Italian local governments (LGs) have been in the throat of different reform processes, starting from the 1990s. Similarly to other OECD countries, some of the relevant changes can be related to the managerialisation of LGs with a deep impact on accountability (Humphrey, et al., 1993), accounting techniques and accounting information systems (AISs) (Guthrie, et al., 1999; Lapsley, 1999). The attempt to modernise Italian LGs was based on two main aspects (Mussari, 1997): the move to a Management by result approach, the creation of high level of managerial authority, and the introduction of accounting innovations. Indeed, the reform increased managers’ responsibility in terms of resource allocation and the performances achievement, with the introduction of result-based incentives scheme. The accounting changes are related to the debate developed, in the ‘90s, around the opportunity to move from a financial-based accounting system to an accrual-based one. The result of this debate was the introduction of modified financial accounting. Among the main innovations, the introduction of a budget-like system tries to link resource allocation to performance management, strategic and management accounting tools. The reforms, thus, conducted towards the introduction of new accounting techniques as a support of the managerialisation process. The accountability focus moved to the outcomes of the activity, in terms of efficiency, effectiveness and economy (the three Es). As a consequence, LGs developed more sophisticated AISs, for different purposes: management accounting, managers’ evaluation and incentive schemes, accountability. Accounting, indeed, must not be considered as plain practice, but as part of a process of “rationalising, modernising of the New Public Sector” (Lapsley, 1999: 201). The expected consequences on management behaviour can be related to a widespread use of AISs, since the reinforcement of AISs’ quality and technology may support managers’ decision-making and control. Moreover, the increased responsibility of managers is expected to lead to improved cost and performance consciousnesses, and more attentive internal and external accountability. In the time of writing, there is little empirical evidence of the development of AISs and the factors involved in their use in the Italian LGs. Caccia and Steccolini (2006) present a longitudinal case study on accounting information system development in one municipality, while another study (Steccolini, 2004) showed the limitation of the reporting practices for accountability purposes. Besides, Panozzo (2000) argued about the paradox of Italian public sector reforms where accounting and managerial technologies were introduced as a matter of legal compliance, rather than as a mechanism for enabling change. This paper attempts to contribute to the literature, through an empirical study focussed on the relationship between the role of AISs, the widespread managerialism, and the accountability system in the Italian LGs. The empirical study was conducted in a middle-size municipality and adopted a theoretical framework developed drawing from accounting information system, management accounting, accountability, and public sector reform literatures. The quantitative analysis, integrated with the adoption of qualitative method of enquiry, such as semi-structured interviews and document collection, contributes to theory development in a different institutional setting, and give an insight on the role of AISs in the managerialism process of LGs. The results also suggest the existence of missing links among AISs, decision management and control, and accountability. In particular, AISs seems to play a fundamental role both for the development of managerialism and for accountability purposes, despite the technological and organisational limitations found in the studied LG.

Managerialism, Accounting Information System and Accountability in the Italian local governments: an empirical analysis

BRACCI, Enrico;VAGNONI, Emidia
2006

Abstract

Italian local governments (LGs) have been in the throat of different reform processes, starting from the 1990s. Similarly to other OECD countries, some of the relevant changes can be related to the managerialisation of LGs with a deep impact on accountability (Humphrey, et al., 1993), accounting techniques and accounting information systems (AISs) (Guthrie, et al., 1999; Lapsley, 1999). The attempt to modernise Italian LGs was based on two main aspects (Mussari, 1997): the move to a Management by result approach, the creation of high level of managerial authority, and the introduction of accounting innovations. Indeed, the reform increased managers’ responsibility in terms of resource allocation and the performances achievement, with the introduction of result-based incentives scheme. The accounting changes are related to the debate developed, in the ‘90s, around the opportunity to move from a financial-based accounting system to an accrual-based one. The result of this debate was the introduction of modified financial accounting. Among the main innovations, the introduction of a budget-like system tries to link resource allocation to performance management, strategic and management accounting tools. The reforms, thus, conducted towards the introduction of new accounting techniques as a support of the managerialisation process. The accountability focus moved to the outcomes of the activity, in terms of efficiency, effectiveness and economy (the three Es). As a consequence, LGs developed more sophisticated AISs, for different purposes: management accounting, managers’ evaluation and incentive schemes, accountability. Accounting, indeed, must not be considered as plain practice, but as part of a process of “rationalising, modernising of the New Public Sector” (Lapsley, 1999: 201). The expected consequences on management behaviour can be related to a widespread use of AISs, since the reinforcement of AISs’ quality and technology may support managers’ decision-making and control. Moreover, the increased responsibility of managers is expected to lead to improved cost and performance consciousnesses, and more attentive internal and external accountability. In the time of writing, there is little empirical evidence of the development of AISs and the factors involved in their use in the Italian LGs. Caccia and Steccolini (2006) present a longitudinal case study on accounting information system development in one municipality, while another study (Steccolini, 2004) showed the limitation of the reporting practices for accountability purposes. Besides, Panozzo (2000) argued about the paradox of Italian public sector reforms where accounting and managerial technologies were introduced as a matter of legal compliance, rather than as a mechanism for enabling change. This paper attempts to contribute to the literature, through an empirical study focussed on the relationship between the role of AISs, the widespread managerialism, and the accountability system in the Italian LGs. The empirical study was conducted in a middle-size municipality and adopted a theoretical framework developed drawing from accounting information system, management accounting, accountability, and public sector reform literatures. The quantitative analysis, integrated with the adoption of qualitative method of enquiry, such as semi-structured interviews and document collection, contributes to theory development in a different institutional setting, and give an insight on the role of AISs in the managerialism process of LGs. The results also suggest the existence of missing links among AISs, decision management and control, and accountability. In particular, AISs seems to play a fundamental role both for the development of managerialism and for accountability purposes, despite the technological and organisational limitations found in the studied LG.
2006
Accounting; information; local authorities; management
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11392/520414
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