards classical economic public sector accountability thinking stressing the importance of fiscal discipline. In addition several important accountability institutions seems to further develop their accountability policies stressing another economic value namely effectiveness. Finally, accountability capacity building initiatives may introduce new accountability regimes in the years to come among other things related to developing benchmarking activities in central-local government relations.

M3 - Paper

Y2 - 6 September 2012 through 7 September 2012

ER -