A Model of Governance and Accounting Systems in Africa PhD Proposal

Topics: Africa, Poverty, Economic development Pages: 11 (2438 words) Published: April 2, 2010
A MODEL OF GOVERNANCE AND ACCOUNTING SYSTEMS IN AFRICA

PROPOSAL FOR PHD IN ACCOUNTING AND FINANCE

RESEARCH OBJECTIVES

This research, which is motivated by the desire to understand the implications of the ongoing World Bank reforms, examines the role of accounting systems in governance improvements in Africa. The overall objective is to develop a model that will help explain the relationship between accounting systems and governance systems in Africa. The specific objectives of the study are to:

Develop a universally acceptable definition and measurement of governance

Evaluate the extent to which the World Bank reforms in Africa are primarily meant to improve governance,

Analyse the role of role accounting systems in governance improvements in Africa.

Conceptualize the association between accounting systems and governance into theoretical framework that could be used in policy formulation.

RESEARCH PROBLEM AND QUESTIONS

Despite the importance of governance in the World Bank developmental agenda, its conceptualisation and measurement have remained debateable. For example, there is no uniform and acceptable definition of governance (Al-Marhubi, 2004). Furthermore, there is disagreement on the elements and components of governance. While having good accounting and financial systems is likely to contribute to governance development, the available measures of governance produced by the World Bank and other bodies (such as the Mo Ibrahim Foundations) which are used to inform most lending decisions place limited emphasis on accounting systems. There was no specific mention of accounting systems in the variables used to construct these governance indicators. Moreover, no research has investigated directly the relationship between accounting systems and governance systems of a country. The very few accounting studies that have developmental focus have been on the relationship between the adoption of the International Accounting Standards (IASs) and economic development (Larson & Kenny, 1995; Zeghal & Mhedhbi, 2006). These studies have generally recognised the positive impacts of the adoption of IASs (either directly or indirectly) on economic growth. Chamisa (2000) noted that one of the key benefits of IASs is that it induces private sector development by making the investment climate attractive to international investors. As pointed out by Kaufmann et al. (1999) the private sector is an important element of governance quality. It contributes to sustained growth and poverty reduction. In addition to inducing foreign direct investments growth, a high quality accounting system can contribute to a better assessment and collection of tax in developing countries�, providing governments with more resources (World Bank, 2004).

This research argues that accounting has a potential role to play in governance improvements and economic development but has been marginalised as very few accounting researchers are interested in developmental issues. This research is designed to address this gap in the literature. The following research questions are addressed in order to understand the relationship between accounting and governance in developmental agendas:

How do we conceptualise and measure governance?

What is the role of governance in the World Bank developmental agendas in Africa?

What role does accounting systems play in governance improvements in Africa?

BRIEF OVERVIEW OF LITERATURE

The relationship between governance and economic development has been the subject of debates for decades (Gradstein, 2003; Kaufmann & Kraay, 2003). It has been generally argued that governance quality is mostly accountable for the success and the economic development of countries through improvement in living standards (Knack, 2002) and reduction in the potential for nation-state failure (Rotberg, 2004). Evidence suggests that countries with better governance have achieved superior development outcomes (Knack & Keefer,...

References: Annisette, M. & Neu, D., (2004) 'Accounting and empire: an introduction ', _Critical Perspectives on Accounting_, 15: 1-4
Burnside, C., & Dollar, D., (2000), 'Aid, policies and growth ' _American Economic Review_, 90: 847-868
Economic Commission for Africa, (2005), _African Governance Report_, Addis Ababa: Economic Commission for Africa
Economic Commission for Africa, (2005), _Striving for good governance in Africa_, Addis Ababa: Economic Commission for Africa
Jaspersen, F., & Shariff, K., (1990), _The Macroeconomic Underpinnings the Adjustment Lending_ (Working Paper No. WPS 511), Washington DC, The World Bank
Kaufmann, D
Kaufmann, D., Kraay, A., & Zoido-Lobatón, P., (1999), _Governance Matters_, Washington, DC: The World Bank
Kaufmann, D., Kraa, A
Khan, M., H., (2005), _Review of DFID 's governance target strategy paper_ (Commissioned paper submitted to DFID), London: Department for International Development
Khan, M
Rotberg, R. I., (2004), 'Strengthening Governance: Ranking Countries Would Help ', _The Washington Quarterly_, 28, 1: 71-81
Sachs, J., MCArthur, J
World Bank, (2005), _World Development Report 2005_, Washington DC: The World Bank & Oxford University Press
Zeghal, D
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