Central and Southeastern Europe at the Crossroads: Corruption - Or Democracy

Social Role of Public Organization Ethics Building in Local Governance in the Balkans

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Rodney Erakovich, Ph.D.

Assistant Professor

Texas Wesleyan University

Fort Worth, Texas USA

Email:

Sherman Wyman, PhD

Director, Center for International Research and

Professor

University of Texas at Arlington

Arlington, Texas USA

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Abstract:Beyond the role of providing public goods, local public organizations make important contributions to the governance process by influencing social inclusion and development (Brinkerhoff, 2008). Democracy building requires control of corrupt behavior and ethical decisions of public officials to insurelegitimization by society. Using survey data from public managers in local governments in Serbia and Montenegro, this study provides an analysis of the state ofethical systems in local governments. Theliterature and data analyses also examine how public organizations influence societal partnerships with local governance. Conclusions include the need for clear linkages between society and local public organizations to establish sustainable ethical and anticorruption behavior among local government managers.

1. PUBLIC ADMINISTRATION IN THE BALKANS

Despite shared history with Eastern Europe, the Balkans continues to search for their political identity. Even after the revolutions of 1989, the Balkans remained in a state of uneven transition to democracy. After a decade without Marxism, little improvement of lower and even middle class wealth has occurred.

The Balkans has experienced considerable political and economic “mentoring” from East Central Europe, the United States and Western Europe. Scholars employing western traditions and perspectives have provided much of the foundation for the study of public administration. Although there is considerable attention to democratic themes and public managerial professionalism at Balkan universities, the behavior of public officialsin Balkan countries continuesin many ways to reflect socialist and Communism doctrine (Halecki, 1980).

Of significant influence in building democracy in the Balkans are those governments that are closest to the citizens. Regardless of their location, local governments are a dominant and important component of society responsible for delivery of such critical servicesas education, police protection, fire fighting, national defense, housing and social services.

Few aspects of contemporary collective life in any society are untouched by the influence of public organizations (Perrow, 1986; Gortner, Mahler and Nicholson, 1997) But beyond providing services and goods, public organizations are also important contributors to social development (Brinkerhoff, 2008). The World Bank 1997 Development Report, The State in a Changing World, acknowledges this contribution by arguing that governance must include a renewed and increased effort to build and sustain social participation in the governance processes that includes an active citizenry.At the local level,this requires a broad base of participation in political and administrative processes.

Barriers to citizens fulfilling a role in local democratic development include two key elements. First, citizens must believe in the legitimacy of local governance. When corrupt practices and self-interested behaviors have occurred for a considerable period (Brinkerhoff, 2008), the inertia of these perceptions becomes a societal norm. The Global Corruption Report (2007) shows that 27% of citizens in the Balkans region perceive the police as being extremely corrupt; 31% of citizens expect the level of corruption to remain the same in the future.

Moreover, the technical competence of local government officials to develop and sustain informational and participatory processes for social development must be in place. Considerable professional development forlocal public administrators occurs in the Balkans, but the emphasis of this training has been a technocratic, largely indifferent to social and political values. Consultants for public management development often promote “development in a box” based on the assumption that cultural elements are understood Barnett (2005, p. 189).

Creating social partnerships to “lessen the distance between government and the citizens and communities it serves” (World Bank, 1977, p. 11) requires linking cultural, social and organizational aspects of local public bureaucracies. By understanding these links and what their imperatives are, local government institutions in the Balkans can reduce barriers, allow citizens to be “coproducers of services in partnership with the state”. (Brinkerhoff, 2008, 988) citizens can begin to expect accountability from their public officials.

This study argues corruption and unethical practices in the local public organizations is currently in the Balkansaccepted by society as a norm of government behavior. The Global Corruption Report (2007) evaluates corruption impact perceptions by citizens. They report that when Balkan citizens are asked, “to what extent do you perceive various governmental services are affected by corruption”, local governments are rated considerably higher in corruption perceptions than countries with established democracies.

1. INTRICACIES OF SOCIETAL INFLUENCE ON GOVERNANCE

Societalinfluence on governance is a product of the “norms people use to guide and control their behavior” (George and Jones, 2008, 89). They reflect amalgamation regional social, political and economic values.

Structuration theory (Giddens, 1984) proposes that both human actors and organizational systems constitute social reality. This theory proposes a duality of structurethat includes both rules and resourcesthat are both “the medium and the outcome of the conduct it recursively organizes. The structural properties of social systems do not exist outside of action but are chronically implicated in its production and reproduction” (p. 374). For Giddens (1984) and Sewell (1992), structure provides the context for action; no action takes place in the absence of social structure. Hardworking, serious, reflexive public servantscan make a difference, but to do so they need to create collective action.

