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Functions of accounting in the rulership and rule transplanted from the Atlantic to the Pacific

Keith and Hegnes DixonTe Whare Wānanga o Waitahā

Where are we? – the Pacific

Whalers, copra traders, planters, phoshateers, foresters and farmers

Origins of Accounting

I-MatanglandsPlus

Kiribati andAotearoa New Zealand

Accounting Technology

Were there any accountings in Kiribati and Aotearoa before I-Matang arrived?

Rule and Rulership Today

Kiribati Government 2012 BudgetGovernment of New Zealand Budget 2012

Present-day “Pacific” Institutions – Executive and Legislature

Head of State

House of Representatives

Mwaneaba ni Maungatabu

C(K)abinet

Ministries

Other Crown/Republic Bodies

New Zealand Governance Structure

Treasury, 1989

Kiribati Governance Structure

Secretaries - Ministers

Ministries

Mwaneaba ni Maungatabu

Beretitenti & Kabinet

Citizens of the Republic

Kiribati Constitutional Structure with Accounting emphasised

A udit O ffice

A udito r-G enera l

L eg is la tu re

E conom ic P la nn ing A cco unting R evenue C ollec tion

M in is try o f F ina nce

F ina nce M in is te r P ub lic S erv ice O ffice

S pend ing M in is tr ie s

M in is te rs of V a r ious P or tfo lios

P res iden t

World Governance Bodies

International Monetary Fund

United Nations and its various

offshoots

G8

Various Aid Organisations

OECD

USA Federal Government Agencies

Commonwealth

World Bank

European Union Agencies

Various World Religions

Various Transnational Corporations

Peoples Republic of China Agencies

What is Accounting Technology?

Bookkeeping, financial accounting and reporting, management accounting, information systems, auditing, public finance, taxation, organisational finance

Numerical, monetarized calculation techniques and related practices that mediate relations between individuals, groups, and institutions, including accountability relationships that result from social relations

Plays distributive and ideological roles, includes incentive schemes and financing relations, and conveys knowledge over some distance

Mix of changing knowledge and skills, practices and theories, applied by and to people in various organisations and society

Accounting and related practices within the Executive

•Review of past & present; contemplating & forecasting future•Setting Priorities•Estimating•Budgeting•Issuing Warrants to officials to collect revenues and spend appropriations•Transacting and functioning within the warrants issued•Bookkeeping•To legislature - oral accounts, answering questions, engaging in debates•Publishing reports before, during and after transactions and events•Having audits done of their financial statements•Having audits done of their statements about service performance

Public Finance Act 1989 Section 4 Expenses or capital expenditure

must not be incurred unless in accordance with appropriation or statutory authority

(1) The Crown or an Office of Parliament must not incur expenses or capital expenditure, except as expressly authorised by an appropriation, or other authority, by or under an Act.

Realm of New Zealand

Constitution Act 1986 Parliament and Public Finance

Section 21 Bills appropriating public money — The House of Representatives shall not pass any Bill providing for the appropriation of public money or for the imposition of any charge upon the public revenue unless the making of that appropriation or the imposition of that charge has been recommended to the House of Representatives by the Crown.

Section 22 Parliamentary control of public finance — It shall not be lawful for the Crown, except by or under an Act of Parliament,—(a) To levy a tax; or(b) To borrow money or to receive money borrowed from any person; or.(c) To spend any public money.

Realm of New Zealand

Constitution of Kiribati 1979CHAPTER VIII: FINANCE Taxation106. No taxation shall be imposed or altered except by or under law.Consolidated Fund107. (1) There shall be in and for Kiribati a Consolidated Fund into which . . . shall

be paid all revenues of the Government.Withdrawal of money from the Consolidated Fund108. (1) No money shall be issued from the Consolidated Fund except upon the

authority of a warrant under the hand of the Minister of Finance. (2) No warrant shall be issued by the Minister of Finance for the purpose of meeting any expenditure unless-

(a) the expenditure has been authorised by an Appropriation Act; or (b) the expenditure has been authorised appropos this Constitution:

or (c) it is statutory expenditure.

Potted History of “British-settler” New Zealand Institutions

De facto unicameral parliamentary democracy elected under MMP

Colony superseded by Dominion and then by Realm

Establishment of single, bicameral Parliament for whole NZ Colony

Establishment of settler Provincial Governments in each province

Annexation of New Zealand by Queen Victoria of the UKGBI

Bill of Rights 1688 under King William III and Queen Mary II

Confirmatio Cartarum 1297 (referred to as Magna Carta) under King Edward Longshanks

Magna Carta 1215 under King Jean Sand Terre (John Lackland)

Norman Conquest of England under Duc Guillaume (William) of Normandie

Post-Roman Anglicisation of southern Britain

Potted History of Institutions which I-Kiribati presently occupy

Executive presidency and unicameral parliamentary democracy elected under FPP

Internal Self-Rule Bodies for whole of G(E)I Colony

Indirect Rule by resident commissioner and district officers with island Native Governments

Annexation of Gilbert Islands by Queen Victoria, represented by resident commissioner

