Dubnick, Melvin J. And Justin P. O’Brien, “Retrieving the Meaning of Accountability in Financial Market Regulation .” Prepared for delivery at 2009 Annual Meeting of the American Political Science Association, September 3-6, 2009, Toronto.
Abstract:
Building on Raymond Williams’ approach to analyzing “keywords,” we seek to further explore the pervasive yet ambiguous concept of accountability through an examination of its use in discourses surrounding the recent global financial market crisis. We pay particular attention to the term’s use as both “cause of” and “cure for” the current crisis, and relate this to the various strategies of reform that emerge from the ongoing rhetoric and analyses. In the process we develop some frameworks for future extension of this analysis.
AI-Generated Summary:
This document analyzes the ambiguous concept of accountability in financial market regulation, especially in the context of the 2008 global financial crisis, using a keyword analysis framework inspired by Raymond Williams.
The Concept of Keywords in Discourse Analysis
- Raymond Williams viewed keywords as significant terms that shape and reflect societal debates.
- These words are both indicative of discourse meanings and part of the problems they address.
Accountability as a Discourse Keyword
- In political and policy contexts, accountability is linked to power and influence over governance.
- Its ambiguous nature allows it to serve as both cause and solution in financial crises discussions.
Dimensions of Accountability in Financial Discourse
- Accountability functions either as a control mechanism (answerability, liability) or as a normative ideal (trustworthiness, integrity).
- These are termed accountability-as-mechanism and accountability-as-setting, respectively.
Role of Accountability in the Financial Crisis
- Discourse attributes failure to lack of internal controls or external regulatory oversight.
- Systemic causes are also emphasized, shifting blame from individuals to structural flaws in capitalism.
Promises and Strategies of Accountability Reform
- Reforms promise to improve control, behavior, and legitimacy, often emphasizing rules and standards.
- However, actual policies tend to focus on creating or strengthening mechanisms rather than normative change.
Discourse and Beliefs about Accountability
- The belief in accountability’s instrumental and intrinsic value underpins reform rhetoric.
- These promises often mask superficial changes, with real normative shifts being limited.
Strategic Use of Accountability in Policy
- Policy debates focus on who is accountable and for what, often narrowing accountability to principal-agent relationships.
- This performative approach emphasizes detailed reporting and sanctions over deeper normative reforms.
Types of Accountability Strategies
- Performative, managerial, regulative, and constitutive strategies shape accountability approaches.
- Performative relies on external oversight with specific actions; managerial offers discretion within standards; regulative depends on independent monitoring; constitutive emphasizes norms and institutional design.
Performative Accountability and Its Limitations
- Common in regulatory contexts, often time-limited after scandals when political will is high.
- Effectiveness depends on legitimacy and broad consensus; overuse or changing climates reduce its impact.
Managerial Accountability and Challenges
- Focuses on broad standards allowing agents discretion, exemplified by principles-based regulation.
- Practical failures occur when regulators lack application discipline, as seen in UK’s FSA and SEC experiments.
Regulative and Constitutive Approaches
- Regulative relies on external oversight within an “accountable space” to foster trustworthiness.
- Constitutive emphasizes norms, legal frameworks, and institutional design to promote integrity without constant monitoring.
Financial Market Regulation and Crisis Response
- US and European central banks operate with broad missions enabling discretion but face biases favoring market self-correction.
- The 2008 crisis revealed flaws in reliance on self-regulation and internal models, leading to increased government intervention.
Legal and Institutional Reforms for Accountability
- Reforms like Sarbanes-Oxley aim to embed accountability through legal obligations.
- Scholars advocate for institutional design based on trust, incomplete contracts, and normative standards to improve market integrity.
Discourse and Conceptual Understanding of Accountability
- Accountability is a “keyword” central to governance debates, often used rhetorically.
- Its core meaning is shaped by political discourse, emphasizing trust, norms, and institutional arrangements over strict definitions.