In defining structure, Sewell (1992) implies formally stated prescriptions without including informal and not always conscious schemas and assumptions. Structures are constituted:

…by mutually sustaining cultural schemas and sets of resources that empower and constrain social action and tend to be reproduced by that action. Agents are empowered by structures, both by the knowledge of cultural schemas that enables them to mobilize resources and by the access to resources that enables them to enact schemas (p. 4).

Sewell sees structure as a cultural phenomenon, which can be changed by the same agency that produces it. Key to creating such change is the legitimation of the social consequences of the change. For society to commit to the values that ethical public administration is required for democracy requires collective approval. Such change is, at best, slow and uneven in ex-communist societies.

Structure can also be understood in terms of networks of interaction among citizens. Particularly in post-Communist states, the role of informal networks in building social capital deserves further investigation (Pickering, 2002).

1. PUBLIC ORGANIZATIONAL INFLUENCE

Public administration in the Balkans generally reflects the traditional bureaucratic paradigm where enforcement of ethics is by bureaucratic authority (Weber, 1947; Fox and Miller, 1996). Public administrators are directed by rules, and exercise coordination and control using technocratic principles (Gulick and Urwick, 1937; Taylor, 1947; Weber, 1947). Much of their behavior is dictated by the norms of a centralized governance structure.

This heavily top-down approach sustains the current social order and creates the values that guide social action. This taken-for-granted sense of reality is viewedby society as a norm.Berger and Luckman (1966) propose a three-part process by which reality is socially constructed.

“Man…and his social world interact with each other. The product acts back upon the producer. Externalization and objectivation are moments in a continuing dialectical process. The third moment in this process is internalization….Society is a human product. Society is an objective reality. Man is a social product” (p.61).

Focusing on the subjective origin of organizational realities, Weick (1979) builds on a social constructionist view to argue that organizations produce the situations to which they respond and the constraints they face by their conceptualizations of the environment. As humans reify elements of the environment, they make phenomena real by speaking and acting in ways that make them tangible. Such enactment theory supports the view that the perceived reality of local governance creates societal values rather than society actively influencing governmental action. Hence, legitimation of a corrupt local governance system is considered as a societal norm and accepted as a taken-for-granted sense of reality.

1. ORGANIZATIONAL CULTURE AND ETHICAL CLIMATE

This requires examination of organizational influences both structural and normative schools of thought.

4.1Organizational culture

Organizational culture is the “basic assumptions and beliefs that are shared by members of the organization” (Schein, 1985, p. 435). These assumptions and beliefs frame acceptable social perceptions and behaviors within the organization’s ethical climate (Victor and Cullen, 1988) and members of the organization react to it as a social unit(Ott 1989).

4.2Organizational Ethical Climate

An organizational ethical climateisa normative construct of shared beliefs by organizational members of policies, procedures, systems and behaviors in an organization that direct each member’s ethical behaviors and decisions (Wyld and Jones, 1997; Agarwal and Malloy,1999; Key, 1999).

4.3Typology of Ethical Climate

Victor and Cullen (1988)propose a typology of organizational ethical climates and suggested that these climates can be displayed in theoretical maps that distinguish what is really happening in organizations. They operationalize theconstructs with norms of ethical behavior such as caring, law and code, rules, instrumental and independence. Two primary factors shape these ethical climates, moral reasoning or ethical determinants and a boundary framework for ethical analysis. They conclude that organizational ethical climates evolve along dimensions similar to Kohlberg's ethical standards and theories. Kohlberg (1984) found individual moral development follows a multi-stage sequence that progresses from self-interest focus to considerations of universal principles (Victor and Cullen, 1988).

This study employs two types of ethical determinants, a principled and utilitarian view,as an organizational contextfor moral reasoning (Victor and Cullen, 1988). Together thesetypes of ethical reasoning and the level of analysis define the four ethical climate typesfound in public organizations as shown in figure 1(Erakovich, 2005).Each dimension possesses specific criteria for influencing decision-making. While organizations may show a focus toward one particular ethical climate, allare typically present and have some influence on ethical decision-making. The principled local ethical climate dimension creates ethical behavior that reflect local rules and regulations while a principled cosmopolitan dimension behavior reflects rules beyond the boundary of the organization. In either instance, a rule, regulation or code determines the behavior. A utilitarian criterion focuses on the outcome of the ethical behavior. As in the principled dimensions, the utilitarian dimension can be local or more global as represented by the utilitarian cosmopolitan dimension.

We differ from Victor and Cullen (1988) in our examination and operationalization of ethical climate dimensions as found in Figure 1 While their thesis employs caring, law and code, rules, instrumentality and independence as the dimensions for operationalizing climates, we see these factors as driving norms for ethical climate dimensions that are reified by democratic society. These norms can be empirically examined within the context of organizational culture and suggest how the ethical climate is influenced by and influences societal culture. A caring norm would be described as an influence of outcomes of decisions that promote benevolence toward others. A law and code norm supports ethical decisions based on a structural approach regardless of outcomes. Emphasis on rules influences ethical decisions by strictly following organizational procedures; instrumentality focuses on outcome of individual decisions to support organizational goals. We chose to exclude independence isa norm found in corporate culture but not typically in public service (Erakovich, 2005).