Western Pacific High Commission under Queen Victoria of UKGBI, represented by high commissioner, within the General Act of the Conference at Berlin of the Plenipotentiaries

Bill of Rights 1688 under King William III and Queen Mary II

Confirmatio Cartarum 1297 (referred to as Magna Carta) under King Edward Longshanks

Magna Carta 1215 under King Jean Sand Terre (John Lackland)

Norman Conquest of England under Duc Guillaume (William) of Normandie

Post-Roman Anglicisation of southern Britain

Institutions in “Atlantic” “democracies”

Executive – directly elected or

drawn from legislature, plus

appointed officials

Popularly-Elected

Legislature(unicameral or

bicameral)

More geography - the old Atlantic

Original “Norman” Model of Institutions

KingCouncil

For explanation and analysis of this basic model, see Congleton (2001)

Dieu et mon droitMonarchy – Divine Right of the King or Queen to rule over his/her subjects

“King and Council” Change Template(Congleton, 2001)

William (or Guillaume) I

Descended from Norse who colonised Normandy

Pressed claims to English throne after death of Edward the Confessor through military action c. 1065

Known as “the Bastard”, but also “the Conqueror”

Absolute Rule by virtue of Divine Right backed by military and civil governmental apparatus of the feudal system

Commanded preparation of Domesday Book, making possible the levying of feudal dues

Magna Carta (13th Century)

John Lackland andEdward Longshanks

12. Nullum scutagium vel auxilium ponatur in regno nostro, nisi per commune consilium regni nostri, nisi ad corpus nostrum redimendum, et primogenitum filium nostrum militem faciendum, et ad filiam nostram primogenitam semel maritandam, et ad hec non fiat nisi racionabile auxilium; simili modo fiat de auxiliis de civitate Londoniarum. [Articles, c. 32.]. . . . 14. Et ad habendum commune consilium regni de auxilio assidendo aliter quam in tribus casibus predictis, vel de scutagio assidendo, summoneri faciemus archiepiscopos, episcopos, abbates, comites, et majores barones sigillatim per litteras nostras; et preterea faciemus summoneri in generali per vicecomites et ballivos nostros omnes illos qui de nobis tenent in capite ad certum diem, scilicet ad terminum quadraginta dierum ad minus, et ad certum locum; et in omnibus litteris illius summonicionis causam summonicionis exprimemus; et sic facta summonicione negocium ad diem assignatum procedat secundum consilium illorum qui presentes fuerint, quamvis non omnes summoniti venerint

Magna Carta (13th Century)

Imperial enactments in force in New Zealand in 2009

NB the original Magna Carta was c. 1215 but the Confirmatio Cartarum 1297 is the one that has been passed down to England and its colonies and former colonies.

Established that the king may not levy or collect any scutage, save with the consent of his royal council. Path from (Absolute) Monarchy to Aristocracy, and House of Lords Spiritual and Temporal

Bill of Rights 1688

The Heads of Declaration of Lords and Commons, recited.WHEREAS the late King James the Second by the

assistance of diverse evill Councellors Judges and Ministers imployed by him did endeavour to subvert and extirpate the Protestant religion and the lawes and liberties of this Kingdome.

…Levying Money. By levying money for and to the use of the crown by pretence

of prerogative for other time and in other manner then the same was granted by Parlyament.

…utterly and directly contrary to the knowne lawes and statutes

and freedome of this Realme.

Bill of Rights 1688

The Subject's Rights. And thereupon the said Lords Spirituall and Temporall and Commons

pursuant to their respective letters and elections being now assembled in a full and free representative of this nation takeing into their most serious consideration the best meanes for attaining the ends aforesaid doe in the first place (as their auncestors in like case have usually done) for the vindicating and asserting their auntient rights and liberties, declare

…Levying money—That levying money for or to the use of the Crowne by

pretence of prerogative without grant of Parlyament for longer time or in other manner then the same is or shall be granted is illegall.

Path toward separation of the Monarch as a person from the office of Monarch, in the

institution of The Crown

No taxation without representation (c. 1765)

The House of Representatives cannot only refuse, but they alone can propose, the supplies requisite for the support of government. They, in a word, hold the purse that powerful instrument by which we behold, in the history of the British Constitution, an infant and humble representation of the people gradually enlarging the sphere of its activity and importance, and finally reducing, as far as it seems to have wished, all the overgrown prerogatives of the other branches of the government. This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure (Madison, Federalist Papers)

Perspectives on who and what conditioned change

Political domination-legitimation perspective – for explanation and analysis, see Gurr, Jaggers and Moore (1991)

Wealth-accumulation, economic development perspective - for explanation and analysis, see Kiser and Barzel (1991)

Political domination-legitimation

Displacement of Autocracy by Democracy Military, political and related acts by those outside the ruling group, often forcing change

on the ruling group The outsiders demanded rights, including in:

▪ consenting to taxation ▪ going to war

▪ holding the ruler to account politically ▪ selecting the ruler(s)

At various times, the outsiders might have included:

▪ Aristocrats ▪ Ecclesiastics ▪ Property Owners

▪ Non-conformist men ▪ Poor fair-skinned men

▪ Men of other skin colours▪ Women ▪ Young men and women

Types of rule and rulership might have included:

▪ Aristocracy (+theocracy) ▪ Plutocracy (=gerontocracy) ▪ Democracy

The road from Runneymede, birthplace of democracy

Wealth-accumulation, economic development perspective

Kings and subsequent rulers (elites, ruling classes) have always been intent on accumulating wealth

The more successful did this through bargaining with their subjects, including aristocrats, bankers, townspeople, commoners, accountants, the middle classes, etc.

