The impact of International Public Sector Accounting Standards on economic policy uncertainty

ABSTRACT

This article examines whether and how the implementation of International Public Sector Accounting Standards (IPSAS) affects economic policy uncertainty. The authors explore how political stability, regulatory quality, government effectiveness, and a country’s level of development moderate the relationship between IPSAS and economic policy uncertainty. Using a sample of 22 countries for the period 2014–2020, findings reveal that the implementation of IPSAS reduces economic policy uncertainty. Importantly, the authors show that the economic impacts of IPSAS are greater in countries that do not have robust mechanisms to support transparency and accountability.

IMPACT

Steps taken by countries to adopt International Public Sector Accounting Standards (IPSAS) have resulted in diverse academic and professional debates on whether or not IPSAS implementation has positive effects. This article contributes to the cost-benefit analysis of IPSAS implementation by documenting the relationship between IPSAS and economic policy uncertainty. The authors show how this relationship is moderated by political stability, regulatory quality, government effectiveness, and a country’s level of development.

KEYWORDS:

• Accountability
• economy
• economic policy uncertainty (EPU)
• government
• IPSAS
• public sector
• uncertainty
• transparency

Disclosure statement

No potential conflict of interest was reported by the author(s).