I've been meaning to flag Michael Rushton's characteristically thoughtful response to my post last week on the moral hazard argument against deaccessioning. He helpfully marshals a lot of the academic commentary on agency problems generally, though concedes "the literature on nonprofits is not as deep." His bottom line:
"In the end ... I appreciate DZ's point that we just are not yet in a position to say with accuracy whether the costs of the moral hazard I worry about exceed the benefits from flexible access to funds through deaccessioning in times of crisis. But I will maintain the cost is there, even if, under new, relaxed norms governing deaccessions, the costs would not immediately be apparent."
One quick thought in response. We already have real-world experience we can draw on to assess the effects of a permissive deaccessioning regime on museum management. U.S. museums routinely deaccession to raise money to buy more art. Is there any evidence that that leads to poor management (in the area of acquisitions or otherwise)? Does it seem to encourage "pet projects and perquisites and risky schemes that are contrary to the interests of the organization"? My understanding is that most (or at least many) European museums do not deaccession at all (not even to buy more art). Do they seem better managed than their U.S. counterparts? It would make for a fascinating research project. In any case, it's interesting that you never hear about the moral hazards of acquisition-related deaccessioning.
UPDATE: Rushton responds.
