Corporatism, liberalism and the accounting profession in Portugal since 1755

Accounting Historians Journal, The, Jun 2003 by Rodrigues, Lucia Lima, Gomes, Delfina, Craig, Russell

Abstract: This paper introduces some significant developments in the history of the Portuguese accounting profession. It does so with a view Io providing a facilitative foundation of knowledge upon which further analysis and critique can be undertaken. Five developmental periods since 1755 are identified: (i) Corporatist Absolute Monarchy (1755-1820) (ii) Liberal Monarchy (1820-1890) (iii) Waning Liberalism and Rising Corporatism (1891-1926) (iv) Corporatist Dictatorship (1926-1974) and (v) Emerging Liberal Democracy and Neocorporatism (1974 until the present). The accounting profession's chequered history is analysed through episodes of regulation and deregulation. These episodes are associated with Portugal's pervading social, economic and political context and are dichotomised broadly as either "corporatist" or "liberal". Relationships between episodes of regulation and periods of "corporatism" are highlighted, together with associations between episodes of de-regulation and periods of "liberalism". A better understanding emerges of factors instrumental in the emergence of a well respected and rapidly growing accounting profession in Portugal.

Submitted September 2002

Revised January 2003

Accepted February 2003

INTRODUCTION

For much of the period from about the 15th century to the first half of the 17th century, Portugal was one of the world's great colonial powers and the home of some great merchants and traders. In recent centuries, Portugal has been overshadowed by Spain, France, Holland and Britain, and it has languished in terms of economic influence and cultural development. But now, with the support of European Union [EU] initiatives, and prudent national economic management, it is developing at a rapid rate. An instrumental part of the force currently propelling Portugal has been an accounting profession1 that has developed considerably in status and performance, particularly in recent decades.

Despite the increasing importance of accountants in the commercial infrastructure of Portugal, there has been little documentation of how the vocation of accounting has evolved and matured, and about the significant formative influences involved. This paper aims to fill that void (and provide an expose that is intrinsically interesting from an accounting history perspective) by reviewing the regulatory development of the vocation of "accountant" in Portugal over the past two and a half centuries. It is a response, in part, to calls by Carmona and Zan [2002, pp. 291, 300] to "map" a broader "variety in the history of accounting . . . by expanding the dimensions of time [beyond the current emphasis on 1850-1940] and space [to include Africa, Continental Europe, Islam, Latin America]". We seek to provide a foundation upon which further understandings will emerge of how and why the accounting profession evolved in Portugal; and, to a lesser extent, of how accounting knowledge was propagated in Portugal. In a sense, we are embarking on "a new voyage in search of the profession" [Walker, 1999, p. 1] with a view to providing part of the map of "the disparate socio-economic, legal and cultural landscapes through which accountants arrived at destination profession" [Walker, 2002, p. 377].

The reforms in 1755 of the Prime Minister, the Marquis of Pombal, are taken as an appropriate starting point for our analysis.2 We divide the period since 1755 into five significant developmental phases, based on the nature of the Portuguese state, its dominant ideologies and its approaches to decision making:

* Corporatist Absolute Monarchy (1755 to 1820)

* Liberal Monarchy (1820 to 1890)

* Waning Liberalism and Rising Corporatism (1890 to 1926)

* Corporatist Dictatorship (1926 to 1974) and,

* Emerging Liberal Democracy and Neo-Corporatism (1974 to present).

Our labeling should be non-controversial. The terms used to describe these periods are consistent with those adopted commonly by writers of Portuguese history [for example, Birmingham, 1993, Lloyd-Jones 1994a, 1994b, 1994c].3 A chronological overview, summarizing significant events in the development of accounting in Portugal is presented in Appendix 1.

Our analysis proceeds by broadly classifying the pervading mood of Portugal in the period under review as consistent, in varying degrees, with the principles of "corporatism" or "liberalism". But first, we wish to enter a caveat. Our "Corporatism/Liberalism" framework is not developed in exhaustive detail and requires further development. Nonetheless, it seems useful to introduce such a classificatory perspective. By doing so, we seek to demonstrate the insights that can be provided to the ebbs and flows and phases of development in the processes of professionalization of accounting over a 250 year period in Portugal. In settings classified as "corporatist", we do not analyze the complexity of arrangements and the dialogue that may have taken place between the state and bodies representing accountants. This would require in-depth analysis of archival sources - a task unmanageable in a single introductory contribution such as this, and one better suited to exploration in future research papers.