Both parties to the bargains gained economically, politically and socially Some bargains entailed extending the “selectorate” in return for consent to

be taxed Change from Autocracy to Democracy was

incidental to the above and unintended

(some) Residences of the Queen of New Zealand

Democracy and Corpocracy

The 20th Century has been characterised by three developments of great political importance:

the growth of democracy

the growth of corporate power, and

the growth of corporate propaganda as a means of protecting corporate power against democracy

(Carey 1995, p. ix, cited in Gaffikin, 2008, p. 192)

Democracy and Aidarchy

The 20th Century has been characterised by three developments of great political importance:

decolonisation and independent sovereignty, based on “king and council” model

the growth of bilateral aid

the growth of aid-in-kind and accounting technology as a means of governing and channelling aid

I-Kiribati Polities c.1800

Control as the key to civilisationc. 1900 Colonial Government Structure takes shape under RC Campbell

Men of Imperial Government – resident commissioners, officials

Use existing “native” government bodies to govern within an agency structure, with responsibility accounting

1894-1914 Island Governments as profit centres Island Governments agents for Queen’s (King’s) Tax Cleanliness and good order, regulation of daily life, village

consolidation and other public works via poll and land tax, collected in copra and labour

By 1917, Revenues belong to Colony Government Island Governments are revenue centres and discretionary expense

centres

1890s-1930s Focus on Civilisation without UK aid

Regularity in the submission of all periodical returns to headquarters is vital. These returns summarise statistically the life and condition of the Colony . . . for the preparation of the Colonial Annual Report and for the information of the High Commissioner [in Suva] and Secretary of State [in London] on special subjects.

The keystone of enduring organisation is an efficient system of records. (p. 29)

Grimble and Clarke (1929)

Accounting and colonial governance

Colony is on 180° London is 0°Think governance, control, and distance in days of sailing and steam ships

Lines of Accounting 1930s

Staff of Restored Colony Government – resident commissioners, officials, professional and technical people

Immediate post-war shortages hindered developments Modernisation led by Bernacchi (1952-61) and Andersen

(1962-69) Done “efficiently”, with UK grants and local revenue,

and bearing in mind end of phosphate revenues Centred on Tarawa to contain costs, maintain eyeball

RC control and meet I-Matang needs Set up reserve fund to save for end Government Trade Scheme becomes Wholesale

Society GEIDA emerged by 1970

Republic Government inherits after 13 years of internal self-rule

1940s-1970sFocus on Restoration and Modernisation with some UK

aid

Post Colonial Political Economy

Single I-Kiribati Polity Urban Tarawa and Outer Islands Constitution, democratic republic No taxation without representation Government structure, systems of control,

and employment Taxation, RERF, no phosphate but plenty of

tuna Boboti and Fledgling Government Businesses Aid in kind, advice, guidance, assessment

Fishing Fleet Companies

Staff of Aid Donors, Project Staff and Consultants

Republic discovered by donors and NGOs Aid-in-kind accepted, so increasing size and scope of

government Local windfall revenues keep pace with growth in

recurrent spending Accounting used to plan and implement projects; and

to report to Canberra, Wellington, Brussels, Tokyo, Taiwan, etc.

More infrastructure, public services and people on Tarawa Outer Islands lose much intellectual capacity

1980s-2000s Focus on Modernisation and Millennium Goals

Staff of Postcolonial Agencies – IMF, ADB, WB, OECD

Turning I-Kiribati into private, rational-economic individuals, customers and clients

Structural adjustment policies Privatisation Deregulation New public management, Business model Output budgeting Individualism and competition Monetary not fiscal policy weapons, end of “agricultural”

subsidies Lower taxes, lower public expenditure

Accounting used to plan and implement projects; and to report to Manila, Washington, etc.

1990s-2000s Focus on Neo-Liberalisation

Where’s the paper?This presentation uses materials written up in: Dixon, K., & Gaffikin, M. (2011). Accounting Practices as Social

Technologies of Colonialistic Outreach from London, Washington, &c.. Unpublished manuscript.

and Dixon, K. (2012) Functions of accounting, types of rulership (-

archies) and forms of rule (-[o]cracies). Newcastle, Northumbria: 13th World Congress of Accounting Historians, 17-19 July 2012.

Contact: Keith.Dixon@canterbury.ac.nz Opening movie clip: http://www.youtube.com/watch?v=WMuXtQ7UYOM