Accounting, the State and democracy: a long term perspective on the French experiment, 1716-1967

Accounting tools and procedures played a significant role in the development of the modern State, in the implementation of democracy and in its operation. This paper sets out to illustrate several aspects of this long term relationship by examining the French example. We firstly look at two fundamental improvements which occurred in the public sector accounting, in the early nineteenth century, i.e., the implementation of an efficient tax collecting system, replacing private tax-collecting agencies by a centralised bureaucratic administration, after several unsuccessful attempts during the eighteenth century, and the organisation of the parliamentary control on public expenditure through the adoption of budgetary rules and the definition of control mechanisms. With the Réglement général de la comptabilité publique of 1838, the design of the general framework of French public sector accounting was completed and was to last for over a century. The paper then examines the intervention of the State in the regulation of private sector accounting, in two phases. Only after World War I did State begin to intervene in private accounting practices, because of the creation of an income tax, defining a set of accounting rules with the aim of optimizing income tax performance. At a later date, by the end of the Interwar years, the growing interest for the ideas encompassing a co-ordinated economy and economic planning gradually shaped a further stage in accounting regulation with the adoption of a national accounting chart or the Plan comptable général of 1947. One of the main objectives was to obtain accounting data that were sufficiently homogeneous to be aggregated for the construction of national income statistics and the development of national accounting. These choices contributed to France's economic recovery after World War II. During these 250 years, accounting as a technology of power, knowledge and control, was enrolled in the service of strengthening the State in various respects, and became one of the governance tools of modern democracy This proactive policy contrasts sharply with the abandonment of sovereignty from the European countries regarding accounting regulation, in favour of a non-European private organisation, i.e. the IASB