- Elgar original reference
Edited by Trevor Hopper, Mathew Tsamenyi, Shahzad Uddin and Danture Wickramasinghe
Chapter 12: Management Control after Privatization: Illustrations from Less Developed Countries
12 Management control after privatization: illustrations from less developed countries Trevor Hopper, Mathew Tsamenyi, Shahzad Uddin and Danture Wickramasinghe 1. INTRODUCTION The effect of neo-liberal economic reform programmes in less developed countries (LDCs) upon management accounting systems is controversial. A striking facet is the pressure the World Bank and the IMF put on many LDCs to pursue privatization policies (Cook and Kirkpatrick, 1995; Craig, 2000; Parker and Kirkpatrick, 2005). Often this was an inescapable condition for loans, which LDCs often are in a weak position to decline (Uddin and Hopper, 2003; Goldman, 2005). Some LDC governments have adopted privatization programmes of their own volition but others have done so grudgingly under external pressures. Many development economists and agents of the World Bank assume that such reforms will produce more effective controls, increase enterprise efficiency and, in turn, boost national development (World Bank, 1993, 1995, 1996c; Cook and Kirkpatrick, 1995; Toye, 1994; Goldman, 2005; Parker and Kirkpatrick, 2005). Advocates of privatisation emphasise the lack of financial accountability and transparency in state owned enterprises (SOEs), and their immunity from market discipline and the scrutiny of legal institutions (World Bank reports, 1995, 1996a, 1997). They recommend fostering an ‘enabling environment’ that promotes accountability, transparency and efficient companies. This entails: liberalizing domestic and foreign trade; relaxing price controls; balanced government budgets; and maintaining a legal framework and financial reporting and accountability systems conducive to the functioning of a market economy. The justification for these policies is that private ownership is more efficient than public...
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