This paper mainly considers why the state sector organizations encounter informal political interference creating unfavourable governance conditions. This is an attempt to look at this problem from an accounting point of view focusing on budgeting and accountability inquiries. A qualitative research was conducted on the Sri Lanka Railways Department as a case study. Findings were analysed using Hegemonic analysis as the broader theoretical framework. Hegemonic analysis deals with how a state maintains its ruling with the consent of masses and public service as a result of the process. The paper concludes that current budgeting system in the state sector spawns contradictions.The budgeting practice encourages informal political interference. Accountability inquiries fail to contribute to arrest the situation but reinforce the practice.Therefore change of budgeting and accountability systems would be able to bring about a change to the prevailing governance problem in the state sector organizations in developing countries.
Sri Lankan Journal of Humanities and Social Sciences Vol.1(2) Oct 2009