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The Power of Transnational Private Governance: Financialization and the IASB

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  • Nölke, Andreas
  • Perry, James

Abstract

This investigation of accounting standard setting as a case of business power in global governance links together three facets of power. First we examine the discursive power of international accounting standards in the ongoing process of financialization, which we break into two dynamics centered on profit and control. We argue that the selection of accounting paradigms does not concern measurement accuracy but is rather a choice of perspectives between finance and production when presenting economic reality as numbers. Drawing on evidence from the contestation between Rhenish capitalism and the financial perspective, we then explain why, despite the overwhelming structural power of finance, instrumental power exercised in political lobbying over accounting standards can still have considerable success.

Suggested Citation

  • Nölke, Andreas & Perry, James, 2007. "The Power of Transnational Private Governance: Financialization and the IASB," Business and Politics, Cambridge University Press, vol. 9(3), pages 1-25, December.
    • Handle: RePEc:cup:buspol:v:9:y:2007:i:03:p:1-25_00
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    Cited by:

    1. Müller, Julian, 2014. "An accounting revolution? The financialisation of standard setting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(7), pages 539-557.
    2. Roland Königsgruber, 2010. "A political economy of accounting standard setting," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 14(4), pages 277-295, November.
    3. Vera Palea, 2021. "Sustainable Development as a Fundamental Goal of the EU and its Implications for Business in Society," Annals of the Fondazione Luigi Einaudi. An Interdisciplinary Journal of Economics, History and Political Science, Fondazione Luigi Einaudi, Torino (Italy), vol. 55(2), pages 225-242, December.
    4. Bebbington, Jan & Kirk, Elizabeth A. & Larrinaga, Carlos, 2012. "The production of normativity: A comparison of reporting regimes in Spain and the UK," Accounting, Organizations and Society, Elsevier, vol. 37(2), pages 78-94.
    5. Parker, Rachel & Cox, Stephen, 2018. "How the globalisation and financialisation of mining Majors affects linkage development with local engineering and technology suppliers in the Queensland resources industry," Resources Policy, Elsevier, vol. 58(C), pages 125-130.
    6. Cooper, Christine, 2015. "Accounting for the fictitious: A Marxist contribution to understanding accounting's roles in the financial crisis," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 30(C), pages 63-82.
    7. Adam Leaver & Keir Martin, 2021. "‘Dams and flows’: boundary formation and dislocation in the financialised firm," Review of Evolutionary Political Economy, Springer, vol. 2(3), pages 403-429, December.
    8. Thiemann Matthias, 2014. "The impact of meta-standardization upon standards convergence: the case of the international accounting standard for off-balance-sheet financing," Business and Politics, De Gruyter, vol. 16(1), pages 79-112, April.
    9. Inesa IACOB, 2014. "Fair-Value Accounting – Between Innovation And Need," THE YEARBOOK OF THE "GH. ZANE" INSTITUTE OF ECONOMIC RESEARCHES, Gheorghe Zane Institute for Economic and Social Research ( from THE ROMANIAN ACADEMY, JASSY BRANCH), vol. 23(1), pages 91-98.
    10. Palea, Vera, 2014. "Financial Reporting for Varieties of Capitalism: The Case Against a Single Set of International Financial Reporting Standards," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201442, University of Turin.
    11. Young Kevin, 2015. "Not by structure alone: power, prominence, and agency in American finance," Business and Politics, De Gruyter, vol. 17(3), pages 443-472, October.
    12. Jason Thistlethwaite & Matthew Paterson, 2016. "Private governance and accounting for sustainability networks," Environment and Planning C, , vol. 34(7), pages 1197-1221, November.
    13. Palea, Vera, 2013. "The Politics of Fair Value Reporting and the Governance of the Standards-Setting Process: Critical Issues and Pitfalls from a European Perspective," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201353, University of Turin.
    14. Zdenek Kudrna & Patrick Müller, 2017. "Harmonizing Internationally to Harmonize Internally: Accounting for a Global Exit from the EU's Decision Trap," Journal of Common Market Studies, Wiley Blackwell, vol. 55(4), pages 815-831, July.
    15. Zhenfa Li & Fulong Wu & Fangzhu Zhang, 2023. "Adaptable state-controlled market actors: Underwriters and investors in the market of local government bonds in China," Environment and Planning A, , vol. 55(8), pages 2088-2107, November.
    16. Palea, Vera & Biancone, Paolo Pietro, 2017. "Which Accounting Rules for Economic and Social Sustainable Development? Engaging Critically with IFRS Adoption in the EU," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201733, University of Turin.
    17. Palea, Vera, 2017. "Whither accounting research? A European view," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 42(C), pages 59-73.
    18. Hilgers, Sven, 2014. "Manager of financial globalization? The European Union in global anti-money laundering and international accounting standard setting," PIPE - Papers on International Political Economy 22/2014, Free University Berlin, Center for International Political Economy.
    19. Yasmine Chahed, 2021. "Words and Numbers: Financialization and Accounting Standard‐Setting in the United Kingdom," Contemporary Accounting Research, John Wiley & Sons, vol. 38(1), pages 302-337, March.
    20. Palea, Vera, 2015. "The political economy of fair value reporting and the governance of the standards-setting process: Critical issues and pitfalls from a continental European union perspective," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 29(C), pages 1-15.
    21. Ryszard Kata & Justyna Chmiel, 2020. "Financialisation Level of Non-Financial Enterprises in European Union Countries: A Comparative Analysis," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 378-398.
    22. Palea, Vera, 2015. "Journal Rankings and the Sustainability of Diversity in Accounting Research," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201546, University of Turin.
    23. Palea, Vera, 2018. "Financial reporting for sustainable development: Critical insights into IFRS implementation in the European Union," Accounting forum, Elsevier, vol. 42(3), pages 248-260.
    24. Sigrid Quack & Paul Lagneau-Ymonet, 2012. "What's the Problem ? Competing Diagnosis and Shifting Coalitions in the Reform of International Accounting Standards," Post-Print hal-01520519, HAL.

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