Institutional isomorphism and cash management practices in Mississippi
Journal of Public Budgeting, Accounting & Financial Management
ISSN: 1096-3367
Article publication date: 3 September 2018
Abstract
Purpose
The purpose of this paper is to draw on the theory of institutional isomorphism to investigate how Mississippi’s centralized cash management policy affects the cash management practices in the state’s rural and urban counties.
Design/methodology/approach
The study uses a sequential exploratory mixed methods design involving a qualitative documentary analysis and a quantitative analysis of a survey of Mississippi counties.
Findings
The study finds that institutional isomorphism drives cash management practices in the counties by influencing how they follow state and agency mandates. Moreover, while urban counties have superior socio-economic indicators compared to their rural counterparts, no differences exist regarding standardized financial indicators, which suggest that local governments in the state may be imitating the practices of one another.
Practical implications
First, states should consider the different financial and economic conditions of their local governments when prescribing cash management policies because uniform policies could stifle local innovation and reduce efficiency in cash management. Second, when there is pressure from a higher-level government or a state agency, local governments may end up imitating one another rather than exploring opportunities for innovation within state policies. Third, state policies should consider requiring education and training in cash management practices that help identify strategies to add value to public funds within the scope of local fiscal capabilities.
Originality/value
The study uses one state to investigate a unique case of centralized cash management practices. The lessons learned can apply to other states seeking to develop a policy for their small local governments without placing the larger ones at a disadvantage.
Keywords
Acknowledgements
The authors would like to thank the Editor-In-Chief for his encouragement, the three anonymous reviewers for their insightful comments that improved the quality of the final manuscript and Dr Dallas Breen, Executive Director of Stennis Institute at Mississippi State University, for providing insights on local governments in the state. The authors also thank Brittany Gray, Mustapha Sen and Chris Bell for providing research assistance. The authors also appreciate scholars who provided valuable information on the survey instrument and the county officials in Mississippi who generously answered the authors’ questions and surveys. Anne Geyer kindly copyedited the manuscript, which improved accuracy and readability of the paper. As always, the usual disclaimer applies.
Citation
Nukpezah, J.A. and Abutabenjeh, S. (2018), "Institutional isomorphism and cash management practices in Mississippi", Journal of Public Budgeting, Accounting & Financial Management, Vol. 30 No. 3, pp. 315-334. https://doi.org/10.1108/JPBAFM-02-2018-0005
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited