© Blackwell Publishing Ltd. 2003.

Editorial

Globalisation and its discontents: a concern about growth and globalizationChristine Cooper*, Dean Neu+ and Glen Lehman

It began to worry me, you see, this destruction of fish, this attrition oflove that we were blindly bringing about, & I imagined a world of thefuture as a barren sameness in which everyone had gorged so muchfish that none remained, & where Science knew absolutely everyspecies & phylum and genus, but no-one knew love because it disap-peared along with the fish. (Flanagan, R., Gould’s Book of Fish: ANovel in Twelve Fish, Picador, 2002).

Over the last two decades, the internationalization of accounting has

been gathering steam. Fuelled on by academic and popular interest in

globalization, advocates of the internationalization of accounting have

argued for the promulgation of accounting standards that erase the local

in the interest of harmonizing the global (Volcker, 2000; Cooke, 2001).

These apostles of internationalisation have not only encouraged the

introduction of ‘common’ accounting standards but also indirectly sup-

ported the deregulation and privatization of the economy (cf. Johnson

and Kaplan, 1987). The processes of globalization have had a huge

impact on contemporary life. While life in the global commons holds

many possibilities for creating new and innovative ways of being-in-

the-world, globalization also suggests a drive toward homogenization

and standardization. Globalization destabilises our understanding of

accounting with associated effects on empire, the environment and the

social sphere in which accounting is conducted. We hear a great deal

about the positive impacts of deregulation, outsourcing and privatiza-

tion within the sphere of economic reproduction because of the facili-

tative market effects, particularly at the global level. These trends

present new challenges for accounting scholars.

One of the side effects of these movements has been an increased ques-

tioning of ‘representational faith(ful)ness’. On one level, representa-

tional faith(ful)ness refers to the ability of accounting numbers to

capture economic reality in an increasingly complex and globalized

world. For example, often an assumption is made that, if the ‘figures’

Address for Correspondence: Christine Cooper, University of Strathclyde, DeanNeu, University of Calgary, Glen Lehman, University of South Australia

are constructed in line with current mandatory and international stan-

dards, then the accounts are true and fair. Yet what is reported often

apparently bears little relation to a reasonable view of the true finan-

cial health of the company. One set of solutions has been to accelerate

the harmonization process in the attempt to achieve compatibility

between accounting systems since such internationalisation will allow

users to translate different financial results easily and effectively.

On another level, however, representational faith(less)ness refers to

those re-presentations that are erased when American-centric

accounting standards and regulations are imposed on distant locales

(Manassian, 2001). This line of questioning emphasizes the social rela-

tions that are simultaneously rationalized and hidden by such banal

accounting standards (Tinker, 1985; Arnold and Cooper, 1999; Neu,

2001). In contrast to the research that starts from the a priori assump-

tion that harmonization/internationalization is the solution, this line of

questioning seeks to understand what is the problem that is being

‘solved’ by internationalization and what are the consequences

associated with the solutions.

Despite their differences, both of these streams of research have raised

a series of important questions regarding the linkages between account-

ing and globalization: for example, what is globalization exactly; how

is it related to the accounting harmonization process; do accounting

regulations facilitate globalization—perhaps by providing the means

through which multinationals have been able to utilise offshore shelters

to avoid local regulations; what are the roles of international account-

ing firms and other international organizations in these processes?

This special issue brings together a series of papers that not only

examine the positioning of accounting within globalization processes

but also seek to make visible those aspects that usually remain hidden.

Jeff Everett (2003) offers an argument that accounting researchers need

to consider the dialectical relationships between itself and the craft of

accounting. He advocates an ‘alternative’ view of accounting—one that

sees accounting as social and transformative, that pays heed to those

voices arguing for greater social and environmental justice, and that

draws attention to the role of accounting researchers in the process of

globalization. While Jeffrey Unermann (2003) takes a different

approach and focuses on disclosures made by an early TNC (Shell). He

analyses how these disclosures might have been used as part of a strat-

egy aimed at protecting and enhancing the political and economic hege-

mony of Shell (and other oil industry TNCs). Unermann uses a

theoretical framework drawn from classical political economy of

accounting; it identifies patterns of disclosure consistent with a corpo-

rate strategy of protecting and advancing the power and wealth of

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capital in a global corporation with little regard to the impact this might

have had on individual states. Prem Sikka (2003) continues the critical

focus and argues that while scholars disagree about its extent, signifi-

cance and direction, there is considerable agreement that relatively easy

mobility of finance across porous territorial boundaries, with the aid of

information technologies, is central to the processes associated with

contemporary forms of globalization. Sikka also notes that offshore

finance centres are tax havens that play a key role in facilitating growing

mobility of finance and shaping complex webs of interactions and rela-

tionships involving the nation-states, multinational corporations, a

wealthy elite and ordinary citizens. Cameron and Neu (2003) examine

how the World Bank operates as a coordinating agency within the field

of higher education. Through the technology of the World Bank spe-

cific financial strategies operate as the carriers of globalization practices.

By focusing on organizations such as the World Bank, they identify and

trace the mechanisms through which globalization practices are dif-

fused. Namely, they discuss the three main activities used by the World

Bank to wield its authority and influence: lending, technical assistance,

and the publication of reports.

