Models of Performance-Measurement Use in Local Governments: Understanding Budgeting, Communication, and Lasting Effects

While attention has been paid to a few cities and counties exhibiting effective performance measurement systems, most U.S. local governments have been active in the development and use of performance measurement for several decades. This research examines the effects of performance-measurement information on budgetary decision making, communication, and other operations of U.S. local governments. Data are drawn from a national survey of city and county administrators and budgeters that included nearly 300 governments. Findings indicate the use of performance measurement by local departments is pervasive, although survey respondents are less enthusiastic about measurement effectiveness. Study results show subtle distinctions between city and county officials in their use of performance measurement for budgetary purposes and processes. Research findings indicate the consistent, active integration of measures throughout the budget process is important in determining real budget and communication effects in local governments.     

Appropriating Vs. Budgeting: A Comparison of Municipal Fiscal Processes

Conceptual and operational differences between the municipal fiscal processes of appropriating and budgeting are examined. Examination is within the framework of Illinois practice, in which some cities prepare an operating budget while others prepare only an appropriation ordinance. The author finds that there are indeed conceptual and operational differences; budgeting is conceptually a more formal and multi-dimensional process than appropriating, and such differences are reflected in the practices of Illinois cities. However, the operational differences are generally of small magnitude. The author recommends that initiation of a budget system be accompanied by programs for infusing fiscal decision making with new concepts and skills.     

Budgetary constraints and municipal revenue forecasting

Conclusion The objective of this research has been to determine whether key budget participants see forecasting as making significant contributions to the budgetary process. The issue is important for at least two reasons. Budgetary tools will be used to the degree budget players perceive them as providing net budgettary benefits. Moreover, the continuing trend toward technological sophistication gives governments opportunities, red herrings or not, to incorporate the technology into the budget process. The issue is also very timely; with the demise of packaged budget reforms but not the values of budget reforms, there may be new opportunities for improving budgeting on a less grandiose, more piecemeal basis, such as using forecasts to analyze budgetary options. The findings here provide some insight into two questions concerning governmental forecasting. First, why do governments use complex methods? In support of previous research, since cities most dependent on intergovernmental aid tend to use complex forecasting, such methods may indeed be seen as a way to help cope with fiscal stress. Also, reflecting the ambiguity of current research, since cities tend to use relatively simple techniques regardless of the revenue source being forecasted, the source is at best a partial determinant of complexity. The most important predictor of complexity, however, was budget format; cities that emphasize reform methods, especially planning, tend to use the most complex forecast methods. The forecasting process was not as important as expected.Second, so what? Does forecasting influence budgetary choices? The evidence from the second part of the study suggest that it can, but within definable limits. Budget directors are more likely than councils to value outyear estimates, but both actors are much less likely to value long-term estimates. The survey results also indicate that revenue forecasts are not as useful for making political decisions as for making management decisions: the forecast is usually used as an internal document, is only sometimes intended to affect council decisions, and is not usually included in the budget. In short, the forecast may be most useful for making managerial decisions since that is what most cities want out of it. It also tends to be more useful if the budget format is less traditional. Finally, the findings indicate that forecasting may be more useful to management to the degree the council finds it politically useful. This is extremely important since it suggests that as powerful as technology may be, budgetary tools that do not meet political needs will be managerially confined.Clearly, more research is needed in this area. Does forecasting actually shape long-range plans? In the long run, will the forecasting effort change the ways cities budget? Can the availability of forecasting information strengthen one actor relative to another? These are important questions that need answering to clarify the impact of forecasting and other technologies on the budget process.     

Management Strategies and Budgetary Politics

The study of public sector budgeting, particularly at the state level, has been dominated by incremental models of decision making. As a result, the budget has not always been viewed as an effective management tool for governors and other senior state officials. However, there are several critical issues which state leaders repeatedly face and for which the budget is the principal instrument for implementing decisions. This article identifies four key issues for the strategic management of state government and relates alternative approaches to each issue to the nature of budgetary politics. The first section raises the issues in the form of four questions. The next sections present alternative answers and discuss their political implications. Where appropriate, examples from the state of New York are included.     

