THE ROLE OF
ACCOUNTING IN AGENCIFICATION
Budi Waluyo, PhD
Polytechnic of State Finance STAN
My PhD thesis
Management by Accounting:
An Ethnography of Agencification
up to 1975 1976-1980 1981-1985 1986-1990 1991-1995 1996-2000 2001-2005 2006-2010 2011-2015 2016-2020*
Book 0 0 2 0 0 1 2 5 2 1
Book Chapter 0 0 0 0 0 0 0 1 5 1
Journal Articles 1 13 17 2 32 53 50 83 174 159
PhD Thesis 0 0 0 0 0 3 1 2 4 0
Total 1 13 19 2 32 57 53 87 185 161
0 20 40 60 80 100 120 140 160 180 200
Evolution of research on
agencification
Country of analysis
Continent Country of Analysis N. Articles N. Books/
Chapters
Europe UK 25 6
The Netherlands 12 4
Norway 6 2
Belgium 4 2
Denmark, Germany, Ireland 1 each 2 each
Portugal 1 1
Sweden 3
Finland 2
Austria, Croatia, Estonia, France, Hungary, Italy, Latvia, Lithuania, Romania, Slovakia, Spain, Switzerland
1 each
Australia and Oceania
Australia 2
New Zealand 2
Asia Japan 2
Korea 2
Thailand 2
Hong Kong, Israel, Japan, Pakistan 1 each
Africa Tanzania 1 2
America USA 1 2
Jamaica 1
Multi-countries 20 3
Supra-nationals European Union 7 3
Total 84 59*
Motivation to the study
“We need more extensive research into the
internal management systems and cultures of
agencies. Conceivably, this research could reveal another layer of convergence, at what might be called the micro-level”
(Pollitt et al., 2001, p.288, emphasis added).
Pollitt, C., Bathgate, K., Caulfield, J., Smullen, A. and Talbot, C. (2001) 'Agency fever? Analysis of an international policy fashion',Journal of Comparative Policy Analysis: Research and Practice, 3(3), pp. 271–290.
Purpose
• This study attempts to describe the everyday accounting in semi-autonomous agencies by observing micro-processes of agencification.
• This study explores the interplay between
accounting as the practice and agencification as
the context.
Theoretical Framework
Theoretical Framework
• From a practice perspective, agencification is not an application of reform principles such as NPM.
• Practice approach looks agencification as a social environment of a number of practices.
• Agencification does not come from principles, but
it is built every day from this ordinary actions.
Accounting
• Accounting: financial management in its widest sense.
Accounting is broadly defined as embedded calculative practices in various kinds of organisations. This goes beyond the context of bookkeeping and financial reporting (such as performance contracting) and includes some aspects of related practices in the agencies (such as financial management) as long as it is not connected to the construction of (financial) markets
• Accounting can be considered a situated human action for ‘doing’ semi-autonomous agencies.
• Agencification can be seen as a social world in which
accounting take place.
Ethnography
The 20 most frequent words
Key Findings
• What is it like to be . . . ?
• A Financial Manager: Trouble is a Friend
• A Treasurer of Expenditure: Undertaking a High-Risk Job
• A Treasurer of Revenue: Dealing with Daily Reports
• Habitualisation: What does it mean to be a semi-
autonomous agency?
Key Findings
• Performance Contracting as Interaction Ritual
• The contract signing rituals show five layers of secular ritual:
[1] explicit purpose;
[2] explicit symbols and message;
[3] implicit statements;
[4] social relationships affected; and [5] culture versus chaos.
0 10 20 30 40 50 60 No answer
Colleague Parent Ministry Other party Directorate PPK-BLU (The MoF) Supervisor/academics
Number of answers
When you need to know more about BLU, who will you ask for?
The role of accounting
• Accounting-oriented Agencification?
• Agency managers and staff pursue agencification purposes using accounting.
• Accounting, when entering the semi-autonomous agencies setting, is capable of imposing new patterns of autonomy and control, new
forms of legitimate behaviour of the involved actors, and distinct rationalities for individual and organisational actions.
• Accounting techniques (such as the use of special chart of accounts) and financial representations (such as daily revenue reports) have become an essential part of the ‘vocabulary’ of agencification.
The role of accounting
• Management by Accounting
• Agencification advocates management by accounting
through greater use of accounting techniques, reform of accounting procedures, accounting-based measurement of outputs, and greater adoption of business-like accounting practices.
• Management by accounting was intensely pursued in the agencies, to rationalise that financial representations
provide “the truest and most effective means of identifying and evaluating activities”
Conclusion
• A distinct structure and routine for a similar end: using accounting as a managing tool.
• The practice of accounting recognises diverse meanings of agencification in the daily processes that surround the
involved actors.
• Agencification gives way to accounting-led agencies by providing more space for calculative initiatives.
• Everyday accountings are consequential in structuring the contours of agencification
Contribution
• Theoretical
Practice theory provides a rich analytical framework to
uncover why and how accounting practices are organised in the context of a reform movement within public sector
organisations.
• Practical
Managing government institutions is about implementing regulations; there is limited space for discretion and
preferences. However, how this space is used is important.
