When Reporting Undermines Performance: The Costs of Politically Constrained Organizational Autonomy in Foreign Aid Implementation

Abstract

Bureaucracies with field operations that cannot be easily supervised and monitored by managers are caught between two sources of dysfunction that may harm performance. The first source of dysfunction is straightforward: field workers may use operating slack and asymmetric information to their own advantage, thwarting an organization’s objectives. The second source of dysfunction is often overlooked: attempts to limit workers’ autonomy may have deleterious effects, curbing agents’ ability to respond efficaciously to the environment. I find that the parliaments and executive boards to whom International Development Organizations (IDOs) are accountable differentially constrain IDO organizational autonomy, which in turn affects management’s control of field agents. Tight management control of field agents has negative effects, particularly in more unpredictable environments. Attempts by politicians to constrain organizations in an effort to improve performance may sometimes be self-undermining, having net effects opposite those intended.