Legal independence vs. leaders' reputation: Exploring drivers of ethics commissions' conduct in new democracies
| Published date | 01 September 2018 |
| Author | Slobodan Tomic |
| Date | 01 September 2018 |
| DOI | http://doi.org/10.1111/padm.12411 |
ORIGINAL ARTICLE
Legal independence vs. leaders' reputation:
Exploring drivers of ethics commissions' conduct
in new democracies
Slobodan Tomic
Sutherland School of Law, University College
Dublin, Dublin, Ireland
Correspondence
Slobodan Tomic, Sutherland School of Law,
University College Dublin, Room 118, Belfield
Campus, Dublin 4, Ireland.
Email: slobodan.tomic@ucd.ie or
slobodan.tomic@gmail.com
The article addresses the emerging debate in delegation scholarship
over the role of legal independence vs. reputational activism of
agency leaders, in shaping de facto independence. The study
explores a transitional context, analysing the enforcement styles of
Serbian and Macedonian ethics commissions. Through a qualitative
analysis of the commissions' enforcement styles, and a quantitative
analysis of their rhetorical patterns, the article finds that the com-
missions' de facto independence was not a function of their legal
independence but rather of the reputational craft of their leaders.
In new democracies, the role of structural agency insulation is mini-
mized both in containing as well as in fostering de facto indepen-
dence: informal networks, on the one hand, provide non-
institutional routes for principals to undermine agencies' de facto
independence; external conditionality and increased policy
salience, on the other hand, provide reputational opportunities for
agency leaders to overcome low legal independence.
1|INTRODUCTION
This article explores the rising debate over structural versus reputational sources of agency independence. In the last
few decades, semi-autonomous agencies have proliferated worldwide, taking over regulatory tasks across various
domains. Their arm's-length distance from government has been supposed to enable expertise-driven (Vibert 2007),
credible and time-consistent policy (Majone 1996), in contrast to politically opportunistic choices made by govern-
ment departments. Yet, two diverging perspectives have developed in the literature over how the insulation from
government, known as ‘legal independence’
1
shapes agency conduct in practice.
The structuralist perspective, inspired by the formal theory of bureaucratic control and the principal–agent con-
tract paradigm (Moe 1984; McCubbins et al. 1987; Horn 1995), implies that legal independence is a crucial determi-
nant of agency enforcement. Under lower degrees of legal independence, the logic goes, it is risky for agencies to
1
In the literature also called de jure independence, formal independence, or statutory independence.
DOI: 10.1111/padm.12411
544 © 2018 John Wiley & Sons Ltd wileyonlinelibrary.com/journal/padm Public Administration. 2018;96:544–560.
contravene the principal's interest because they can be sanctioned, for instance through staff removal or budget cuts.
Thus, the principal is seen as the key account-holder, and agencies' de facto independence is expected to correspond
to their legal independence.
Yet, as transactional theory posits, agencies might extend their autonomy beyond the statutory confines through
interactions with stakeholders (Carpenter and Krause 2014). By enhancing their own reputation among the watching
audiences, agencies can increase the cost of a prospective principal's reprisal and thus potentially pre-empt it. Here,
the watching audiences, rather than the principal, are highlighted as the key forum for agents' account-giving
(Busuioc and Lodge 2016). This implies that agencies' legal independence, which is determined by the principal's
instruments of control, will not necessarily shape their de facto independence.
Extant research on the impact of legal independence on agency conduct has focused mainly on consolidated,
Western democracies (e.g., Hayo and Voigt 2007; Maggetti 2007; Hanretty and Koop 2013; Guidi 2015; Koop and
Hanretty 2018), but new democracieshave received less attention (Teodoro and Pitcher 2017, p. 402). New democra-
cies are interesting cases to analysebecause open governmental action against an arm's-length agency,particularly an
anticorruption watchdog, might be constrained by external conditionality. At the same time, in new (transition)
democracies politicians can rely on strong informal networks (Volintiru 2015) as less visible, non-institutional, routes
to undermine agencies' de facto independence. How, then, do these two countervailingforces typical of new democ-
racies play out, in light of the structuralistand reputational theories of agency independence?
The article presents an analysis of the enforcement style of three ethics commissions from two Southeast
European countries—Serbia and Macedonia.
2
It contrasts the two theories, asking which factor better explains the
commissions' de facto independence: their legal independence or their leaders' (lack of ) reputational craft? To
answer this question, a combination of qualitative and quantitative analysis is undertaken, based on cross-time com-
parisons within the commissions as well as cross-commission comparisons.
The contributions are as follows. First, the article develops an original concept of enforcement style for ethics
commissions. Since it captures the nature of individual investigations, the concept produces a more reliable proxy of
de facto independence than expert perceptions, assessments of policy impact, or counts of principals' ‘reprisal
actions’(e.g., removal of an agency chief). This concept might further be applied across other integrity regulators and
anticorruption bodies. Second, to address the structuralist vs. reputational debate, the study utilizes original data
from a transitional context. Third, the article finds deviations between legal and de facto independence, adding evi-
dence to the ‘sceptical’stream in delegation scholarship about the role of agency insulation in fostering de facto inde-
pendence. Fourth, the analysis documents the mechanisms behind such deviations: (a) how some agency leaders
exploit reputational forces to advance high de facto independence and (b) how high legal independence might just be
an asset consciously underutilized by agency leaders.
2|LEGAL INDEPENDENCE, REPUTATION AND AGENCY ENFORCEMENT
Legal independence has been a central concept in the delegation literature. It can be defined as agencies' formal
autonomy to conduct personnel, financial and administrative affairs free from governmental involvement (Verhoest
et al. 2004; Busuioc et al. 2011). Legal independence is determined by a statute which sets out the role of govern-
ment in the appointment and removal of agency staff, in budgeting, and in internal agency administration
(Gilardi 2002).
De facto independence, on the other hand, refers to the day-to-day operations of agencies, unaffected by gov-
ernmental preferences (Hanretty and Koop 2013, p. 196). Maggetti defines de facto independence as ‘the self-
determination of agencies’preferences, and their autonomy throughout the use of regulatory competencies' (2007,
2
The official name is the Former Yugoslav Republic of Macedonia (FYRM), but for purposes of brevity the term Macedonia is
used here.
TOMIC 545
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