Management Accounting, Economic Reasoning and the New Public Management Reforms

Abstract

Abstract New forms of accounting and new forms of accountability have emerged out of the set of reforms that are often referred to as “New Public Management.” These changes, which are transnational even if they are not yet global, have had an impact on actors in a diverse range of settings including education, culture, policing, probation, prosecution, healthcare, social services, transport and defence. A substantial body of literature on accounting in its social and institutional context has analyzed how accounting practices affect the ways in which organizations, and the various actors that populate them and their environment, define and shape the choices available to them. It has examined how the use of accounting tools and technologies shape the ways in which activities and processes come to be articulated, debated and made operable. Accounting has been seen to possess significant potential for changing the exercise and balance of power within organizations. The roles of accounting expertise in these changes have been discussed, as has the willingness of other experts and professionals to acknowledge the influence of accounting and accountants. This chapter, which focuses on a set of studies that have analyzed the ways in which accounting has contributed to a reshaping of existing power relations in various public sector settings, touches on three separate yet overlapping literatures: first, the relevant literature that has examined accounting in its social and institutional context, both in the public and private sector settings; secondly, the body of research on the accounting aspects of new public management reforms, including studies that go beyond the Anglo-American contexts and that focus in particular on the capacity of accounting to shift power relations in a range of public sector settings; thirdly, sociological studies of professions and professional expertise, for at the heart of the new public management reforms is not only an encounter between different types of practice, but an encounter between formally distinct and often competing professional groupings. Having reviewed briefly these three sets of literatures, this chapter considers in more detail a small number of studies that examine the shift from “financial literacy” to “hybridization,” a shift that is suggested to be a central aspect of the encounter between management accounting, economic reasoning and the new public management reforms.