Public service motivation and organizational citizenship

This paper investigates the relationship between public service motivation (PSM) and employee performance by adopting a notion of performance which incorporates extra-role behaviours, such as the propensity to engage in unpaid overtime, organizational citizenship behaviours, absenteeism and organizational deviance. It does so in an underexplored part of the public sector, namely prisons. As well as providing new explanatory mechanisms for understanding the outcomes of PSM behaviour and exposing the dark side of PSM, this paper contributes to debates about the significance of PSM and the consequences of its absence.     

Measuring, explaining, and controlling tax evasion: lessons from theory, experiments, and field studies

In this paper, I assess what we have learned about tax evasion since Michael Allingham and Agnar Sandmo launched the modern analysis of tax evasion in 1972. I focus on three specific questions and the answers to these questions that have emerged over the years. First, how do we measure the extent of evasion? Second, how can we explain these patterns of behavior? Third, how can we use these insights to control evasion? In the process, I illustrate my own answers to these questions by highlighting various specific examples of research. My main conclusion is that we have learned many things but that we also still have many gaps in our understanding of how to measure, explain, and control tax evasion. I also give some suggestions—and some predictions—about where promising avenues of future research may lie.     

Public Policy and Accounting Research: What Is to Be Done?

Abstract

Singleton-Green [2010. The communication gap: Why doesn't accounting research make a greater contribution to debates on accounting policy? Accounting in Europe, 7(2), 129–145] argues that a communication gap between researchers and those involved in public debates on accounting problems significantly reduces the impact of accounting research. A new ICAEW report, The Effects of Mandatory IFRS Adoption in the EU: a Review of Empirical Research, tries to bridge the communication gap on the subject that it covers. The report found not only a significant amount of relevant research, but also that its usefulness was limited in various ways. The paper makes a number of recommendations to researchers: they should point out any biases in the data they use, address some issues through field work, not assume that surrounding institutions are unchanged, be careful to understand the specific features of the countries they cover, investigate differences in previous research, and state the economic significance of their findings. The paper also makes recommendations for non-academic participants in public policy debates, including: they should actively promote relevant research, help researchers get access to information, and help ensure that researchers have the incentives to do what is needed to benefit public policy.     

Exploring different views of exchange rate regime choice

The empirical distinction between de facto and de jure exchange rate regimes raises a number of interesting questions. Which factors may induce a de facto peg? Why do countries enforce a peg but do not announce it? Why do countries “break their promises”? We show that a stable socio-political environment and an efficient political decision-making process are a necessary prerequisite for choosing a peg and sticking to it, challenging the view that sees the exchange rate as a commitment device. Policymakers seem rather concerned with regime sustainability in the face of adverse economic and socio-political fundamentals.     

Involving community members in preparedness and resiliency involves bi-directional and iterative communication and actions: a case study of vulnerable populations in New Jersey following superstorm Sandy

Abstract

Recent increases in hurricanes and other weather events have brought to light the importance of understanding what people think should be done to improve recovery and resiliency in their communities. While most studies focus only on perceptions of concerns, effects, medical issues and personal preparedness, herein subjects in New Jersey were interviewed to determine future actions they intend to follow, the actions they think agencies or others should be taking, and present a conceptual model for involvement of vulnerable community members in their own protection for future catastrophic events. The emphasis was on government and community actions. It is a bottom-up approach rather than a top-down approach to reduction of future risk. The case study involved subjects interviewed immediately following Sandy (general affected public; N?=?756) and 2–3?years after Sandy (vulnerable population, N?=?586). Concerns of subjects within 100?days related to friends family, safety and survival, food and water and medical concerns as well as recovery, repairs on their property, and community safety. Two to three years later, subjects remembered being significantly more concerned about family, friends, safety and survival, food and water and medical concerns than subjects interviewed within 100?days. Memories (or concern) also faded with respect to future preparedness; significantly more subjects interviewed 2–3?years after Sandy were going to do nothing, were less concerned about protecting family, community, and possessions than subjects interviewed within 100?days of Sandy. In contrast, the same percentage were going to evacuate and buy supplies, so it is not just a matter of forgetting the whole event. The data from open-ended questions indicated that subjects believed that recovery and preparation for a future severe storm event involved complicated and iterative activities of many different individuals, organizations, and governmental agencies. Thus we present an iterative, interactive model, and provide examples of how subjects viewed the interactions necessary to provide resiliency to their communities. We discuss the value-added of a bottoms-up approach to understanding risk reduction, preparedness and resiliency.     

How to interact,when and with whom? SMEs and public procurement

Research consistently shows that small and medium enterprises (SMEs) struggle with public procurement processes. The aim of this paper is to extend the research agenda using the lens of supplier development. Dyadic mentoring theory is used to classify three role sets that buyers are willing to use in order to develop small firms. This paper's findings distinguish budget holders from traditional buyers in terms of how and what processes they are willing to use to develop SMEs. Role theory is used in the paper to explain the different mentor behaviours.     

