Government accounting, crisis, reforms, and accountability, an institutional theory perspective: Evidence from Kuwait

Abstract

This study examines the rationale, management, and implications of accrual accounting reform in Kuwait’s public sector, focusing on how international standards, particularly International Public Sector Accounting Standards (IPSAS), are adopted and experienced in a resource-rich, non-crisis environment. While much of the public sector accounting literature centres on reforms driven by external pressure or fiscal crises, this research explores how reforms develop in politically stable contexts where coercive forces are weak, but legitimacy pressures are strong. Drawing on institutional theory, the study explores three interconnected research questions: 1. What is the rationale for the transition from cash to accrual accounting in Kuwait’s public sector? 2. How has the Ministry of Finance (MoF) managed and responded to the accounting reform process? 3. What have been the effects of this accounting reform? Using a qualitative method, the research combines analysis of archival documents (1978–2022) with 25 semi-structured interviews involving senior officials, accountants, and MoF staff. The findings reveal that the reform was largely driven by mimetic and normative isomorphism, aimed at aligning with international practices and signalling modernisation, rather than an internal fiscal crisis. Implementation was fragmented, procedural, and centralised, with limited legal reform, cross-entity coordination, and behavioural integration. While technical systems such as the Government Financial Management Information System (GFMIS) were implemented, accrual accounting remained symbolically adopted and decoupled from core accounting practices. The study contributes to institutional theory by demonstrating how symbolic compliance, institutional inertia, and logics of legitimacy shape reform in high-capacity, non-crisis states. It provides practical lessons for policymakers and those seeking to embed accounting reforms in similar contexts, emphasising the need for legal alignment, professional engagement, and local continuity, underscoring the complex institutional dynamics of public sector reform beyond crisis-driven models.