Organisational Legitimacy and the 2012 Accountability Crisis of the European Union Agencies

It is common in emerging studies of accountability and reputation to link a strong reputation to fewer accountability risks, and to robust agency authority. But what if a strong reputation might store up deeper problems that lead to an accountability crisis? In 2012 a report by the European Ombudsman admonished a number of EU agencies for facing a growing number of conflicts of interest in their regulatory, information and coordination work. The European Parliament and Commission subsequently punished several agencies by either demanding new conflict of interest policies be developed, or at worst withholding funding from them. This happened despite the agencies having a strong reputation among most key stakeholder groups. How had this accountability crisis come about? Utilising a framework derived from sociological studies of 'everyday organisational legitimacy', this paper traces how two agencies with very different remits both fell into an accountability crisis as a result of becoming closely aligned with key stakeholder groups for reputational reasons. It compares the Medicines and Environment agencies over a ten year period from 2004-14, showing that despite being different in task and autonomy, both agencies became deeply reliant on stakeholders for their basic organisational practices, to provide them with the authority derived from a strong reputation. This was helpful for developing their autonomy, but was based on a very close relationship that would later directly cause an accountability crisis. Methodologically, the paper draws on agency reports, over 30 semi-structured interviews, European Parliament questions, news reports and legal challenges. It concludes that future research on reputation and accountability should not assume a strong reputation is necessarily a good thing for accountability. Introducing organisational legitimacy as a key concept in the study of public accountability can help scholars locate the roots of systemic weaknesses that become the basis for accountability crises.