محاسبه برای خصوصی سازی در بنگلادش: ادعاهای آزمایشی بانک جهانی

The World Bank and the IMF have encouraged many less developed countries (LDCs) to pursue privatisation policies. Development economists and World Bank reports claim this facilitates development by improving controls within enterprises and external regulation of financial markets acting on external accounting reports. This paper questions these beliefs. It compares the post-privatisation performance of companies in Bangladesh examined in a World Bank report with the authors’ own research on the same companies. The World Bank report reported that the success of the privatisations established the case for more. In the research reported here, only one of the privatised companies was judged a commercial success, though the unavailability and dubious accuracy of accounting reports prevented any definitive assessment. Above all, the paper questions the narrow criteria adopted by the World Bank report—namely profitability—and the neglect of employment conditions, trade union and individual rights; social returns; and financial transparency and accountability to external constituents. Our evidence suggested that privatisation has not increased returns to society: privatised companies’ contributions to state revenue declined in real terms and as a proportion of value added. Transparent external reports failed to materialise as required by law and there was evidence of untoward transactions affecting minority shareholders, creditors, and tax collecting institutions. Internal controls may have become more commercial but at the cost of declining employment, wages, quality of working life, and employee rights. The World Bank claims rest upon efficiency benefits trickling down to all but the effects of privatisation may have been a redistribution of power and wealth to the new owners. This paper argues that the IMF, the World Bank, and Western capitalist states have not provided the technical infrastructure and organisational capacity to execute their neo-liberal privatisation agenda, which rests on dubious socio-economic assumptions. Our unfavourable evaluation of privatisation in Bangladesh is not unique. It has been happening again and again around the world.

The World Bank and the IMF have encouraged many less developed countries (LDCs) to pursue privatisation policies (Cook, 1986, Cook & Kirkpatrick, 1995 and Craig, 2000). It is difficult for many LDCs to resist (Cook, 1986, p. 24). To do otherwise might debar them from crucial concessionary finance from the World Bank, IMF, and northern aid donors (Craig, 2000). Some governments of LDCs have adopted privatisation programmes of their own volition but others have grudgingly done so under pressure from governments of industrialised countries acting through international agencies. Privatisation is usually a component of structural adjustment programmes based on notions of economic liberalisation, free trade, competition, privatisation, and limited government intervention (Cook, 1986, p. 18). The argument is that better resource allocation will emerge from institutional reforms including: greater market pricing; removing restrictions or quotas for imports; promoting the private sector; curtailing government activities through divesture or closure of state enterprises; and contracting out government functions to the private sector (Toye, 1994). The premise is that private, rather than public ownership, produces more efficient enterprises with benefits for consumers, employers, industry, and the nation (Adam et al., 1992; Hanke, 1986, Rees, 1984, Furubotn & Pejovich, 1972 and Donald & Hutton, 1998, p. 460; Flemming & Mayer, 1997, p. 4; Goodman & Loveman, 1991, p. 26; Ogden, 1995 and Ogden, 1997; Shaoul, 1997). Crucially (but too often neglected) privatisation policies presume the improved accounting that underpins their prescriptions will materialise. This paper questions these beliefs. Its comparison of the post-privatisation performance of Bangladesh companies examined in a World Bank report1 with the authors’ research on the same companies raises issues about the accuracy of the World Bank report, its policy prescriptions, and its criteria of effectiveness. World Bank claims that privatisation brings more transparent accounting and improved economic performance appear dubious, along with presumptions that it facilitates development goals such as increased investment, GDP, productivity and employment. The paper initially describes the events in Bangladesh leading up to privatisation policies. Then it examines the arguments for structural adjustment programmes—especially privatisation, how donor agencies help devise such programmes, and how they are underpinned by assumptions of accounting changes. After briefly delineating the research methods, the paper compares and contrasts the researchers’ findings with those in the World Bank report. The first part examines changes in accounting practices and economic performance revealed in an intensive case study of a soap firm (hereafter anonymised as PC). The second part examines the same issues in the other privatised firms in the World Bank report. The paper concludes by reflecting on why the two sets of research diverge, and policy implications, not least regarding accounting.

