The Accounting of Government

The accountingization of government, though fraught with problems in implementation, is a strong and important step toward improving the efficiency of public administration while increasing democratic accountability of government. The experience in Britain and elsewhere has shown that divestiture of central bureaucratic controls over public administration has not always been accompanied by flexibility at divisional levels (Schick, 1990, pp. 26-27). Oftentimes, headquarters in the divisions will supplant central controls and subvert operational flexibility. Nevertheless, the objective of decentralization is to empower local divisions with the flexibility to address specific problems in new and creative ways. The division managers thus become directly accountable for their actions. And by developing a system of ôaccountingization,ö these division managers are given an incentive to produce value for money.

Historical experience can be informative on this issue. As colonial powers were routed from the third world around midcentury, it is not surprising that the new, indigenous governments that replaced them were almost everywhere highly centralized. A centralized administrative system was normally part

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19-20). This move toward decentralization has spread throughout the Western industrialized countries. The period since then has seen a wave of decentralization in all the world's major regions (Schick, 1990, pp. 26-27). But the transition has not been smooth. It is clear that decentralization has not been the magic bullet some hoped it would be. The riches are being created; yet governments have typically been unable or unwilling to draw on them sufficiently to meet public needs. To be sure, the answer is partly that the decentralization process is not yet complete. In many countries, central governments that have officially delegated new functions to local governments have been slow to grant local officials enough flexibility to operate them efficiently, or enough authority to raise the revenues to pay for them. This is where the process of ôaccountingizationö becomes important. Decentralization provides flexibility in public management, but more is needed. Decentralization by itself is a necessary but insufficient condition. In order to encourage efficiency, a system of accountability must also go hand-in-hand. Accountability is encouraged through cost and management accounting overlapped with performance budgeting. Schick (
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Approximate Pages = 7 (250 words per page)