I imagine some readers are mildly surprised to see my first editorial in an issue focusing on performance management, with PMM editorial board member Christopher Pollitt prominently looking back on its 40-year history (‘Performance management 40 years on: a review. Some key decisions and consequences’—see p. 167) and a suite of other public management papers. This is definitely not a reference to my own PhD thesis in the area of performance management many years ago but, rather, to emphasize that public sector ‘money’ (i.e. finance, accounting) and ‘management’ (i.e. organizational theory, governance, performance management) need to be considered together.
Certainly one of the conclusions from recent decades is that performance is by no means only, but definitely also, financial. The economic cycle is defined on the basis of the financial side of any transaction and finances are in the focus of any government. Measurement and incentives are often, but not necessarily, financial, and government reports contain financial information, among other types of information. Therefore, the fundamental conclusion of the past 40 years is that good practice embraces both financial and non-financial elements. And there have been significant advances on both sides, in particular in terms of methodology. That is where we scholars can arguably contribute most. We are not in the position to take or pre-empt political or managerial decisions, but we need to make sure that politicians and managers take their decisions, but are also held accountable, on the basis of complete, objective, reliable and valid information, prepared with state-of-the-art methodology.
In 2017, there was much discussion about ‘alternative facts’. However, if information is complete, objective, reliable and valid, there should, by the definition of these concepts, be no alternative facts. As much as we regret the way the term ‘alternative facts’ is used these days, we probably need to acknowledge that methodological issues exist. And that, if someone raises such issues, he or she also means us—the scholars.
However, methodology is not limited to statistics. Accounting is also a very traditional methodology and it still has its shortcomings. Just think about the still open dispute between the asset versus liabilities and the revenues versus expenses led approaches, or the debate about using a historical versus current measurement basis. Arguably, an easy way out is to use both methodologies and present both types of information. While this initially looks tempting, it easily leads to confusion and information overload, which defeats the purpose. Information selection also needs to be part of the methodological discussion. And, as there is no automatic pre-selection of financial or non-financial information, we need to come together when we talk about information selection.
I therefore hope for contributions from representatives of both sides; it is sometimes enjoyable and informative to look at the other perspective. And, for those missing accounting articles in this edition, rest assured that we have a significant number of them in the production pipeline, including some very interesting forthcoming themes, such as the one on ‘Managing and accounting for sustainable development across generations in public services’ guest edited by Suzana Grubnic, Ian Thomson and Georgios Georgakopolous; and another on ‘Accounting reforms in Latin America’ guest edited by Mauricio Gomez Villegas and Andreas Bergmann; as well as a mini-theme on ‘Public sector accounting and fiscal responsibility: learning lessons, current challenges and future opportunities’ guest edited by Vesna Vasicek and Nives Botica Redmayne (see p. 166).
In this sense, this issue is contributing to both the financial and the non-financial debate.
Additional information
Notes on contributors
Andreas Bergmann
Andreas Bergmann is Professor of Public Finance, Zurich University of Applied Sciences, Winterthur, Switzerland.