A Comparison of Budgeting and Accounting Reforms in the National Governments of France, Germany, the UK and the US

• Author: Marine Portal,Klaus Lüder,Evelyne Lande,Rowan Jones
• DOI: http://doi.org/10.1111/faam.12022
• Date: 01 November 2013
• Published date: 01 November 2013

Financial Accountability & Management, 29(4), November 2013, 0267-4424

A Comparison of Budgeting and

Accounting Reforms in the National

Governments of France, Germany,

the UK and the US

ROWAN JONES,EVELYNE LANDE,KLAUS L¨

UDER AND MARINE PORTAL∗

Abstract: This paper compares technical aspects of accrual-based budgeting and

accounting reforms of the national governments of France, Germany, the UK and

the US. It shows that there is no consensus among the four countries about the

complete package of technical reform possibilities that is most appropriate; there is

also no consensus among the four countries about each one of the possibilities that is

most appropriate. What is clear is the resilience of traditional budgetary accounting

systems. It is also clear that, in the fundamental context and content of the reforms,

the UK is the striking exception.

Keywords: budgetary accounting, accrual basis, national governments, France,

Germany, UK, US

∗Jones is Professor of Public Sector Accounting, University of Birmingham. Evelyne Lande

is Professor, University of Poitiers. Klaus L¨

uder is Professor Emeritus of Public Financial

Management and Business Administration, German University of Administrative Sciences

Speyer. Marine Portal is a lecturer, University of Poitiers. This paper resulted from a project

entitled ‘Foreign Countries’ Government Accounting Management and Reform Experience

[France, Germany, the UK and the US]’, which was part of the ‘Study of the Strategic

Framework of China’s Government Accounting Reform and Management’ by the Treasury

Department, Ministry of Finance of China, sponsored by the World Bank, January-July 2010.

The material that explicitly draws on this project is with the authorisation of the Treasury

Department, Ministry of Finance of China. Thanks are due to Maurice Pendlebury (Cardiff

University), who was a co-researcher on the UK study, and James Patton (University of

Pittsburgh), who commented on the US study. The France and Germany country studies

included interviews in March 2010 in their respective Ministries of Finance. The paper

benefitted from comments made at the associated seminar on ‘Government Accounting

Regulations’, Jiayuguan, 26–28 May 2010, and at the 13th Biennial CIGAR Conference, Ghent,

June 9–10, 2011. Thanks are also due to the two anonymous referees. Responsibility for the

paper remains exclusively with the authors.

Address for correspondence: Rowan Jones, Birmingham Business School, University House,

Edgbaston, Birmingham B15 2TT, UK.

e-mail: R.Jones@bham.ac.uk

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420 JONES, LANDE, L¨

UDER AND PORTAL

INTRODUCTION

We have witnessed about twenty-five years of accrual-based accounting reforms

in national governments, in some cases preceded by accrual-based accounting

reforms in lower-level governments. As influential as these reforms have

been, and even as some clear drivers of reform have been identified, the

reforms did not have a comprehensive blueprint. Given the complexities of

the panoply of possible reforms, it is not surprising that researchers have

identified clear divergence in the implementation of reform. It is natural to

want to understand, at the very least and as far as possible, the current

experience of the reformers. The seriousness of the current global financial

crisis and its relevance for government finance added significant impetus to

the need for this understanding. Moreover, national governments that are now

considering reform, or are in the process of reform, have particular interest in

the current experience of reformers; this provided another specific motivation

for the research on which this paper reports.

Our research questions are:

•What are the key technical aspects of accrual-based budgeting and

accounting reforms in each national government of four major, developed

economies that had either implemented reforms during the past twenty-

five years or were in the latter stages of reform?

•How does a comparative analysis of the four add to our understanding of

those reforms in national governments as a whole: how different are the

reforms?

A central premise of this research is that, for national governments in

particular, budgeting technique is indispensable to our understanding of

accounting. National governments are unique institutions: their uniqueness is in

their sovereignty over – with the attendant responsibilities for – each respective

country as a whole.1In definitive contexts, this uniqueness is in the relations

between their legislatures, executives and judiciaries. Money is at the heart of

all institutions and, in national governments, the budget is the fundamental

expression of money: the budget expresses a national government’s sovereignty

in financial terms. The accounting literature has rarely addressed this unique

setting directly.2

Budgeting for national governments has not been a matter of accounting,3

as defined either by the accounting profession or by standard-setting bodies

independent of the profession. Within each national government setting, the

budget has its own rules and conventions, and its own consequent accounting

against the budget. Since the 1980s, the accounting profession and its off-shoot

standard-setting bodies have exerted significant influence on theory and practice

globally but the emphasis of this influence has been on ex post accounting;

moreover, because budgeting is largely absent from the dominant forms of

financial reporting addressed by these bodies, this emphasis focuses on operating

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