Mussari, Cepiku and Sorrentino (2021) examine the issue of governmental accounting reforms in Italy and whether the global financial crisis impacted the reform approach in their article “Governmental Accounting Reforms at a Time of Crisis”, published in the Journal of Public Budgeting Accounting & Financial Management. Italy had undertaken an initiative to harmonize accounting practices across different levels of government, which was in the design phase when the 2008 crisis emerged. The crisis highlighted financial management weaknesses in many European nations, raising questions about its influence on public sector accounting reforms underway. This article investigates whether and how the situation affected Italy’s harmonization paradigm. The research problem is salient, given the linkages between governmental accounting and fiscal policy and the potential for crises to catalyze significant reforms. The authors use the case of reform in progress during the crisis to assess if the turmoil reinforced or disrupted the status quo trajectory. This response will summarize the problem, analyze the research strategies, and evaluate the methodology. It also suggests additional research directions that could build upon this work to address gaps in understanding fiscal crisis impacts on public financial management reforms.
What is the problem addressed in the article?
The critical problem addressed is understanding the relationship between fiscal crises and governmental accounting reform approaches (Mussari, Cepiku and Sorrentino, 2021). Specifically, the authors investigate whether financial problems prompt deviation from or continuity of existing public sector accounting reform paradigms. This builds on literature like Pollitt (2013), who also studied continuity versus change in accounting reforms after the financial crisis. But Mussari et al. make an essential contribution by focusing on a reform already in progress rather than post-crisis reforms. They note prior literature often conceptualizes crises as triggering radical policy shifts. However, crises can also reinforce the pre-crisis status quo and approaches. Given how the 2008 global financial crisis amplified concerns about budget deficits and sovereign debt levels, this debate has salience in governmental accounting and financial management. A key unresolved issue is how crises impact accounting reforms already in progress when the crisis hits versus post-crisis reforms initiated after the tumult. The authors focus their study on this under-examined question through the case of Italy’s accounting harmonization reform, designed when the crisis emerged in 2011. Their specific research questions are whether the financial crisis impacted the paradigm underlying Italy’s ongoing public sector accounting reform and, if so, whether it intensified or shifted the pre-existing reform paradigm and approach.
What are the strategies followed by the researchers to solve this problem?
The researchers utilized a qualitative, retrospective case study methodology involving document analysis and interviews to examine the effect of the financial crisis on Italy’s accounting reform paradigm. They adapted narratological concepts from prior public administration literature to systematically compare the narratives within reform legislation and documents before and after the crisis emerged to identify paradigms. Specifically, they assessed the scope, dominant theme, solutions proposed, and assumptions embedded within different publications to determine the accounting reform paradigm in the pre and post-crisis periods. They also conducted semi-structured interviews with commission members involved in the accounting harmonization reforms to gain additional insights into how the financial crisis impacted their work. The document narrative analysis and interviews enabled the researchers to determine whether the crisis reinforced or redirected the established reform paradigm. The narrative-based document analysis provides a structured approach to assess paradigm continuity or change before and after the 2008 crisis based on the underlying narratives and rationale of the reform proposals and policies. The interviews help strengthen validity and provide important participant perspectives from policymakers closely involved in the harmonization initiative on how the crisis influenced the reform process and paradigm. The specific case focus on Italy’s harmonization reform initiative provides an in-depth context for exploring these dynamics.
Explain why you agree or disagree with the strategies followed by the researchers to solve the problem.
