Dunbar's number

Jun 02, 2020
Given the world’s fragmented approach to the COVID-19 crisis, Dr Brian Keegan considers the potential for lasting suspicion of international standards of all sorts – not least accounting.

There is a theory that suggests that 150 is the maximum number of people with whom any one individual can meaningfully interact. This number, known as Dunbar’s number after the anthropologist who came up with the idea, feeds into a myriad of management texts.

Working in Chartered Accountants Ireland, whose staff complement is close to 150, Dunbar’s idea feels right. There is a sense of community and shared purpose here which, if anything, has been highlighted by the coronavirus crisis. But just as there may be a ‘best’ maximum number of staff in an organisation or business division, is there a maximum population beyond which meaningful government responses to crises cannot be developed?

Big is not always best

The varying coronavirus experiences and responses of countries right across the world suggest that big may not be best unless the government is of a totalitarian hue, as in China. It is surely no coincidence that the most populous countries in Europe – Spain, Italy, France, and the UK – have suffered some of the worst impacts of coronavirus per head of population. Germany, of course, is somewhat of an outlier; but then again, when is it not?

The challenges of scale seem even more pronounced beyond national borders. Where the power of local or national government is subordinated to international organisations – or international treaties or federal systems, as in the case of the EU and the federal government in the US – official responses seem either inappropriate or inadequate.

A fragmented response

The EU’s approach to tackling the pandemic has been, to put it charitably, fragmented. The EU does not have a core role in health matters, but it does when it comes to financial supports. The Commission seemed slow out of the blocks in its initial response. Countries that usually see eye-to-eye on fiscal issues, such as Ireland and the Netherlands, found themselves at odds with each other over the issue of eurobonds to support bailouts for individual member nations.

The G7 group of the world’s wealthiest nations couldn’t even come up with a joint declaration on the pandemic in March, apparently because the US Secretary of State, Mike Pompeo, insisted on referring to the disease as the “Wuhan virus”. The US also very publicly pulled its support for the World Health Organisation (WHO), but perhaps more insidious than that were the suggestions that its Ethiopian chief executive was unduly influenced by Chinese investment in his home country. The seemingly unstoppable momentum for international corporation tax reform sponsored by the OECD has waned, with crucial decisions adjourned sine die by governments with more pressing matters on their agendas.

A newfound suspicion

If the authority of major agencies like the EU Commission, the OECD, the WHO and the G7 is being diluted, undermined or plain ignored as governments attempt to tackle the pandemic, it seems that global approaches aren’t entirely cutting it. An international reach used to be enough for these agencies to assert their authority, but not anymore.
That is not great news for a profession like accountancy, which prides itself on its global approach. One lasting legacy of the pandemic could be a suspicion of, and resistance to, efforts to establish international standards of all descriptions, accounting among them. Who will be trusted by governments to set and maintain the standards in accounting if countries can’t even agree on who should set the standards on issues like healthcare?

A new Dunbar’s number is becoming apparent for the number of countries that can act together in any kind of meaningful way when dealing with a crisis. That number is not higher than one.
Dr Brian Keegan is Director, Advocacy & Voice, at Chartered Accountants Ireland.