Privatisation and accountability in a “crony capitalist” Nigerian state

Bakre, Owolabi M.; Lauwo, Sarah

doi:10.1016/j.cpa.2016.01.003

Cited by 38 publications

(60 citation statements)

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“…They accepted the success claims made by the Ghanaian government and the supranational organisations; however, they stressed the importance of going beyond an analysis of the performance of privatised firms based on short-term macro-level and financial analysis which are widely adopted by national and international development organisations. Similar research findings and arguments have been made by scholars conducting performance evaluation of privatisations in emerging economies such as Nigeria (Bakre and Lauwo, 2016), Brazil (Wanderley et al, 2011) and China (Xu and Uddin, 2008).…”

Section: State Capitalism From a Historical Institutionalist Perspectivesupporting

confidence: 82%

A historical institutionalist perspective on the persistence of state controls during financial sector reforms: the insightful case of Myanmar

Win

Kofinas

2020

JAEE

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PurposeMany transition economies are former socialist planned economies and have undergone market reforms of their financial sector to signal their transition towards democracy. However, governments in these countries have been reluctant to relinquish the pre-existing controls on economy and have adopted nuanced and sophisticated approaches to retain control. In such context, scholars may find it challenging to investigate the role played by the state in the success or failure of attempted market reforms. This work investigates the different forms of state-induced accounting controls that may preserve the status quo within the economy during transition, using Myanmar as an example.Design/methodology/approachThe authors adopted a longitudinal qualitative research method aiming to reveal the very processes and mechanisms used by the banks and their evolution over time. This method is in accordance with the historical institutionalist perspective that we have applied within this research.FindingsThe authors found that the Myanmar government embarked on the privatisation of their financial sector from 1990 to 2016 as a major public sector reform initiative. Under the guise of market reforms, it used both state-led and market-led controls to emulate and retain the socialist banking model where banks are used to fund the immediate government's budget deficits. This created a series of intended and unintended consequences, resulting in the ultimate failure of the government's market reforms.Research limitations/implicationsPreviously, research on public sector management accounting in emerging economies was not relying consistently on using theory. The relative limited theorisation led to gaps when attempting to understand and explain the opaque forms of state control mechanisms in transition economies. By applying historical institutionalist perspective, and a more theory-driven, reflective approach to the interpretation of the data collected, we have provided a deeper insight and understanding on how different forms of state controls can emerge, adapt and persist in transition economies such as Myanmar.Practical implicationsThe authors demonstrated that though the state may have implemented market reforms to signal regimes change, this does not necessarily mean that the government has relinquished their control on the economy. The state could take a more sophisticated, covert approach towards state controls leading to both intended and unintended consequences. Thus, even if the state's preferences change, the decisions cannot be easily reversed, as path-dependent state controls may have become pervasive affecting any further institutional and policy developments. Thus, the authors suggest that governments in both transition and developed economies should be cautious when enacting regulations on corporate control.Originality/valueIn this paper, the authors have applied a historical institutional perspective in our analysis instead of the more widely used sociological, institutionalist approach. This allowed authors to harness rich longitudinal data indicating that market reforms and their success or failure should be examined as an ongoing process rather than a completed action. This is especially important in transition economies where the state may be unwilling to renounce the existing controls on the industry and may resort to more opaque forms of state control, eventually obstructing the intended reforms.

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Section: State Capitalism From a Historical Institutionalist Perspectivesupporting

confidence: 82%

A historical institutionalist perspective on the persistence of state controls during financial sector reforms: the insightful case of Myanmar

Win

Kofinas

2020

JAEE

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“…Using Bourdieu's institutional sociology, they submit that accounting practices alongside the social interactions within which they are embedded enabled corruption in a Canadian Government sponsorship program. Bakre and Lauwo (2016) provide evidence of the use of accounting in the undervaluation of assets of a privatised Nigerian-Government entity (Nigerian Telecommunications Limited), "concealment of possible malpractice, and subversion of the accountability that it should have delivered in the privatisation process" (p. 45). In furtherance, using the recent adoption of International Public-Sector Accounting Standards by Nigeria as the focal point, Bakre et al (2017) investigate the implication of their adoption for corrupt practices of state agents.…”

