The Influence of Economic (Ir)rationality on Public Sector Reforms

Article


Bowrey, Graham, Smark, Ciorstan and Jones, Greg. 2019. "The Influence of Economic (Ir)rationality on Public Sector Reforms." e-Journal of Social and Behavioural Research in Business. 10 (1), pp. 24-39.
Article Title

The Influence of Economic (Ir)rationality on Public Sector Reforms

ERA Journal ID123340
Article CategoryArticle
AuthorsBowrey, Graham (Author), Smark, Ciorstan (Author) and Jones, Greg (Author)
Journal Titlee-Journal of Social and Behavioural Research in Business
Journal Citation10 (1), pp. 24-39
Number of Pages16
Year2019
Place of PublicationMapleton, Australia
ISSN1838-8485
Web Address (URL)http://www.ejsbrb.org/a.php?/content/issue/19
Abstract

Purpose: The purpose of this paper is to review the development, the increasing influence and impact, direct and indirect, of economic rationalism on the financial recording and reporting reform agenda of the Australian public sector. A focus of this paper will be to explore whether these reforms could be more appropriately considered to be rationalised myths adopted for reasons other than their purported advantages.
Design/methodology/approach: This paper explores the influence of economic rationalisation on public sector financial reform through a theoretical framework based on legitimacy and the lens of institutional isomorphism which considers the adoption of certain reforms and practices via coercive, memetic and normative isomorphic pressures. It these pressures which eventuate in the creation and strengthening of the rationalised myths associated with these reforms.
Findings: The key finding from this research is that the influence of economic rationalism has led to the adoption and implementation of various reforms, (often based on private sector practices), which could be viewed as rationalised myths implemented to increase the legitimacy of the public sector, rather than to improve service delivery. The adoption of private sector practices is seen as a reaction to the institutional isomorphic pressures the public sector is experiencing to legitimise itself within society, and not necessarily as an attempt to improve efficiency, effectiveness and performance, which are the new recently promoted objectives of the public sector. To resist the isomorphic pressures would be a sign the public sector is not accepting of (best) practices based on notions of economic rationalism.
Originality/value: This paper provides a new approach to exploring the recent financial reforms in the Australian public sector while providing some direction for future research in challenging the taken-for-granted assumptions upon which public sector reforms are often justified.

KeywordsAccountability; Accrual accounting; Economic rationalism, Institutional theory; Rationalised myths
ANZSRC Field of Research 2020350103. Financial accounting
350199. Accounting, auditing and accountability not elsewhere classified
350102. Auditing and accountability
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Byline AffiliationsUniversity of the Sunshine Coast
University of Wollongong
University of Southern Queensland
Institution of OriginUniversity of Southern Queensland
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