Break-Through Innovations and Continuous Improvement: Two Different Models of Innovative Processes in the Public Sector

How do we understand innovation in the public sector? A look at the public and private sector understanding of innovation helps us begin to see how important new ideas are born, nurtured, tested and disseminated.     

Precautionary advice about mobile phones: public understandings and intended responses

There is a widespread academic and policy debate about public responses to precaution in public health campaigns. This paper explores these issues in relation to the precautionary stance adopted in the UK around the regulation of mobile telecommunications. The aim of the paper is to examine the nature of attitudes to precaution, and the way in which these, along with other relevant variables, relate to the intention to adopt relevant behaviours. The results from an experimental study (n = 173) indicate that people distinguish between two dimensions of precaution: firstly in relation to its value or necessity per se and secondly as anchored to notions of governance. The two variables differentially relate to other variables including trust and uncertainty, and are predictive of intended behaviour change indirectly, through worry about mobile phone risks. Precautionary advice was generally interpreted as causing concern rather than providing reassurance. The results suggest that precaution may be considered a valuable stance but this does not mean that it is seen as good governance or that it will reduce concern. Whilst the discourse of precaution is aimed at reducing concern, it appears that the uptake of relevant behaviours is largely triggered by worry.     

Leader–member exchange,affective commitment,engagement, wellbeing,and intention to leave: public versus private sector Italian nurses

In the context of nurse shortages and budget constraints in hospitals, retaining skilled nurses is crucial. This paper investigates the impact of supervisor–nurse relationships on engagement, wellbeing, affective commitment and turnover intention for Italian private and public sector nurses. Private sector nurses in Italy were found to be more committed, engaged and had higher perceptions of wellbeing than public sector nurses. Based on these results, public managers need to do more to sustain the motivation of nurses in public sector hospitals.     

New development: Administrative accountability and early responses during public health crises—lessons from Covid-19 in China

ABSTRACT

The administrative accountability system in China has evolved during public health crises. By holding public officials accountable, the system hopes to improve their performance during emergencies. However, Covid-19 exposed an unexpected effect of the system. Instead of incentivizing public officials to take responsibility, it may have discouraged them from making timely, but potentially risky, decisions. Based on a holistic case analysis of the early response in Wuhan city, the authors demonstrate the lessons learnt and a way to improve the system. The case adds to an increasing academic literature on responsible risk-taking behaviours and decisions under uncertainties, extending the academic discussion by providing the critical contextual information for such behaviours and decisions in China.     

Strategies to create risk awareness and legitimacy: the Swedish climate campaign

Social means of risk regulation often only arise in response to media attention and public opinion. In contrast, in the case of climate change, the Swedish government proactively launched a public information campaign to promote public awareness and knowledge of the risks associated with climate change, with the explicit objective of promoting acceptance of public means of reducing greenhouse gas emissions. This paper analyses the framing of climate change in the Swedish climate campaign and its communication strategy. What was the message of the campaign narrative? What did it imply concerning the causes, effects, and management of and responsibility for climate change? What means were used to communicate the risks of climate change? The paper analyses the campaign narrative, its references to various affective images of climate change, and the various storytelling techniques it used. It concludes that the Swedish climate campaign relied on a unidirectional view of risk communication and proffered a narrative containing inconsistencies and ambivalence. The analysis demonstrates that despite a thoroughly worked‐out strategy, a well‐defined message, and the intention to speak clearly, a complex problem such as climate change cannot easily be transformed into a single, coherent story.     

The Corporate Propensity to Save

Why do corporations accumulate liquid assets? We show theoretically that intertemporal trade‐offs between interest income taxation and the cost of external finance determine optimal savings. Intriguingly, we find that, controlling for Tobin's q, saving and cash flow are negatively related because firms lower cash reserves to invest after receiving positive cash‐flow shocks, and vice versa. Consistent with theory, we estimate negative propensities to save out of cash flow. We also find that income uncertainty affects saving more than do external finance constraints. Therefore, contrary to previous evidence, saving propensities reflect too many forces to be used to measure external finance constraints.     

A strategy framework for performance measurement in the public sector

This paper looks at a little-studied question: what are the strategic choices behind the selection and implementation of performance measurement practices in public sector entities? The paper presents a new strategy framework which provides a structured approach to the many options available for measuring performance effectively. The framework is primarily intended for large public sector organizations, such as municipalities, but will also be useful in smaller entities.     

New approaches to the finance and delivery of health care

Radical reform of the financing of health care has emerged onto the political agenda in recent months. Any new proposals must, however, be judged in terms of their impact on the fundamental public policy objectives of efficiency, equity and choice. How do the new proposals measure up?     

The impact of CSR performance and CSR disclosure readability on investors’ earnings estimates

We investigate how the valence of corporate social responsibility (CSR) performance and the readability of CSR disclosure impact investors’ earnings estimates. Ninety-seven part-time MBA students participate in an experiment, in which we manipulate the valence of CSR performance (positive versus neutral) and the readability of CSR reports (high versus low), while holding financial information constant. Our findings reveal that investors make more positive earnings estimates when CSR performance is positive. The readability level of CSR reports also influences investors’ decision-making process. Moreover, by using an eye-tracking device, we are able to observe investors’ different reading behaviours upon the different levels of readability.     

