The role of the Troika on the Greek central government accounting reforms. The reprioritization riddle

• Pages: 316-330
• Date: 09 April 2018
• DOI: https://doi.org/10.1108/IJPSM-06-2016-0101
• Published date: 09 April 2018
• Author: Sandra Cohen,Sotirios Karatzimas
• Subject Matter: Public policy & environmental management,Politics,Public adminstration & management

The role of the Troika on the

Greek central government

accounting reforms

The reprioritization riddle

Sandra Cohen

Department of Business Administration,

Athens University of Economics and Business, Athens, Greece, and

Sotirios Karatzimas

Department of Business, Universitat Autonoma de Barcelona, Barcelona, Spain

Abstract

Purpose –The purpose of this paper is to explore the role of the Troika’s advent played in the progress of the

budgeting and the financial reporting systems reform at the Greek central government level.

Design/methodology/approach –The approach of an extreme country case study is adopted. The data

used in the paper have been identified through document analysis performed on the relevant documents

produced by the Troika, the Greek Ministry of Finance, andother relevant sources. The reform process is seen

through the lens of the neo-institutional theory and the resource dependency theory.

Findings –Although both reforms targeted the introduction of best international practices –particularly

usefulin periods of financial distress and scarceresources –the advent of theTroika affected their progressand

changed thepriorities. As a result, the reform was redirectedtoward strengtheningthe cash budgeting system.

Research limitations/implications –The study is subject to the limitations of an extreme case

study research.

Practical implications –This is a case where resource dependency changes political priorities and

directions and affects the evolvement of state budget and accounting reforms under way.

Originality/value –The role of external fund providers in public sector financial management reform

priority-setting, in the case of a developed Eurozone country, is analyzed. The study contributes to the

research agenda on accounting practices in times of austerity.

Keywords Greece, Financial crisis, Public sector accounting, Resource dependency theory,

Accounting reforms, The Troika

Paper type Research paper

1. Introduction

In periods of severe financial recession, countries face considerable difficulties in acquiring

the necessary resources to operate. In these cases the role of organizations that act as

external fund providers is undeniable (Carpenter and Feroz, 2001). Scarce resources urge

states in need to seek funding from transnational organizations as, for example, the World

Bank (WB) and the International Monetary Fund (IMF). These organizations, in return,

might put pressure on these states for the implementation of specific reforms (Carpenter and

Feroz, 2001; Timoshenko and Adhikari, 2009). International literature provides several

examples where these external resource providers play a catalytic role in the enforcement of

reforms that accompany the financial aid given (Sahlin-Andersson, 2000; Mimba et al., 2007);

especially in cases of developing and transitional countries where organizations as the WB,

the IMF, and the Asian Development Bank offer consulting services and financial aid in

parallel (Galera and Bolívar, 2011). Therefore, it appears that the assistance is provided in a

twofold way: directly through the financial aid, and indirectly through the structural

reforms –based on best international practices –that might be encouraged or enforced.

The recent global financial crisis caused great turbulence to various Eurozone countries

(Greece, Cyprus, Portugal, and Ireland). This led to the development of a unique formation of

International Journal of Public

Sector Management

Vol. 31 No. 3, 2018

pp. 316-330

© Emerald PublishingLimited

0951-3558

DOI 10.1108/IJPSM-06-2016-0101

Received 6 June 2016

Revised 31 October 2016

18 March 2017

16 June 2017

Accepted 23 August 2017

The current issue and full text archive of this journal is available on Emerald Insight at:

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