“Off balance sheet law”: globalisation, accounting and democracy

Abstract

National governments commonly facilitate neo‐liberal globalisation by permitting private bodies to apply global commercial rules locally. The recent legislating of international financial reporting standards (IFRSs) in New Zealand is an important example of privatised lawmaking. IFRSs can be described as “off balance sheet law” because they do not appear on the statute books, yet have legal effects. This article draws on a broad conception of discursive democracy to demonstrate the fundamentally antidemocratic nature of privatised lawmaking that the legislating of IFRSs exemplifies. First, an outline is given of the organisations and processes involved in the legislation of IFRSs in New Zealand to demonstrate how privatised lawmaking works. Second, the importance of IFRSs is considered in the light of basic principles of discursive democracy. Finally, alternatives to standardisation are considered.