One of the commonalities contained in the included articles is an

emphasis on the need to examine the broader social and environmen-

tal consequences associated with the craft of international accounting.

For example, Everett (2003) argues that research needs to begin a

process that interprets what are the effects and impacts of accounting

on communities. In particular, he argues that accounting needs to

concern itself with ‘these [social] effects and with the people suffering

from them’ and that this process can begin at either the ‘local or global

level’ (Everett, 2003). Likewise, the article by Graham and Neu (2003)

suggests that the internationalisation of accounting movements often

start from the presumption of market efficiency that, in turn, encour-

ages certain accounting solutions:

What is the dynamic among the ways in which accounting technolo-gies make visible certain problems, suggest certain solutions, opera-tionalise these solutions, and encourage certain consequences?(Graham and Neu, 2003).

An obvious adverse outcome is that these solutions do not adequately

interpret, or explore the impacts of accounting on different communi-

ties. Nor does it allow other voices to be given an explicit means to

articulate their needs and values that shape their lives. Implicit within

this line of argument is a questioning of whether liberal-globalisation

processes perpetuate a means-end culture of control. Traditional

accounting, as a sibling of economics, has been premised on the assump-

tion that economic growth promises a better world and that this world

would be characterised by greater material prosperity and equality

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Accounting Forum Vol 27 No 4 December 2003 361

within and between nations. Even more recently, economic growth,

especially through free-market liberalisation, has been advocated as a

path to solving environmental problems as well. As this dream is

unlikely to be realised within the current system it is therefore impor-

tant that we begin to reconsider the role of accounting in the process

of harmonizing and globalizing accounting. Indeed, this need is now

more important than ever, given the ideological hegemony of global

capital and the increasing disharmony between nation-states. For

example, a need exists to consider the impact on local communities

associated with initiatives such as multi-lateral trade agreements, free-

market liberalization and processes of harmonization. These trends have

created a climate whereby our lives are governed by these trends rather

than the other way around (Everett, 2003; Graham and Neu, 2003).

It is argued that the International Monetary Fund’s ‘World Economic

Survey: Globalisation, Opportunities and Challenges’ should continue

with a neo-liberal logic that assumes that a free-market order leads to effi-

ciency and a fair distribution of economic resources. This report observed:

The discipline of global product and financial markets applies not onlyto policy-makers, via financial market pressures, but also to the privatesector, making it more difficult to sustain unwarranted wage increasesand mark-ups. If markets adopt too sanguine a view of a country’seconomic policies and prospects, however, this could relax policy dis-ciplines for a time and result in a high adjustment cost when marketperceptions change . . . [Then] markets will eventually exert their owndiscipline, in such a way that the time period for adjustment may bebrutally shortened. (IMF, World Economic Survey: globalisation:opportunities and challenges, International Monetary Fund, Washing-ton DC. (1997), pp. 70–71 and World Bank, World developmentreport 1997: the state of a changing world, Oxford University Pressfor the World Bank, New York, (1997).)

This perspective has it roots in Hayekian libertarian arguments that the

intensification and integration of international capitalism is conducive

to the rule of law and a peaceful world order. (Hayek, 1976). Arguably,

free-market globalisation acts as a leviathan that imposes an economic

incentive structure as the principal goal to be developed and protected.

Proponents of this form of ‘free-market globalization’ believe that these

structures will stabilize relationships in the global world order, but

recent global economic and financial problems illustrate the problem-

atic implications of this claim. Put simply, are all citizens unambiguous

beneficiaries of globalization? It is becoming well known that the richest

20% of the world’s population consume 86% of the world’s private

goods, while the poorest 20% consume only 1% (data found in

ISEE, 2003: http://www.ecologicaleconomics.org/news/announc.htm).

Among the poor, unemployment remains high, nutrition is deteriorat-

ing, and epidemics have returned. We are concerned that the high rates

362 Cooper et al.

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of energy and materials use by the rich threaten our health, reduce eco-

nomic access of the poor, and are breaking down the life support

systems required by future generations.

As natural and social scientists working together to correct modern

social and ecological crises, we are morally concerned with inequity and

strategically concerned with how inequity limits our ability to reach

common agreements on global environmental problems (cf. Lehman,

1999). Here a role for accounting involves exploring not only how we

account but what we account and why. This leads to a concern with

those globalization processes which operate through global processes of

transmission that transcend boundaries; these invariably reduce the

ability of nations to manage their own social and environmental prob-

lems (Cooper, Greenwood et al., 1998; Catchpowle and Cooper, 1999;

Neu & Gomez et al., 2002).

The articles contained in this special issue encourage us to think about

the role and functioning of accounting within these processes. For

accounting researchers who are committed to the development of

accountability in the public sphere it is important that we analyze not

only how current accounting(s) encourage certain effects but also how

we can imagine different accountings. This would, as a first and pre-

liminary step, allow us to consider and evaluate the connections

between these various structures and institutions within the global

economy. The articles contained in this special issue provide us with

some tentative first steps in reevaluating and reimagining the linkages

between globalization and accounting.

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