The Impact of Management Accounting Information on Resource Allocation Decisions in Government Social Expenditure Programmes: Evidence from Baghdad, Iraq

Abstract

Government social spending programmes require an efficient allocation of scarce public resources for achieving objectives in health, education, social protection, housing, employment and poverty reduction. However, fragmented accounting reports, delays in information, weak linkages between budgets and programme performance, and limited use of cost and outcome indicators often undermine resource allocation decisions. The objective of this study was to examine the effect of management accounting information on the quality of resource allocation decisions in government social expenditure programmes in Baghdad, Iraq and to determine the relative effect of information relevance, accuracy, timeliness, comprehensiveness, accessibility, and cost and performance information use. It was a quantitative, explanatory and cross-sectional design. The data were collected by means of a structured questionnaire administered to officials involved in accounting, budgeting, planning, auditing, programme administration and resource allocation. We distributed 300 questionnaires and analysed 230 valid responses using descriptive statistics, hierarchical regression and partial least squares structural equation modelling. The results showed that management accounting information had a strong and positive effect on the quality of resource allocation decision (β = 0.692, p < 0.001) and accounted for 52.7% of the variance. The model of dimensions explained 61.4 % of variance. Use of cost and performance information had the biggest impact, followed by relevance and comprehensiveness. All studied dimensions showed statistically significant positive effects, with timeliness as the most needed area for institutional improvement.