This paper has questioned World Bank claims that privatisation improves management controls, commercial performance, and development, and it has cast doubt on the World Bank’s own assessment of a set of privatisations. Whilst the authors do not deny the need to reform Bangladesh SOEs, major shortcomings of the denationalisation process are raised. Even on the World Bank’s narrow criteria of profitability, the performance of privatised firms was disappointing. However, above all, the paper questions the World Bank’s focus on profitability to the neglect of employment conditions, including trade union and individual rights; social returns; and financial transparency and accountability to external constituents. Development aims should extend beyond commercial criteria to issues such as poverty alleviation, narrowing income inequalities, and the quality of work experience. Sadly, according to the analysis above, the privatisations under scrutiny also appeared to be a relative failure viewed against these broader criteria. Accounting researchers should be suspicious of mono-variable linear explanations of control problems based on types of ownership (i.e. public or private) and instead seek explanations incorporating the complex factors that surround firms and society, and forms of economic regulation. For example, the type of private ownership following privatisation can be crucial for its outcome (Scott, 1985 and Espeland & Hirsch, 1990) and the nature of accounting (Ansari & Bell, 1991 and Uddin, 1997). Bangladesh has a small capitalist class concentrated in small, family-owned merchant businesses rather than manufacturing that relies on personal transacting, is risk-averse, and is under-capitalised. This frustrates the rapid development of the form of market capitalism sought by external aid agencies and hasty reform has unanticipated and undesirable effects. When such a small capitalist class transacts with unaccountable politicians operating in a weak state with poor financial regulation and legal enforcement, and weak capital markets, it is a breeding ground for crony capitalism associated with familial transacting, patronage, and irregular financial practices. This produces non-transparent placements of public assets into private hands at prices unrelated to valuations, financed by state institutions with little expectation of repayment. It is little wonder that transparent external reporting fails to occur, even at the levels required by legislation. Within the enterprise this tends to produce harsh internal controls rather than the systems of large, institutionally owned and professionally managed global companies. As the World Bank Vice-President of South Asia, Mr Nishimizu admitted, “Corruption and poor governance stood in the way of a much faster growth and poverty reduction, corroding the nation’s economy, finances, and institutions. … Too many, even in the private sector, continued to abuse the public’s trust—giving the sector a bad name and prompting a negative connotation of the word “privatisation” (The Daily Star, 14 March 2002). In Bangladesh, the problems of SOEs mostly emanated from political intervention and patronage made possible by the low democratic accountability of politicians and pervasive corruption. Political and bureaucratic interests recognise the threats to their power and patronage posed by privatisation (Cook, 1986, Cook & Kirkpatrick, 1988 and Cook & Minogue, 1990). Some may resist changes but, given the external pressure, most see this as spitting in the wind. Instead they are subtle and try to reassert their influence by different means such as regulatory capture, or by furthering their own interests in the privatisation process. The essential point is that changing ownership without first strengthening accountability and governance, and legal and regulatory enforcement, and protecting constituencies other than capital, merely resurrects the very practices it aimed to abolish, albeit it in a new guise. It is unwise to assume that efficient forms of accounting will automatically flow from policies increasing the role of the private sector. Accounting is socially and politically determined, and cannot be left to markets, being an important pre-condition for market functioning. Thus, accounting reform is a crucial but neglected component of effective development policy. When neglected the result is perverse and ineffective reforms as noted in the above cases of privatisation. Underlying this above is a more fundamental debate about the effectiveness of structural adjustment programmes in LDCs. In contrast to the optimistic claims of neo-classical development economists and proponents of market-based reforms, more radical political economists argue that they mark further subjugation of LDCs. For example, Burawoy (1985) argues that in LDCs “pressures from agents of international capital for market reforms, cause hegemonic regimes [based on state central planning and state ownership of major commercial companies] to decline. Instead economically peripheral states often turn to programmes of economic liberalisation based on export processing zones, privatisation, and touting the attractions of cheap, economically weak, unprotected labour to foreign capital”. Burawoy, 1979 and Burawoy, 1985 argues that this brings new despotic regimes of control in LDCs based “not merely on the subjection of workers but on the mobility of capital … workers must accede to coercive and unilateral management control under the threat of the relocation of capital. This is especially acute in LDCs given the poverty of their states and populace”. Similarly, Martin (1995) argues that privatisation in South Africa is unlikely to bring “black economic empowerment” and it guarantees little except that a few people get very rich, or ‘economically empowered’ (Catchpowle & Cooper, 1999, p. 741). This paper gives support to such concerns. The suspicion is that privatisation in Bangladesh may have redistributed power and wealth to some of the new owners, as in other countries (be they developed or less developed) (Shaoul, 1997 and Martin, 1995). The paper provides support to critics of structural adjustment policies in LDCs who allege that they lead to crony capitalism and despotic control regimes for workers (Burawoy, 1985, Burawoy, 1979 and Uddin & Hopper, 2001). Above all it shows how the IMF, World Bank and richer capitalist states have provided the technical infrastructure and organisational capacity to execute a neo-liberal privatisation agenda with insufficient regard for regulatory issues and protection of employees (Catchpowle & Cooper, 1999 and Martin, 1995). The obsession with market relations has led to progress being assessed through narrow indicators such as growth of GNP rather than other worthy development goals11. Also there has been insufficient regard for how contextual factors may affect market solutions in Bangladesh. Poverty, unequal income distribution, low purchasing capacity, unemployment, political instability, and the consequences of colonialism, all impact upon privatised companies leading to questionable valuations, placements to familial or political colleagues, harsh regimes of control, weak financial regulation and accountability, and financial malpractice (Uddin & Hopper, 2001 and Wickramasinghe, 1996). These cases of privatisation in Bangladesh are not unique. It is happening again and again around the World.