The institutionalization of public sector accounting reforms: the role of pilot entities

Abstract

PurposeThis paper aims at understanding the action of pilot entities, in order to ultimately infer about their role to the overall reform process of public sector accounting (PSA).Design/methodology/approachTaking the Portuguese case as a reference, the new institutional theory (isomorphism perspective) and institutional logics are used to explain the action and stance of pilot entities in the implementation process of reforms.FindingsPilot experiments are expected to provide feedback on the main difficulties felt in the implementation of a new PSA system, helping to define a global strategy to overcome those problems and to improve the system to be generally and finally put into practice. Nevertheless, entities seem to find it important to be pilots, more for individual advantages than for the common benefit of the reform as a whole. Therefore, in order for them to actually be important actors in the reform process, pilots need to be included in the decision process, better realizing the benefits of the new IPSAS-based system and be provided with the proper technical, human and financial support.Research limitations/implicationsThis research suffers from some limitations, namely concerning the use of questionnaires. The findings may, in some points, reflect the perceptions of the respondents and not the actual reality. Additionally, the respondents were not asked about any personal background factors, which may influence their answers. Also, they did not allow relating the new PSA system features with the way pilot entities (re)acted. In regard to the implications for practice, the study points to a need for decision-makers and external support bodies to work more closely with pilot entities in the overall design and implementation of PSA reforms. Pilot entities need to understand the importance and usefulness of changes, and reform authorities need to better recognize their institutional reality and the support they require. Only in this way, the use of pilots can make a difference in the implementation of PSA innovations.Originality/valueThis paper contributes to theory by adding to a better understanding of the role of the ones acting in the development and implementation of PSA innovations, enlightening on how pilot entities can act/react. Despite several studies on PSA reforms, very few so far have addressed pilot entities in particular, their attitude and actual contribution toward PSA reforms, and why. The case of Portugal as a frontrunner in adopting an IPSAS-based system within the EU helps contribute to that understanding in the setting of European countries.

Implementation of the international public sector accounting standards in Europe. Variations on a global theme

“…Regarding isomorphic pressures, in line with the extant literature, we found in our empirical analysis both isomorphic pressures and functional narratives for the implementation of IPSAS across countries, in the first place. Coercive and mimetic pressures (Jorge et al, 2020;Tagesson, 2015) were identified, i.e. the IPSAS either have been pushed by international organizations (such as the IMF in Iceland, in reacting to the financial crisis) or serve as an "orientation device" for issues where the IFRS remain silent (in UK; CIPFA, 2012).…”

“…Extant literature points towards functionalist (e.g. achieving higher performance: Brunsson et al, 2012, or receiving better conditions when borrowing on the credit market: Chytis et al, 2020) and institutionalist perspectives (coercive, normative and mimetic isomorphic pressures to gain and maintain organizational legitimacy; Jorge et al, 2020;Oulasvirta, 2014;Tagesson, 2015). Coercive pressures are particularly relevant for emerging economies (stemming from donor organizations), as, e.g.…”

Accountants’ postures under compulsory digital transformation imposed by government oversight authorities

“…Following Jorge et al. (2020), pilot entities could be selected to develop training programs and understand the needs of accountants in the context of the forced adaption of digital technologies. The oversight authorities or international donors interested in pushing for digitalization may rely on compulsory transformation—initially focused on compliance—to foster the emergence of empowered departments and teams, and to promote visionary leaders who look forward to developing a comprehensive digital agenda.…”

“…Thus, the promoters of national projects could reflect on how to improve and amplify the project of digital transformation by extracting benefits from the compulsory approach; for instance, by considering an adequate level of organizing to deal with the digital developments implemented by the consignees. Following Jorge et al (2020), pilot entities could be selected to develop training programs and understand the needs of accountants in the context of the forced adaption of digital technologies.…”

Gender-responsive budgeting in Austria: The narrow line between implementation and confirmation

“…Due to the gradual embedding of GRB into the budget system, with making use of pilot projects (Jorge et al, 2021), and the pre-existence of an Inter-Ministerial Working Group' and a Watch Group, the process of change can be characterized as 'incremental' (Streeck & Thelen, 2005) and not abrupt, which is also backed by the fact that the compositions of the circles for the RIAs (Figure 3) did not change significantly over time. However, regarding the results of change, it is not yet clear if the reform will eventually lead to a 'gradual transformation' of existing budget practices (Streeck & Thelen, 2005).…”