International Accounting Standards in Africa: Selective Recursivity for the ‘Happy Few’?
| Date | 01 November 2017 |
| Published date | 01 November 2017 |
| DOI | http://doi.org/10.1111/1758-5899.12514 |
International Accounting Standards in Africa:
Selective Recursivity for the ‘Happy Few’?
Sebastian Botzem
Free University of Berlin, University of Bremen
Sigrid Quack
University Duisburg-Essen
Solomon Zori
Rotterdam School of Management and the Erasmus University
Abstract
This study explores recursivity in international accounting standard-setting, focusing on participation of actors from African
countries. While the International Financial Reporting Standards (IFRS) Foundation bases its legitimacy claims as a global stan-
dard-setter on a combination of expertise and a formally transparent set of recursive procedures for consultation of stakehold-
ers, empirical results show that participation in the latter is geographically very uneven. The article argues that conceptual
mismatch between the standard-setter’s objectives on the one hand and the socio-economic, cultural and political conditions
in many African countries on the other leads to selective recursivity that is problematic for the former’s legitimacy and effec-
tiveness. These findings are of wider relevance for debates on global standard-setting and development.
Policy Implications
•As standard-setters expand their reach to developing countries, they are well-advised to review their objectives, proce-
dures and stakeholder definitions in light of a possible mismatch with conditions and perceived needs of actors in these
countries.
•Financial standard-setters like the IFRS Foundation should open their agenda-setting to a much broader set of constituents
beyond the investor community and actively solicit input from developing country stakeholders.
•Global standard-setters should explore how mutual recognition and equivalence assessments can contribute to bridge
conceptual mismatch with realities in developing countries.
Transnational standards and the Global South
The proliferation of transnational standards governing a
wide range of policy fields, such as environment, develop-
ment, health, food safety and finance, has raised concerns
about the challenges that they pose for developing coun-
tries. As many of these standards have been predominantly
created by actors from the Global North, their diffusion to
developing counties with very different economic, social
and political conditions raises questions about their effec-
tiveness and legitimacy (Andrews, 2013). Existing research
shows that actors from developing countries are often
underrepresented in transnational standard-setting pro-
cesses (Dingwerth, 2008). If the latter are included at all, par-
ticipation is often limited to the ‘happy few’who share a
similar professional outlook and background with those
from the Global North (Botzem, 2012). Without a voice in
the development of global standards, other developing
country actors may consider these standards inappropriate.
Such problems of acceptance, moreover, may result in a
reduction of the standard-setter’s governance capacity.
Hence, as transnational standard-setters expand their
reach to developing countries, they are confronted with
intertwined challenges to their effectiveness and legitimacy.
Such challenges are particularly an issue for recursive gover-
nance schemes because these base their claims for both
legitimacy and effectiveness on the involvement of a broad
range of regulatory addressees, affected parties and broader
publics, together with their responsiveness to these audi-
ences. Existing research emphasizes how power asymme-
tries, lack of resources and paucity of knowledge deter
actors from developing countries from participating in
transnational standard-setting even when procedures for
doing so are formally open (N€
olke, 2015). However, less is
known about how the conceptual underpinnings of global
standards in relation to perceived needs of actors in
Global Policy (2017) 8:4 doi: 10.1111/1758-5899.12514 ©2017 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 8 . Issue 4 . November 2017 553
Special Section Article
To continue reading
Request your trial