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How do governments cope with austerity? The roles of accounting in shaping governmental financial resilience

Author

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  • Carmela Barbera
  • Enrico Guarini
  • Ileana Steccolini

Abstract

Purpose - Studies on how accounting is involved in financial crises and austerity are limited. The context of austerity provides an interesting opportunity to explore the role of accounting in shaping governmental financial resilience, i.e. the capacity of governments to cope with shocks affecting their financial conditions. Design/methodology/approach - Based on a multiple case analysis of eight Italian municipalities, this paper explores how accounting contributes to the government capacities which are used to anticipate and respond to shocks affecting public finances. Findings - Municipalities cope with financial shocks differently; accounting can support self–regulation and can affect internally-led or externally-led adaptation. Different combinations of anticipatory and coping capacities lead to different responses to shocks. Practical implications - The findings can be useful for public managers, policymakers and oversight bodies for strengthening governmental financial resilience in the face of crises and austerity. Originality/value - The results provide evidence of the conditions, contexts, processes under which accounting becomes a medium which can support both anticipation of and coping with financial shocks, supporting cuts in some cases and resistance in the short run or driving long-term changes intended to maintain public services as much intact as possible. This highlights the existence of different patterns of governmental financial resilience and thus indicates ways of best preserving the service of the public interest.

Suggested Citation

  • Carmela Barbera & Enrico Guarini & Ileana Steccolini, 2020. "How do governments cope with austerity? The roles of accounting in shaping governmental financial resilience," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 33(3), pages 529-558, March.
    • Handle: RePEc:eme:aaajpp:aaaj-11-2018-3739
    DOI: 10.1108/AAAJ-11-2018-3739
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    Citations

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    Cited by:

    1. Ahmed Saleh Al-Matari & Rozita Amiruddin & Khairul Azman Aziz & Mohammed A. Al-Sharafi, 2022. "The Impact of Dynamic Accounting Information System on Organizational Resilience: The Mediating Role of Business Processes Capabilities," Sustainability, MDPI, vol. 14(9), pages 1-22, April.
    2. Monia Castellini & Vincenzo Riso, 2023. "The Role of Citizens in the Municipalities? Risk Management Process: An Overview in Italy," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2023(1), pages 143-163.
    3. Katarzyna Aleksandra Wόjtowicz & Sabina Hodžić, 2022. "Financial Resilience in the Face of Turbulent Times: Evidence from Poland and Croatian Cities," Sustainability, MDPI, vol. 14(17), pages 1-16, August.
    4. Pham Quang Huy & Vu Kien Phuc, 2022. "Insight into the Critical Success Factors of Performance-Based Budgeting Implementation in the Public Sector for Sustainable Development in the COVID-19 Pandemic," Sustainability, MDPI, vol. 14(20), pages 1-37, October.
    5. Nataliya Pravdyuk, 2020. "Role of Accounting & Analytical Support of State Agricultural Policy in the Context of Financial Crises," Oblik i finansi, Institute of Accounting and Finance, issue 2, pages 50-59, June.
    6. Mouhcine Tallaki & Enrico Bracci, 2020. "Risk Perception, Accounting, and Resilience in Public Sector Organizations: A Case Study Analysis," JRFM, MDPI, vol. 14(1), pages 1-13, December.
    7. Xiaohui Chen & Yiqing He, 2022. "The Impact of Financial Resilience and Steady Growth on High-Quality Economic Development—Based on a Heterogeneous Intermediary Effect Analysis," Sustainability, MDPI, vol. 14(22), pages 1-19, November.
    8. Kevin Baird & Sophia Su & Rahat Munir, 2023. "The mediating role of levers of controls on the association between sustainable leadership and organisational resilience," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 34(2), pages 167-200, June.
    9. Hao Dong & Tao Li, 2023. "Climate Economics and Finance: A Literature Review," Climate Economics and Finance, Anser Press, vol. 1(1), pages 29-45, November.

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