Therefore, while this is an examination of change in the culture and climate in the Balkan public bureaucracy, it also theoretically argues that change in societal culture occurs as well. We argue that the antecedents of societal change can be found in examining the local public organization’sethical focus.

1. METHODS AND RESULTS

Preliminary discussions with directors of Centers for Public Administration in Serbia and Montenegro revealed a high degree of sensitivity to any study of corruption and ethics. To reduce fears, meetings were held with directors and officials in various cities and explanations provided on the intent of our study. To increase variety of respondents in local governments, two cities in Montenegro and one city in Serbia volunteered to participate, representing populations from 30,000 to over 250,000.

5.1 Sample

Data to measure ethical climates was obtained using the Organizational Ethics Survey (OES) of Public Managers from convenience samples in Serbia and Montenegro. Thesurvey, developed by Kolthoff (2007), was tested in several cities in the Netherlands. It was deployed as a joint effort between the Vrije University in Amsterdam and Texas Wesleyan University. The organizational ethical climate measures in OES were developed from Victor and Cullen (1988) and modified for use in public organizations. The instrument was translated into Serbian with little change in meanings. It has proven to be a reliable measure of ethical climate in public organizations (Erakovich 2005).

Our analysis assumes an organizational perspective;the organization is the unit of analysis. Eligible respondents had to be in a management position for more than one year with the organization. Victor and Cullen (1988) concluded earlier that managers who met these criteria could objectively explain their organization’s culture.

Respondents were told that:(1) the objective of this survey was to determine their organization’s ethical climate, (2) the confidential survey would require about 10 to 15 minutes to complete, and (3) only aggregate results would be published. Of the 211 surveys submitted, 184 were useable, a return rate of 87%.

The majority of the Balkan public managers possess experience in public organizations and management. Overall, the mean for years of service in a public organization is 7.81 years (standard deviation 7.80) and an average age of 41 (standard deviation of 9.12). Years of public management experience in public administration is typically less than other European or Western democracies. This reflects a significant influx of new managers as these countries have move from socialism toward democracy over the past 15 years. Respondents to this survey research includeolder managers present during socialist regimes as well as more recent appointees who have known only democratic governance.

5.2 Ethical Climate Results

Four scales were constructed using the relevant items from the survey identifying the four ethical climate dimensions that were determined from previous factor analyzed research (Erakovich, 2005). Scale for the principled local ethical climate dimension includes item descriptors such as “To be successful people in this organization go by the rules.” A principled cosmopolitan dimension scale includes descriptors such as “Laws and ethics codes governing an employee’s profession are key ingredients for ethical behavior in this organization.” The utilitarian local climate scale uses descriptors such as “Here the most efficient way is not always the right way.” Descriptors such as “It is expected that employees will always try to do what is right to serve the public” are used in the scale for utilitarian cosmopolitan dimension.

In each of the scales, Cronbach reliability alphas were computed. Items were eliminated that increased the Cronbach alpha and maintained construct validity of the scale. Table 1 presents the interscale correlations, means and scale reliabilities of ethical climate dimensions. The scales have moderate independence. ANOVA results indicate significant overall differences between the ethical climate dimensions as well (F = 37.225, p < .000 [3, 653]). The measures have satisfactory reliabilities.

We assume there are relationships between ethical climates in the organization and that are findings are consistent with previous research (Erakovich, 2005; Victor and Cullen, 1988) showing combinations of ethical climates.

The greatest emphasis by the public managers surveyed was on utilitarian cosmopolitan (mean = 5.08; sd = .92) ethical climate, characterized as outcomes external to the organization. In contrast, the next level of ethical emphasis is focused on a principled level of ethical determinant both on an internal and external basis. The external utilitarian focus is moderately correlated with the ethical determinant emphasis on local and external rules and laws (principled local (.66) and principled cosmopolitan ethical climate (.62) dimensions respectively).

Since we used managers from two countries (Serbia and Montenegro), a separate between country analysis was conducted. The results are reported in Table 2. The results are similar to those reported except that the utilitarian local ethical climate dimension is not significant. This is not surprising since this dimension received the lowest mean and highest standard deviation when examined in aggregate.

Earlier studies show significant discrimination between ethical climates and between countries. This supports the existence of theoretical ethical climates and their variousdimensions as noted in previous research by Victor and Cullen, 1988 and Erakovich, 2005. It also illustrates the authenticity of organizational culture theory (Schein, 1985).

5.3 Norms Influencing the Ethical Climate

This study operationalizes ethical climates and goes beyond Victor and Cullen (1988) to utilize norms of influence including caring, law and order, rules and instrumentality. Using methodology found in previous research, indexes wereconstructed from data gathered with earlier version of OES.