Exploring the impact of culture in strengthening the stewardship of compact funds in the Federated States of Micronesia: a convergent parallel mixed methods design

Abstract

As the U.S. attempts to create conditions for a self-sufficient Federated States of Micronesia (FSM), significant uncertainty remains. Based on the agreement between the U.S. and the FSM under the Compact of Free Association Act (COFA) of 1985, Federal funds are transferred to FSM to sustain its economy in return for the free use of FSM's land, water and air for U.S. military purposes. As originally envisioned, this transfer would be complete by 2023, but with only a few years remaining, this goal seems unattainable. Neither the U.S. government nor the FSM seem willing to make concessions. With the U.S. demanding better oversight and accountable accounting practices, and the U.S. Financial Stability Board (FSB) asserting culturally informed management prerogative, both entities' interests are imperiled, especially as China seems to be waiting in anticipation to pick up the pieces should an impasse be reached. This mixed-methods research (surveys and interviews) was conducted utilizing the employees of two FSM national government departments: The National Department of Education and National Department of Public Health and Human Services. These two FSM departments receive the largest share of federal assistance. This research paper attempts to generate insights on the impact of culture in strengthening the accountability of Compact funds in the FSM. The study explores the social stratification and hierarchy in Micronesian societies in terms of stewardship competencies to fulfill the federal administrative requirements in the management of federal funds. What works for the mainland U.S. may not work worldwide. The effect and import of cultural influences cannot be understated, particularly in relationships amongst cultures that vary widely, as do those of the U.S. and FSM. It's important to understand the nuances of how the notion of stewardship is perceived and exercised in other countries, especially when the interests of two nations converge, while their cultures do not. This study represents the present environment in FSM governance. Understanding culture and its influences is an essential step in considering the real effect on a leadership style, transcending to ethics and stewardship. A leadership style can have a different effect or impact in other societies relative to the cultural environment in which it is adopted. This research finds support for the notion that leadership styles cannot be embraced and applied in similar manner throughout the various cultures or nations. There are a wide variety of different leadership styles across the globe; each individual region possesses its own cultural idiosyncrasies, and naturally these are reflected in the way in which people lead. This dissertation concludes with eight specific recommendations for implementing structural and policy reforms which will strengthen the relationship between the U.S. and FSM and better prepare FSM to be self-sufficient.