Accountability in practice; issues of power and trust in Glasgow credit unions; a phronetic approach

This research examines the effects of the changes taking place within the field of credit unions (CU) in Glasgow. It examines the ways in which competing hierarchical and social accountabilities are implicated in and affected by these changes. In recent decades policy makers in the UK have looked to credit unions to help tackle issues of poverty and social inclusion. However, credit unions in the UK have tended to disappoint in terms of their growth and stability, and there have been notable failures. Some influential parties – including local councils, HM Treasury, the Financial Services Authority (FSA) and the Association of British Credit Unions Limited (ABCUL) – have argued that the way to avoid future failures, achieve a high growth rate, and ultimately meet aspirations in terms of poverty alleviation and social inclusion, is to transform credit unions to implement a more commercialised model. Such a model potentially clashes with the traditions and ethos of some sectors of the credit union community, and thus it faces resistance. The value- rational approach of this research is inspired by the work of Bent Flyvbjerg who provided a modern interpretation of the traditional Greek concept of phronesis and applied it to research with the aim of making social science really matter. Four value-laden questions permeate this research: (1) Where are we going? (2) Who gains and who loses? And by which mechanisms of power? (3) Is this desirable? (4) What should we do? The research analyses developments in the Glasgow credit union (CU) field; it also studies the accountability practices of CUs with a particular focus on a community-based Glasgow CU that has traditions and values which are not easily reconciled with the commercialisation agenda and the demands of modern financial regulatory authorities. The research uses interviews, observations and secondary data sources to answer its research questions. The analysis is classified into both macro and micro levels. On the macro level analysis, the research found that power defines a new reality where accountability has been shifted from people and values to rules and authorities. On the micro level, the analysis shows that neither trust nor accountability work effectively alone; instead, an intelligent integration of trust and accountability is needed to sustain the viability and ethos of the community-based CU