939 Scott 2005 p 460 defines institutional theory as follows It considers the

939 scott 2005 p 460 defines institutional theory as

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interact and affect society (Hall and Taylor 1996, p. 939). Scott (2005, p. 460) defines institutional theory as follows: “It considers the processes by wh ich structures, including schemes, rules, norms, and routines, become established as authoritative guidelines for social behaviour.”
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55 Different forms of institutional theory identify and explain institutions differently. Originally, social scientists considered formal institutions of the government and the states, such as organisations and regulations (Weber 1920-1921). 17 . New institutional theory has influenced a variety of research areas. In organisational studies, for example, research based on new institutional theory attempts to explain the emergence and survival of institutions on an organisational level. In contrast, institutional considerations in the area of public policy focus on the governmental level, attributing more emphasis to politics and the public and the role of existing structures and institutions. There are overlaps, for example, where large international organisations are considered. For the purpose of this thesis, the constructs considered in more detail are from the realm of public policy, because public sector accounting agenda and standard setting can viewed as a public policy process. Public policy has been defined as “an officia lly expressed intention backed by a sanction which can be a reward or a punishment [...in the form of a] law, a rule a statute, an edict, a regulation or an order” (Lowi and Ginsberg 1996, p. 607). In Australia accounting standards have the force of law. 18 Whilst the likening of accounting agenda and standard setting in Australia to public policy processes is appropriate for both private and public sector accounting standard setting, it is particularly suitable for Australian public sector accounting standard setting processes. This is due to the similarities with the conventional context of public policy setting which is the proximity and direct involvement of the government and its policy and political actors. 17 For reviews of early institutional theory, see Bill and Hardgrave (1981), Hodgons (1994) or Scott (2001). 18 It is important to note that each Commonwealth, State and Territory has the authority to decide whether they adopt the respective accounting standards.
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56 New institutionalism in political and public policy science has been differentiated into three traditional forms. They are rational choice institutionalism (RI), historical institutionalism (HI) and sociological institutionalism (SI) (Busch, Lasarzik and Heiling 2009; Hall and Taylor 1996). This categorisation can also be applied to public policy theories, as they evolved from institutional theory. In accordance with the research question, only theories that include the agenda setting stage of the policy process are considered. Agenda setting is the initial stage of public policy and has been described as “the process by which problems and alternative solutions gain or lose public and elite attention” (Birkland 2005, p. 109). The focus of public policy agenda frameworks is on how choices are made and what causes change or continuity.
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