On the decision to go public with dual class stock

Why do firms deviate from a one share-one vote regime when going public? This question raises considerations that are at the core of many corporate governance issues. We consider three arguments for this choice. Examining data on IPOs from 1980 through 2008, we do not find that firms go public with dual class stock so managers have more incentive to invest in hard to monitor projects nor to gain more when selling control of the firm. Rather, managers appear to take their firms public with dual class stock in order to retain control of their firms while reducing their lack of diversification costs.     

Initial Public Offerings: CFO Perceptions

We examine four issues pertaining to initial public offerings (IPOs) using a survey of 438 chief financial officers (CFOs). First, why do firms go public? Second, is CFO sentiment stationary across bear and bull markets? Third, what concerns CFOs about going public? Fourth, do CFO perceptions correlate with returns? Results support funding for growth and liquidity as the primary reasons for IPOs. CFO sentiment is generally stationary in pre‐ and post‐bubble years. Managers are concerned with the direct costs of going public, such as underwriting fees, as well as indirect costs. We find a negative relation between a focus on immediate growth and long‐term abnormal returns.     

Technologies of government in public sector's networks: In search of cooperation through management control innovations

In recent years, the public sector has been the subject of a thorough reassessment in a significant number of countries. During this process of modernization, issues such as inter-organizational collaboration and managerial innovation have been progressively placed at the forefront of practice and research. In particular, a number of countries have recently re-organized their public sectors around more or less formalized networks or hybrid inter-organizational forms, which are often led by a regulatory body and governed by a cooperation agreement. The literature on inter-organizational relationships in the public sector has evolved alongside the development of such cooperation agreements and innovative forms of organizing. Nevertheless, despite the fact that networks formed by public organizations, not-for-profit organizations, and private firms provide important services to their relevant communities, limited attention has been dedicated to studying the role of management control practices within inter-organizational relationships in public organizations. This is an important gap in the existing literature that this Special Issue intends to address. For this reason, and most importantly because public sector forms of inter-organizational collaborations are likely to differ significantly from those observed in the private sector, in the first part of this Editorial we draw attention to some of the themes that characterize the management and control of inter-organizational relations in the domain of public administration. Next, we introduce the six papers which comprise this Special Issue, and we briefly illustrate how each of them enhances our understanding of the role of control systems within public sector networks. Building on the empirical evidence and theoretical arguments offered by these studies, and after a brief review on the possible alternative ways of conceptualizing the process of adopting new management practices, we point to the further research that needs to be done if we are to understand the role that management control practices play in public sector networks. In particular, we suggest that there is a need to look inside management control practices, to explore what these practices are and, how and why they enable the cooperative “ideal” to become real, as well as to stimulate or hinder opportunities for public sector managerial innovation. It is concluded that there are a number of issues yet to be explored if we are to deepen our understanding of the formal and informal mechanisms of control which are the active elements of the so-called “regulatory hybrids” in the public sector.     

Auditor Reputation Under Different Negligence Regimes

Do auditor reputation effects evolve the same way under precise negligence as under vague negligence? Or are there differences? We assume that investors update their beliefs on unobservable auditor quality when an auditor discloses an inaccurate report. We call this a reputation effect. A necessary condition for reputation effects to occur is that, ex ante, investors expect ‘good’ auditors to take more care than ‘bad’ auditors such that ‘good’ auditors are less likely to issue an inaccurate report. Consistent with empirical evidence, we assume that wealthier (‘good’) auditors tend to take more care than less wealthy (‘bad’) auditors. We find that under vague negligence, reputation effects will occur, inducing both types of auditor to increase the level of care taken. A ‘good’ auditor is likely to exert excessive care. Then, even in the absence of auditor risk aversion, a (properly defined) liability cap is necessary to induce efficient incentives. A contractual liability cap is preferable to a legally fixed liability cap. Under precise negligence, a ‘good’ auditor will exert the standard of due care. However, a ‘bad’ auditor will also do so if sufficiently wealthy. Consequently, ex ante, investors do not expect different levels of care to be taken or reputation effects to occur. A liability cap is not desirable. This paper highlights the importance of non‐legal sanctions in auditor liability. Finally, it links the ‘reputation’ and ‘deep pocket’ hypotheses, both of which have attempted separately in the past to explain the positive correlation between auditor size and auditor quality.     

Corporate Governance and Information Efficiency in Security Markets

This paper investigates a neglected topic in corporate governance research; namely, do governance characteristics affect the market reaction to news? The topic is important given the emphasis by governance regulations and codes of best practice on the need for greater transparency of corporate activities. For the first time in the corporate governance literature, we show that corporate governance characteristics (particularly the presence of founding family directors and gender diverse boards) affect the market reaction to company specific news. The results of the paper point to the analysis of the impact of governance characteristics on the market reaction to news being a new and complementary research agenda within corporate governance.