Accounting Concepts and Economic Opportunities in a Tarascan Village: Emic and Etic Views

Abstract

One factor influencing business decisions in Cuanajo, Michoacán is the native system of accounts. While accounting systems influence many areas of business decision making, their impact can be most readily seen in analyzing business entry choices. The degree to which accounting systems influence perceptions of opportunities is demonstrated by comparing the local view of business possibilities derived from the native system of accounts (the "emic" view) with the very different picture we get utilizing conceptual tools from formal economics (the "etic" view). Contrasting these two outlooks allows us to see that the native accounting system gives a highly inaccurate view of opportunities. Evidence that the businessmen of Cuanajo are strongly influenced by the local system can be seen in the fact that individuals continually attempt to enter businesses which are "emically" good, but which, in reality, are saturated. It is not suggested that the native accounting system permanently blocks responsiveness to opportunities where they exist, but rather that it confuses the view of opportunities, leading to many poor business decisions.