Research On The Cause Of Formation Of Governmental Accounting Reforms "Performance Paradox"

At present, governmental accounting reforms are extensively being carried out in western countries and have been paid highly close attention to by related international organizations. But the researchers have made clear that there exist an inconsistent problem named as "performance paradox". The paper takes neo-institutional economics, public choice and other subjects as theoretical bases, clarifies the contractual and institutional natures of governmental accounting in theory, then progressively explains clearly the cause of formation of this problem, and puts forward some proposals about how to reform budget accounting and establish governmental accounting in our country. This research not only expands further the contents and improves the explanatory power of governmental accounting theories, which makes up the theoretical deficiency of discussing the problems of governmental accounting reforms only from technical point of view, but also is helpful for our country to recognize accurately, systematically and roundly the experience and lessons of governmental accounting reforms in western countries and draw up scientific reasonable viable strategies of governmental accounting reforms.As economic organizations, governmental sectors are productive firms, which are charge of supplying public goods. They are essentially the connex of contracts. Under this assumption, governmental accounting simultaneously has contractual and institutional natures: the former means that governmental accounting itself is a kind of bounded incomplete contract and contributes to agree to, perform and relieve governmental contracts. But it takes effect on the prerequisite that rational economic entities demand and utilize governmental accounting information in order to supervise agents and make decisions; the latter means that governmental accounting is at least in line with related institutions in form and lends itself to institutional pressures. So, it becomes the institutional results and actual carriers to a great degree. In the mass, these two objective natures require that we should recognize governmental accounting problems respectively from the "efficiency mechanism" and the "legitimacy mechanism".The economic nature of governmental accounting reforms is the modification or replacement of contracts. However, it usually gives expression to applying a new governmental accounting model or technical tool in broad terms. In addition, this nature won't alter, although governmental accounting reforms are due to related institutional change. To a governmental sector supplying public goods, accounting reforms generally serve to achieve two goals, namely ensure contractual efficiency and improve contractual legitimacy, which separately accord with the contractual and institutional natures of governmental accounting. But their requests to governmental accounting are probably completely inconsistent, even sometimes as wide as poles apart. This exactly becomes a sally port of researching the cause of formation of governmental accounting reforms "performance paradox". Moreover, this also determines that we should focus on the macroscopical institutions influencing governmental accounting reforms and the microcosmic contracts and their incentive effect in a single governmental sector.It is necessary that microcosmic governmental accounting reforms are promoted by macroscopical institutional change. The institutions are internalized in the accounting contracts of every governmental sector by means of enforcement or incentive. When a governmental sector performs accounting reforms, it will achieve the goal of improving contractual legitimacy. It will also establish a new accounting form and make contracting entities' conditions of obtaining information better, namely in addition to budget information, it will help them receive more information, which is beneficial for them to supervise agents. But because of the restrictions of incentive structure factors, governmental accounting information is hard to influence the quantity of supervising agents. So, governmental accounting information is not necessarily utilized to supervise agents. Then, agent problems and agency cost will not decrease and the performance of governmental sectors supplying public goods will not enhance. Under this condition, the problem of governmental accounting reforms "performance paradox" will appear. Obviously, governmental accounting reforms are a very complex and challenging systemic undertaking.This paper's innovations are mainly presented as follows:1. Chooses the problem of governmental accounting reforms "performance paradox" as research subject and explains why governmental accounting reforms are not necessarily achieve the expected goal of high performance in theory. It breaks through the limitations of mainly researching the problems of governmental accounting reforms only from its necessity and implementation methods in our country.2. Looks on governmental sectors as productive firms responsible for supplying public goods and clarifies their economic nature as the connex of contracts. On this basis, the paper also demonstrates the contractual and institutional natures of governmental accounting and differentiates between governmental accounting and its related institutions.3. Deeply researches the economic nature and goals of governmental accounting reforms at the micro-level, which breaks through the limitations of researching the problems of governmental accounting reforms only from adopting a new technical tool in order to improve governmental sectors' performance.4. Deeply researching the institutions effecting governmental accounting reforms. Public accountability, new public management and fiscal transparency are all regarded as informal institutions (mainly ideologies). And this paper elaborates the characters of these ideologies effecting governmental accounting reforms.5. Systematically analyzes the contracts and their incentive effect of bureaucrats, politicians and the general public. On this basis, the paper also discusses their behaviors to treat governmental accounting information, which avoids the research defect of transcendentally supposing that users will spontaneously demand and utilize governmental accounting information.