Accounting in its social context: Towards a history of value added in the United Kingdom

Although the relationship between accounting and society has been posited frequently, it has been subjected to little systematic analysis. This paper reviews some existing theories of the social nature of accounting practice and, by so doing, identifies a number of significant conceptual problems. Using the case of the rise of interest in value added accounting in the United Kingdom in the 1970s, the paper conducts a social analysis of this particular event and then seeks to draw out the theoretical issues and problems which emerge from this exercise. Finally, the implications of these for the social analysis of accounting are discussed.     

THE THEORY OF STATE-OWNED ENTERPRISES IN MARKET ECONOMIES

Abstract. Four topics are covered: the circumstances under which state-owned enterprises (SOEs) are more effective than private firms; the different approaches to modelling public and private firms; the performance of SOEs; and strategies including privatization to limit their more damaging effects. It is argued that ideological or development motives are important in their genesis, but that if efficiency and innovation are key considerations the normative case for their existence is more doubtful. Various types of SOE model are identified, deriving from the variety of circumstances in which they operate, and the theoretical perspective of the modeller. These include the property rights school, the public choice tradition, neoclassical, behavioural and budget maximizing approaches. All models assume the existence of monitoring problems, created by informational asymmetry. The consequences can include high non-pecuniary benefits for managers, a concentration on monitored activities, and lower innovation levels and efficiency than private firms. Curiously this is not necessarily reflected in higher prices or costs. Possible remedial strategies include a change of ownership, a change of objectives, the introduction of incentive-compatible payment schemes, improved performance indicators and privatization.     

Redirecting research in business policy and strategy

Because business policy research has primarily been a series of inductive generalizations of case studies; theories have been typically ambiguous and untested, and have not progressed swiftly. Deductive theorizing, by contrast, yields clear, often non-obvious conclusions that can be debated effectively and generalized slowly; so realism of current models can be sacrificed for progress towards realistic future models. Deductive theorizing, with more attention to a game-theoretic definition of equilibrium and to recent ideas from economics, should be one new direction for policy research. Of course, these deductive models will inevitably draw their inspiration from the richness of careful observation and exhaustive checklist-making that are the hallmarks of induction. Specific avenues for new research are described, and the importance of teaching non-obvious theories is defended.     

Book Reviews

Indonesia: The Transmigration Program in Perspective, Washington, D.C.: World Bank, 1988, pp. 227 + xlii. Paper: US$17.00.

William Segers, Changing Economy in Indonesia, Vol. 8, Manufacturing Industry 1870–1942, Amsterdam: Royal Tropical Institute, 1988, pp. 224. Dfl. 48.00.

Leslie Castle and Christopher Findlay (Eds), Pacific Trade in Services, Allen and Unwin, Sydney, 1988, pp. 294 + Xiv. Paper: 24.95; Cloth: $39.95.     

Interactions Between Property and Equity Markets: An Investigation of Linkages in the United Kingdom 1972–1992

Two strands of real estate research—that concerned with the relationships between securitized real estate and the underlying market and that dealing with the role of property in the wider economy—rarely are considered together. The paper utilizes the U.K. equity market and property company share data to explore the relationships between real estate and the rest of the economy, using a two-sector analytic model. Causality analysis suggests that the wider economy leads the real estate market in the short term but that, with a longer lag structure, positive real estate returns may point to negative future returns in the rest of the economy. This provides weak confirmatory evidence for theories of capital switching between sectors.     

Book Reviews

Francois Ruf and P.S. Siswoputantro (eds), Cocoa Cycles: The Economics of Cocoa Supply, Woodhead Publishing, Ltd, Cambridge UK, 1995, pp. xi + 384.

Rainer Rohdewohld, Public Administration in Indonesia, MONTECH (Monash University), Melbourne, 1995, pp. 179 + x, npg.

Colin Brown (ed.), Indonesia: Dealing with a Neighbour, Allen & Unwin, Sydney, 1996, pp. xiii + 202.

Thomas P. Tomich, Peter Kilby and Bruce F. Johnston, Transforming Agrarian Economies: Opportunities Seized, Opportunities Missed, Cornell University Press, Ithaca and London, 1995, pp. xx + 474, Paper.

T, van Rheenen, Quantifying Farming Systems: A Multiple Optimization Approach: A Case Study in the Limestone Area of East Java, Mansholt Studies 6, Wageningen Agricultural University, Wageningen, 1996, pp ix + 145, Paper.     

Replication and reality: or,the future of sociology

This article has been written to raise some questions about the practice of sociology in the past in order to be clearer about sociological practice in the future. Its object is to encourage some reflection on what sociologists do in order that sociology may have a securer future. More specifically the author is concerned with the theoretical implications of some of the methodological assumptions that sociologists make, and with the need for a better epistemological base for sociology as a predicting science.