Public sector accounting and financial management in a developing country organisational context: a three‐dimensional view

There is a large literature which reports inadequacies in public sector accounting and financial management systems and practices in contemporary developing countries. In this paper we explore the conventional view about the widespread deficiency of public sector accounting and financial management in developing countries. The concept of deficiency is reviewed and then examined through a case study of the Volta River Authority (VRA) in Ghana. We pursue this objective by analysing the empirical evidence in a three‐dimensional fashion i.e. from a technical rational perspective, socio‐historical perspective and socio‐economic development perspective. It is found that although the accounting systems at the VRA are technically sound and well operated, they mask deeper ‘deficiencies’ which become apparent through an appreciation of the socio‐political context in which the VRA operates. Also, they hinder the achievement of the original objective of the VRA, the socio‐economic development of the country. This may reflect a general ‘deficiency’ of accounting systems based on the entity concept.