Accounting as a Technology of Government in the Portuguese Empire: The Development, Application and Enforcement of Accounting Rules During the Pombaline Era (1761–1777)

Abstract

This study of the interrelations of accounting and the State portrays accounting as a technology of government to effectively enact ‘practical action’ [Snook, S. A. (2000) Friendly Fire: The Accidental Shootdown of U.S. Black Hawks over Northern Iraq (Princeton, NJ: Princeton University Press)] at a distance in the Portuguese Empire. The study examines the development, application and enforcement of accounting rules under Portuguese imperialism in the ‘Pombaline Era’ during the period 1761–1777. These rules, comprising the ‘1761 Law’ and the later applicable accounting ‘Instructions’, were issued by the Royal Treasury, established in 1761, for application throughout the Portuguese Empire. Using the combination of Foucault's concept of governmentality and Snook's theory of ‘practical drift’, the study elucidates how the implementation and evaluation of accounting control systems permitted the Portuguese government to exercise control at a distance, thereby mobilising individuals to pursue its goals for the Empire. The measures taken to enforce conformity with the accounting rules are shown to have been targeted at deterring the phenomenon of practical drift and, therefore, were concerned with avoiding malfunctioning and potential chaos in colonial administration.

Acknowledgments

Earlier versions of this paper were presented at the sixth Accounting History International Conference, Wellington, New Zealand, August 2010, the 35th Economic & Business Historical Society Conference, Braga, Portugal, May 2010, the 12th World Congress of Accounting Historians, Istanbul, Turkey, July 2008, the 31st European Accounting Association Congress, Rotterdam, the Netherlands, April 2008, and at the Critical Perspectives on Accounting Conference, New York, USA, April 2008. The authors are grateful for the comments received from participants during these presentations. Appreciation is also expressed to Trevor Hopper, Massimo Sargiacomo and Brian West for their helpful comments on earlier drafts of the paper. This research is financed by Portuguese national funds through the FCT – Foundation for Science and Technology – by means of Project PEst-OE/EGE/UI4021/2011.

Archival Sources

Arquivo Histórico do Tribunal de Contas (AHTC) [National Audit Office Historical Archive]:

• AHTC, Erário Régio [Royal Treasury], Book 849, Court and Province of Estremadura.

• AHTC, Erário Régio [Royal Treasury], Book 3609, Madeira and Azores.

• AHTC, Erário Régio [Royal Treasury], Book 4024, India.

• AHTC, Erário Régio [Royal Treasury], Book 4040, Mozambique.

• AHTC, Erário Régio [Royal Treasury], Book 4055, Rio de Janeiro.

• AHTC, Erário Régio [Royal Treasury], Book 4061, S. Paulo.

• AHTC, Erário Régio [Royal Treasury], Book 4070 and Book 4072, Minas Gerais.

• AHTC, Erário Régio [Royal Treasury], Book 4193, Angola.

• AHTC, Erário Régio [Royal Treasury], Book 4218 and Book 4223, Bahia.

• AHTC, Erário Régio [Royal Treasury], Book 4233, Pernambuco.

• AHTC, Erário Régio [Royal Treasury], Book 5322, S. Tome.

Notes

1 The four General Control Offices were named as follows: (1) General Control Office of the Court and Province of Estremadura, (2) General Control Office of Continent and Islands of Madeira and Azores, (3) General Control Office of West Africa, Maranhão and Baia and (4) General Control Office of East Africa, Rio de Janeiro and Asia.

2 Snook (2000, pp. 179–201) constructed a ‘theoretical matrix’ in portraying dynamic representations of ‘organizational reality’ (p. 220) and specifically labelled the perspective developed as a theory, known as the theory of practical drift. In this study, therefore, the perspective is described as a theory.

3 Richardson (2009) explored a different aspect of governmentality, beyond the discursive aspect of the term, and highlights the fact that governmentality can be expressed through networks of organisations. McKinlay et al. (2010) addressed how governmentality might be developed to study strategy (see also McKinlay and Pezet, 2010).

4 For a broader understanding of Foucault's concept of governmentality in accounting refer to McKinlay et al. (2010) and McKinlay and Pezet (2010). McKinlay and Pezet (2010) examined the seminal contribution made by Peter Miller, Ted O'Leary and Nikolas Rose, who are described as the ‘London Governmentalists’.

5 Snook (2000) developed his perspective to assist in explaining the accidental shooting down of two U.S. Black Hawks over Northern Iraq in 1994, and the tragic death of 26 military personnel, by friendly fire.

6 As stated by Snook, ‘while action moved from quadrant 1 to 2 based on a change in situation – from design to implementation – movement from quadrant 2 to 3 is driven by a behaviorally anchored shift in logics of action – a phenomenon I call “practical drift”’ (2000, p. 192).

7 The companies created specifically for Brazilian colonial trade were the Company of Grão-Pará and Maranhão (1755) and the Company of Pernambuco and Paraiba (1759). Rodrigues et al. (2009) examined the governance regulations of the Company of Grão-Pará and Maranhão.

8 João Henriques de Souza was Clerk of the General Treasury since its establishment and became, in 1781, General Treasurer of the Royal Treasury (see Gomes et al., 2008, p. 1164). The undated manuscript by Souza appears to have been written in the post-Pombaline period between 1777 and 1781.

9 The Instructions were issued in the following places on the dates shown in brackets: Angola (1764), Bahia (1767), Rio de Janeiro (1767), India (1769), Pernambuco (1769), S. Tome (1770), Minas Gerais (1772) and S. Paulo (1775).

10 See, for example, AHTC, ER, Book, 4024, India, pp. 8–9; AHTC, ER, Book 5322, S. Tome, p. 13; Book 4055, Rio de Janeiro, pp. 27–28; Book, 4072, Minas Gerais, p. 110; Book 4061, S. Paulo, p. 94.

11 See, for example, AHTC, ER, Book 4055, Rio de Janeiro, p. 24; Book, 4072, Minas Gerais, p. 105; Book 4061, S. Paulo, p. 91; Book 4218, Bahia, p. 18.

12 See, for example, AHTC, ER, Book 4024, India, p. 7; Book 4055, Rio de Janeiro, p. 26; Book, 4072, Minas Gerais, p. 108; Book 4061, S. Paulo, p. 94; Book 4218, Bahia, p. 25.

13 It was explained that there should be a complete discrimination of all the amounts paid and the identification of the person(s) to whom the amounts were paid. Each item of expenditure was to be independently written, and not inserted in an aggregated value. Another issue identified was the necessity to justify some expenses made and reported to the Royal Treasury.

14 For Pernambuco, the Instructions stated it was decided ‘to establish immediately one Collection House for the administration and collection of My Royal Properties’ in order ‘to avoid the undesirable consequences that arise from the erroneous form of the administration and collection of My Royal Properties practiced until now in that captaincy’ (AHTC, ER, Book 4233, Pernambuco, pp. 89–90).

15 Companhia Geral de Pernambuco e Paraíba [Company of Pernambuco and Paraiba].