Chapter 2 enrironmental influence on accounting development

Types of economic systems

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Types of economic systems

Gastil makes a distinction among the following four economic systems: capitalist, capitalist-statist, capitalist-socialist, and socialist. Capitalist states are those states that ‘”rely on the operation of the market and on private provision for individual welfare.” Capitalist-statist states are those states that have “very large government productive enterprises, either because of an elitist development philosophy of a major dependence on a key resource such as oil.” Capitalist-socialist states are those states that “provide social services on a large scale through government or other nonprofit institutions, with the result that private control over property is sacrificed to egalitarian purposes.” Finally, socialist states are those states that “strive programmatically to place an entire national economy under direct or indirect control” (Belkaoui, 1985:44).

It was conceived that a capitalist system might be more favorable to accounting development than other economic systems may be:

In a capitalist economic system the survival of private enterprises depends on not only the production of goods and services but adequate information to various interest groups from investors and creditors to the capital market in general (Belkaoui, 1985:46).

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