Section: Maj 362mentioning

confidence: 99%

The role of accounting in conflicts resolution

Abdul-Baki

2019

MAJ

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Purpose This study aims to examine an alternative use of accounting information and technology (forensic audit) for resolving conflicts between two government agents and consequently enhancing accountability in Nigeria. Design/methodology/approach The study adopts contextualised explanation of case study theorising. Data for the study were gathered from two primary documents: the forensic audit report of PricewaterhouseCoopers (PwC) and the report of the Senate Committee on Finance and Appropriation. The theory of mediation is used to illuminate the mediation process and its implication for accountability. Findings The study finds that the mediator (PwC) was able to resolve the dispute using different problem-solving techniques (data gathering and fact finding) of accounting and provide guidance on the necessary steps to be taken to enhance accountability. Whilst the disputants agreed to the audit firm’s findings, further actions to hold relevant parties accountable were not taken by the government. Accounting aids in realising accountability, but it is not the ultimate tool, as it operates within a host of other accountability infrastructures that subvert its impact. Research limitations/implications This study uses a single case to understand the role of accounting in conflicts resolution. Therefore, as a general limitation of a case study design, we do not generalize beyond the case examined in this study. Practical implications The study has implications for accounting practice in developing countries. Firstly, the paper finds that accounting is held in high esteem as having the ability to unravel mysteries through its problem-solving techniques. Secondly, professional accounting firms need to maintain a high level of competence and integrity to sustain this position. Thirdly, accounting can help answer the question “Who should be held accountable?” Originality/value The study examines a novel case of how accounting is used in resolving conflicts in a rare setting and in ensuring accountability over public funds.

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“…In 2010, the Financial Reporting Council of Nigeria (FRC) implemented IFRS for all publicly accountable companies (Bakre & Lauwo, 2016). The IFRS requirements led to the variations in the responses to the changes in accounting standards.…”

Section: Introductionmentioning

confidence: 99%

The Effects of Organisational Culture on IFRS Adoption: Evidence from Nigerian’ Companies

Edeigba

Gan²,

Amenkhienan³

2018

ijafr

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This study investigates the underlying factors contributing to the International Financial Reporting Standards (IFRS) adoption in Nigeria. The diversity of responses to IFRS adoption is a phenomenon that requires empirical investigation to understand the reasons why some companies adopt IFRS other do not. Previous studies have investigated preparers of financial statements’ compliance with IFRS. However, there is a dearth of research on the influence of cultural factors on IFRS adoption. Little has heretofore has been done to examine cultural variables as determinants of IFRS adoption. This study applies a self-administered survey instrument to elicit data from four major cities in Nigeria. The analysis involves applied logistic regression to estimate the relationship between the covariates and the companies’ decisions to adopt IFRS. The results indicate companies’ professionalism, transparency, flexibility, secrecy, uniformity and statutory control are significant factors impacting IFRS adoption at different magnitudes. For example, a company that considers IFRS will increase the level of financial statements transparency is more likely to maintain some levels of secrecy. The study identifies that IFRS adoption can only be successful when accountants develop the relevant technical expertise in IFRS requirements prior to the implementation. Consequently, there is a need for more practical training in IFRS accounting valuation, recognition, measurement and disclosure of financial information to users of financial statements. The diversity in responses to IFRS adoption, where some companies adopt and others show resistance to IFRS requirements has been a phenomenon that requires empirical investigation to understand the rationale. Though some studies have investigated companies’ compliance with accounting regulations in Nigeria, there is limited research on factors influencing IFRS adoption. A consequence is that efforts to come up with effective policies to enhance IFRS adoption and obtain compliance status for Nigerian companies are constrained. The objective is to contribute to initiatives aimed at assuring foreign investors of reliability of IFRS financial statements prepared by Nigerian companies.

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Privatisation and accountability in a “crony capitalist” Nigerian state

Cited by 38 publications

References 38 publications

A historical institutionalist perspective on the persistence of state controls during financial sector reforms: the insightful case of Myanmar

A historical institutionalist perspective on the persistence of state controls during financial sector reforms: the insightful case of Myanmar

The role of accounting in conflicts resolution

The Effects of Organisational Culture on IFRS Adoption: Evidence from Nigerian’ Companies

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