Modernizing Governmental Accounting Standards in Greece: A Case of 'Garbage Can' Decision-Making

Abstract

Purpose: In this paper we examine the standard-setting process at the central government level in a country operating under special circumstances of financial strain. More specifically, we analyze the decision-making process under which the new modified cash-based set of accounting standards was developed in the Greek central government.Design/methodology/approach: We develop a theoretical framework combining public choice theory with the can model. The public choice theory helps us understand the incentives of the various involved actors that played a role in the reform process. The can model provides insights that facilitate the understanding of the choices made while deciding on the new set of standards. The theoretical framework is informed by interviews and informal discussions withmembers of the commission that developed the new set of standards as well as by relevant archival data.Findings: The findings indicate the lack of effective monitoring of the process by both politicians and external resource providers. The set of standards developed is largely the outcome of the incentives and the cooperation of bureaucrats and consultants. The results provide evidence of unclear technology, fluid participation and problematic preferences, which indicate decision-making through the garbage can.Originality/value: We examine governmental accounting standard-setting and decision-making in a country: (a) operating under resource dependency, (b) dealing with a vortex of financial and administrative reforms, and (c) characterized by a deeply bureaucratic public sector.