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Accounting in less developed countries retrospectively and prospectively

posted on 2023-06-09, 01:06 authored by Trevor Hopper, Farzana Tanima
Introduction 80% of the world population (more than 7 billion people) live on less than $10 a day; nearly one half on less than $2.50 a day; and more than 1.4 billion receiving less than $1.25 live in extreme poverty. 870 million people worldwide have insufficient food to eat. According to UNICEF, 22,000 children die daily due to poverty. In 1998, the UN estimated that it would cost $40 billion annually (about $58 billion today) to offer basic education, clean water and sanitation, reproductive health, and basic health and nutrition to everyone in every developing country. In contrast, world military expenditure in 2012 is circa $1.756 trillion (Stockholm International Peace Research Institute Year Book, 2013). Many of these issues, especially poverty and hunger, can be alleviated by direct aid in the form of cash and provisions. This sometimes has merit. For example, a starving person cannot be more productive without greater sustenance, and immediate relief is essential for disasters whether caused by nature or humankind. However, it can only be a limited, temporary solution. If sustained it can create dependency, for example refugees refusing to return home when safe for fear that food and services may be more uncertain or lower than in camps. Longer-run development needs to be sustainable. For example capital donations such as mechanised boats for fishermen can become abandoned due to insufficient resources or expertise to maintain them. Direct aid may simply treat the symptoms rather than the causes of poverty, which vary between countries. These can include lack of natural resources and capital; unstable and/or ineffective governments; poor infrastructure such as transport and communications; inadequate education and expertise; corruption; barriers to trade; and dependence on foreign governments and/or businesses. Development goes beyond merely economic growth. Its benefits need to leverage up resources of the poor, not just with respect to income but also, inter alia, their prospects of employment, an improved quality of life, education and literacy, and participation and influence in local and national politics. At first sight accounting may seem peripheral to achieving this, which may explain the inattention paid to it by researchers in development studies and accounting, indigenous politicians with more pressing matters on hand and, to a lesser degree, external institutions providing aid and finance. Solving poverty will not reside primarily in better accounting but it is an essential, if neglected or taken-for-granted, cog in mechanisms of development. Too often it has been seen as an unproblematic transference of essentially technical systems, regulations and concepts used in rich countries to poor ones. However, this masks a series of issues including the alleged bias of such systems to particular Northern ideologies and interests, not least those of large multi-national corporations; insufficient recognition of indigenous circumstances, needs and participation; implementation problems; inequities of power and an orientation to financial rather than development ends. Hence many accounting policies recommended and/or imposed by external institutions fail in many UDCs (Andrews, 2013). This chapter analyses these issues further. First, it traces how development policies since the 1950s when decolonisation gained momentum (most poor/under developed countries (UDCs) are ex-colonies) have evolved. In so doing it identifies when and how accounting is integral to successive development policies, their repercussions, the actors and constituencies with (and without) influence, and the problems and potential of current policies for development and accounting.


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  • Published





Book title

Routledge companion to critical accounting



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  • Business and Management Publications

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Robin Roslender

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