Abstract
This chapter discusses challenges of managing the financial sustainability of government pension schemes under an intertemporal paradox dominated by a short-term cognitive frame. We rely on organizational and paradox theory to suggest that the emergence of forward sensemaking depends on the dominant set of frames operating in the public financial management system. Furthermore, tensions from this intertemporal paradox require approaches to accommodate diverse stakeholders’ interests. We analyze the setting of the Brazilian government pension schemes for public sector employees, wherein financial sustainability is under intense debate but is constrained by a short-term budgetary logic. We observed relevant stakeholders’ responses to accommodate the paradox segregating the effects of the accounting framework from the budgetary dynamics. A practical implication is a necessity of accounting and fiscal authorities to be aware of imminent frictions among financial reporting, budgetary dynamics, and fiscal thresholds to accommodate the tensions among different stakeholders in different contexts.
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Notes
- 1.
OECD Policy Memo: Pension Reform in Brazil, April 2017. https://www.oecd.org/brazil/reforming-brazil-pension-system-april-2017-oecd-policy-memo.pdf
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Aquino, A.C.B., Cardoso, R.L. (2019). Accounting Framework (Re)Interpretation to Accommodate Tensions from Financial Sustainability Competing Concepts. In: Caruana, J., Brusca, I., Caperchione, E., Cohen, S., Manes Rossi, F. (eds) Financial Sustainability of Public Sector Entities. Public Sector Financial Management. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-06037-4_5
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