The research strategies used to provide appropriate and illuminating qualitative tools for investigating the problem of how fiscal crises influence governmental accounting reform paradigms. The combined approach of document narrative analysis and interviews offers complementary data on understanding paradigms within the reform initiatives and how the financial crisis impacted the process. Coding narratives using the framework adapted from Pollitt (2013) enables assumptions, rationales, and reform paradigms to emerge from the documentary evidence rather than imposing predefined categories. This facilitates a systematic comparison of the accounting reform paradigms before and after the 2008 crisis. Using multiple coders also enhances reliability in identifying paradigms from the narratives. Meanwhile, the interviews help confirm the findings from the document analysis and provide critical insights into the financial crisis’s undocumented influences on shaping the accounting harmonization reform that may not be captured directly in the documents. The case focus on Italy’s harmonization initiative provides an excellent basis for an in-depth exploration of the research problem and avoids speculating more broadly. Since the harmonization reform was already undergoing design when the crisis hit, it offers a unique context to closely examine how the crisis impacted an ongoing accounting reform process. However, the research methodology could be strengthened by analyzing the reform implementation outcomes after the initial design phase to help validate the document narrative analysis and investigate if longer-term paradigm shifts emerged after the early crisis period studied. Overall, the qualitative, case-based methodological approach provides thoughtful and appropriate strategies for investigating the complex problem of how fiscal crises influence public sector accounting reform paradigms.
Future Research Directions
To build on the research by Mussari et al. (2021), future studies could further address gaps through comparative analyses across national contexts, incorporating theoretical frameworks and extending the timeline examined. Comparative analysis across multiple similar cases could enrich the understanding of contextual factors shaping crisis impacts. Situating the research within theoretical accounting and public policy literature would provide a conceptual basis to understand if crises align with punctuated equilibrium theories of radical change or incremental models.
Tracing reforms from design through long-term implementation would reveal if short and long-run effects differ. This longitudinal approach could also examine subsequent crises to analyze iterative impacts over sequential events versus single shocks. Surveys and quantitative indicators complement the qualitative methods to strengthen measurement and generalizability across contexts. Connecting specific reform features to fiscal performance outcomes could reveal patterns in effective crisis responses. Broader recommendations could be formulated on adapting accounting paradigms during tumultuous shocks and promoting resilience. The inclusion of practitioner perspectives would further enrich the understanding of crisis decision-making dynamics. Such expansions building upon this research could strengthen governmental accounting policymaking frameworks under pressure and enhance adaptive capacities.
Conclusion
In conclusion, this response provided an analysis of the research methods utilized to study the effects of fiscal crisis on governmental accounting reform paradigms in the context of Italy’s harmonization initiative. The document narrative analysis approach drawing on Pollitt’s (2013) framework and semi-structured interviews furnish well-suited qualitative techniques for systematically comparing accounting reform paradigms before and after a crisis and identifying specific mechanisms through which a crisis exerts influence on public financial management reforms. The case focus enables a much deeper exploration of crisis effects on a specific ongoing reform than abstract speculation or studies only examining post-crisis reforms. While expanding the scope to analyze longer-term post-design implementation outcomes could enrich the findings, the mixed methodology provides meaningful, nuanced insights into the complex problem of how acute fiscal crises can influence and reshape governmental accounting reform paradigms during periods of upheaval. This helps address a significant gap in understanding these influential dynamics, given the recurring nature of economic crises and the close interlinkages between public sector accounting systems and wider fiscal policy management.
The narrow case focus on Italy’s harmonization process enables a much deeper exploration of how the financial crisis impacted a specific reform agenda already in progress compared to solely speculative discussion. While expanding the scope to examine post-design implementation outcomes could enrich the findings, the combination of detailed document analysis and interviews provides meaningful, nuanced insights into the complex problem of how fiscal crises influence and shape governmental accounting reform paradigms. This helps address a gap in understanding these dynamics, which are crucial given the recurring nature of crises and the close interlinkages between public sector accounting and fiscal policy management. Overall, the study provides an instructive analysis that enhances comprehension of how crises can catalyse and reinforce public sector accounting reforms during periods of upheaval.
References
Mussari, R., Cepiku, D., & Sorrentino, D. (2021). Governmental accounting reforms during a crisis: the Italian governmental accounting harmonization. Journal of Public Budgeting, Accounting & Financial Management, 33(2), 138-156. https://www.emerald.com/insight/content/doi/10.1108/JPBAFM-04-2020-0051/full/pdf?title=governmental-accounting-reforms-at-a-time-of-crisis-the-italian-governmental-accounting-harmonization
Pollitt, C. (2013). The evolving narratives of public management reform: 40 years of reform white papers in the UK. Public Management Review, 15(6), 899-922.
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