Does stakeholder engagement affect corruption risk management?

Fabio Monteduro,Ylenia Lai,Veronica Allegrini,Ilenia Cecchetti

doi:10.1007/s10997-020-09527-9

Abstract

Major international organizations such as the Organization for Economic Cooperation and Development (OECD), the United Nations (UN), and the European Union (EU) have stressed the importance of risk management as a useful mechanism to prevent corruption. Anticorruption laws or regulations have been developed around the world, both at regional and national level. These aim to support the design and implementation of proactive management of corruption risks in the public sector. This article aimed to investigate the relationship between stakeholder engagement and the extent of implementation of corruption risk management systems by public organizations. We analysed the anticorruption plans of 343 Italian administrations to explore how different categories of stakeholders (i.e. employees, governing bodies, users/citizens associations) can contribute to the corruption risk management process. We found that the involvement of external and internal stakeholders can positively affect the extent of implementation of corruption risk management systems by public organizations. We explained our results by referring to both traditional organizational theories (institutional theory and the resource-based view) and public governance theories (collaborative and inclusive governance). Institutional pressures, knowledge and values emerged as keys to understanding the results.

Highlights

The prevention of corruption is a significant challenge for the public sector
We developed two research questions: (1) does stakeholder engagement prompt the public sector to manage corruption risks?; and (2) how do stakeholder engagement factors affect the implementation of corruption risk management in public sector organizations?
In line with collaborative governance research (Chrislip and Larson 1994; Kapucu et al 2009; Kraatz and Zajac 2001; Newbert 2007; Page 2010), our result suggests that the involvement of external stakeholders in risk management processes can contribute to several stages of the risk management process

Summary

Introduction

The prevention of corruption is a significant challenge for the public sector. Its ability to ensure sustainability at micro and macro levels and to be resilient to corruption can be heavily affected by the level at which corruption risks are preventively managed (Bogodistov and Wohlgemuth 2017; Del Monte and Papagni 2001; Forson et al 2016; Green 2015; Kapstein 1998; Mauro 1995; Rose-Ackerman and Palifka 2016; Smith and Fischbacher 2009; Tunley et al 2018).Major international organizations such as the Organization for Economic Cooperation and Development (OECD), the United Nations (UN), the European Union (EU), and the Group of States against Corruption (GRECO), as well as policymakers around the world, have stressed the importance of risk management as a useful mechanism to prevent corruption. Its ability to ensure sustainability at micro and macro levels and to be resilient to corruption can be heavily affected by the level at which corruption risks are preventively managed (Bogodistov and Wohlgemuth 2017; Del Monte and Papagni 2001; Forson et al 2016; Green 2015; Kapstein 1998; Mauro 1995; Rose-Ackerman and Palifka 2016; Smith and Fischbacher 2009; Tunley et al 2018). The growing use of integrated risk management general standards or specific guidelines for corruption risk management is designed to underpin organization-wide strategies by identifying, assessing, and responding to risks on an ongoing basis It enables continuous screening for new risks (Hansen 2011) and addresses the problem that a fragmented and reactive approach to risk management would not produce the intended results. These standards or guidelines identify the ‘organization’ as the level with the primary responsibility for managing corruption risks

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Discussion

Conclusion