How Has Public Sector Reform Influenced the Potential For, and Nature of Corruption in Arm’s Length Public Institutions? A Realist Exploration

Several waves of public sector reforms shifted public service delivery away from traditional administration to arm’s length institutions such as agencies, non-profit organizations, intercommunal or joint stock companies, and network organizations. These novel institutional designs have impacted accountability arrangements in the public sector: hierarchical accountability has been replaced with contractual relations; a focus on due process has been replaced with a focus on outputs. They have equally impacted the potential for and nature of corruption. With public sector reform as the backdrop, a realist evaluation of accountability interventions such as selection of management, reporting, or auditing in arm’s length public institutions, is performed. On that basis, three empirically tested hypotheses are presented on how and under what conditions accountability interventions in arm’s length public institutions such as control by the board, the selection of top management or audit obligations could fail in preventing corruption and even heighten the risk of it.