Accounting for varieties of capitalism: The case against a single set of global accounting standards

Martin Walker

The British Accounting Review, 2010, vol. 42, issue 3, 137-152

Abstract: This paper argues that the optimal design of accounting standards may depend on the institutional characteristics of the political and economic system. There are several varieties of capitalism, and it is not obvious which of these varieties is best. Moreover, the existence of different varieties of capitalism arguably promotes economic progress. This being the case the paper urges a cautious approach to the imposition of a single set of global accounting standards for all companies. The forced adoption of single form of accounting runs the risk of severely restricting the different forms of capitalism that can develop. It also privileges one particular way of doing business over alternative forms that currently exist or, more importantly, may exist in the future. In effect the forced adoption of a single form of accounting can be viewed as a form of restrictive practice that prevents alternative and superior ways of doing business from taking shape. International accounting standards optimised for stock market based capitalism are not necessarily optimal for other forms of capitalism and, since stock market capitalism has lost credibility as a way of doing business, the world may be better served by encouraging alternative forms of capitalism to develop with accounting standards tailored to their needs.

Keywords: Conceptual framework; Economics of uncertainty; Evolution of institutions; International accounting standards; Political economy of institutions; Varieties of capitalism (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:bracre:v:42:y:2010:i:3:p:137-152

DOI: 10.1016/j.bar.2010.04.003

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