Digitalization Sequencing for IPSAS-Oriented Public Sector Reform: Evidence from Southeast Europe

Abstract

Public accounting reforms toward accrual-based reporting and International Public Sector Accounting Standards (IPSAS) have advanced unevenly across the Balkans. Passing legislation and setting deadlines is not the same as building the systems, data structures, and professional skills reform requires, and this gap between formal adoption and working practice remains poorly understood. This study examines how digitalization relates to IPSAS implementation gaps across Southeast European countries: Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Montenegro, North Macedonia, Romania, Slovenia, and Serbia. Drawing on structured documentary coding and non-parametric statistical analysis, the study assesses country-level differences in reform maturity and digital capacity. While prior research has identified barriers to IPSAS and digital public financial management reform, little attention has gone to sequencing reform efforts by maturity, capacity, and country context. To close this gap, the study introduces the Digital-IPSAS Sequencing Maturity Model (DISM), which scores five dimensions - accounting framework, recognition and measurement, disclosure and reporting, technical systems, and human capacity - on a common five-point gap scale. Spearman’s rank correlation, Kendall’s tau, Mann - Whitney U tests, and hierarchical cluster analysis reveal a strong negative association between digital maturity and overall implementation gaps, alongside three distinct reform pathways and four digital priorities. DISM offers a practical framework for sequencing reform by institutional readiness rather than by calendar alone.