From state capitalism to political factionalism

Culture

*where cultural expectation is basically two types which are traditional &
modern, the local leaders face basically three sort of conflicting
expectations traditional, modern or hybrid.
* Village culture and religious obligations superseded bureaucratic
rationality.
* Ghana gold mine where miners were used to agricultural patterns of work
and time, and managers modified work practices and budgets accordingly.

Ethnicity

* Ethnicity can compound cultural issues.

*State capitalism emphasizes meritocracy where race and ethnicity should
be irrelevant but often underpinned the reproduction of national politics
within firms.
Politics

* Politics do not consist of much parties.

* Parties follow regional, ethnic, religious or charismatic leaders, and
reflected traditional allegiances not modern ideologies whether socialist or
capitalist.

Trade Unions

* In many LDCs trade unions are conduits to political power. State

capitalism appreciates trade union for collective bargaining. However party-
based unions with branches fuel inter-union and party rivalries within
factories. Trade unions central players constrain managers operating
commercially.

International Finance bodies-World Bank & IMF

*Support state led industrialization but ideological and political dependence

secure loans rather than projects economic merits or likelihood of execution
*Many LDCs are forced to choose between Soviet bloc and Western donors,
convincing either of their strategic importance. This encourages corruption,
economic mismanagement, and patronage politics.
State Owned Entities(SOEs)
*Production not accounting language directs management(i) due to
government pressure to complete projects (ii)insufficient materials and
production capacity(iii) state control of costs and prices considered as the
budget problems of them.
*Accounting unrelated to reward or actual circumstances are irrelevant to
managers specially when political interventions predominate which also
prevents the meaningful accountability to be occurred.
* Politicians found space for political maneuver when SOE losses and large
public sector deficits diminished resources.

*International financiers become frustrated with states corruption,

inefficiency, and failure to deliver services to the poor and then take turn to
market capitalism and NGOs.

Market Capitalism
*It supports Structural Adjustment Programmes(SAPs). It helps LDCs to be
eligible for International Finance Capital and Capital Market by
(i)eliminating subsidies(ii)price controls and import barriers (iii)reorganising
and lessening public ownership of domestic banks;(iv) promoting private
banks and domestic capital markets; (v)Privatizing or closing SOEs; and(vi)
introducing new public management (NPM) in government agencies.

*It also promotes legislation that forces legislation into collective bargaining
and protecting labor rights, specially in export zones that stimulate
economic performance.
* SAPs were enforced in many LDCs confronting fiscal deficits like for
Bangaldesh, Ghana, Srilanka etc.
* SAPs require effective accounting but development economists and policy
makers often neglect this as they incline to macro-economic solutions
basically.
* Non accountants usually assume that accounting, especially if it follows
international standards, will provide the information and transparency
necessary for financial markets to invest optimally and make enterprises
accountable to them.
* SAPs provide macro-economic solutions to fiscal problems where delivering
aid programs are only indirectly dealt and NGOs have a major role there.
* International finance and aid agencies and foreign governments have
increasingly transferred projects from LDC governments to NGOs in the
belief that NGOs are more transparent and accountable (especially to
beneficiaries) and have more effective internal controls. However, there is
little accounting research on whether this is so.

Whence Market Capitalism?

*The World Bank, IMF and Western donors like USAID are accused of
ignoring local resistance to privatisation;
* Stiglitz (2002) argues that IMF solutions worsen (even create) problems
by unduly promoting global finance interests.
* whether MASs reproduce market capitalism whilst serving broader
development goals or do they foster political factionalism and coercive
controls?
*Answer can be obtained through the exploring through three broad areas
which are:
(i) MAS within private enterprises
(ii) MAS within NGOs
(iii) MAS within public sector organizations.