Budgeting for Contracting in Local Government

While the amount of contracting out seems to be leveling off, the number of larger, long‐term contracts seems to be increasing. Such contracts are generally not well described in local budgets. Recent efforts in some cities to shift to more outcome‐oriented performance budgeting should push toward more clarity in reporting on major contracts in the budget. This article examines how a handful of major cities handle contracts in their budgets—in some cities contracts are omitted from the budget or all merged into one budget line—and makes some suggestions for improvements.     

The Impact of Objective and Empathic Dispositions on Local Government Budget Analysts' Spending Preferences

The spending preferences of local government budget analysts are based on individual decision modes; how individuals attend to, encode, and process information. While academicians and practitioners tend to assume that a budget analyst's disposition to act leads to specific spending preferences, that assumption is rarely tested empirically. This study draws on two theoretical constructs derived from social psychology, rationality (objectivism), and emotions (empathy). Leary and his colleagues demonstrate that objectivism predisposes one toward rational decision making in a variety of settings, while Eisenberg and her colleagues show that highly empathic individuals are predisposed toward helping and prosocial behavior. Results of this study suggests that empathic budget analysts, those scoring higher on the empathy scale, have distinctly different spending preferences than those budget analysts scoring higher on the objectivism scale; empathic budget analysts are disposed toward humanitarian criteria in decision making while objective budget analysts are disposed toward quantifiable cost-benefit considerations.     

Local policy networks in France and Britain: Policy co‐ordination in fragmented political Sub‐Systems

This article applies the concept of local policy networks to understand the emergence of local governance in France and Britain. Although the concept of policy networks needs to be used with caution, it is a useful way of mapping out the complex interdependencies of local decision makers in both states. Traditional approaches to central‐local politics in Britain and France emphasised the contrasts between the two countries, and while these continue, Cole and John argue that recent institutional and policy changes suggest a convergence to a more complex institutional environment and more decision making based on networks between organisations.     

BUDGETING IN A TIME OF AUSTERITY: THE CASE OF THE ESTONIAN CENTRAL GOVERNMENT

Resulting from the global economic crisis, high budget deficits and debt burden characterise many economies looking for an exit strategy from current fiscal unbalances. The government of Estonia, having pursued a conservative fiscal policy for over a decade, reacted to the economic recession with radical budget adjustments, the latter constituting approximately 9% of gross domestic product in 2009. Consequently, Estonia took its chance and qualified for the euro in 2011. This study examines the behaviour of the Estonian central government and the basis of its budget decisions when planning drastic cost reductions through the theoretical lens of cutback management. The foremost results reveal that the crisis pushed the government to establish a different institutional framework that facilitated fast and effective decision‐making during the budget process. The savings proposals came from the Ministry of Finance; however, running a cash‐basis line‐item budgeting system in practice, the centre possessed only limited performance data for developing the proposals. Consequently, the long‐term impacts of the budget adjustments had not been assessed and are as yet unknown. A further conclusion is that the current budgeting framework should be revised and replaced step by step with a more advanced approach. Copyright © 2012 John Wiley & Sons, Ltd.     

How the spending patterns of cities change: Budgetary incrementalism reexamined

Do city governments generally behave in keeping with the assumptions underlying the incremental model when they allocate their resources among competing activities? That is to say, do they try to maintain everyone's historical “fair share” of the budget in order to minimize disputes among rival participants in the decision process? Earlier studies have lacked sufficient data to address this question. However, with data from 105 West German cities, the present study is able to provide an answer. The resource allocation behavior of many of those cities seems to conform with the incremental model's assumptions. Yet for other cities, major changes in expenditure patterns from one year to the next are common. The differences in the variability of expenditure patterns across the cities studied are far from random. They are systematically associated with certain characteristics of the municipal environment. These associations, in turn, offer plausible hints about the process that leads to change in cities' spending patterns.     

Enhancing the Legitimacy of Local Government Pandemic Influenza Planning through Transparency and Public Engagement

Ethical issues in an influenza pandemic often require local government officials to make unprecedented, complex decisions. Effective planning with significant input from key community stakeholders is required well ahead of time in order to anticipate and mitigate a serious health crisis. The author evaluates the pandemic plans of 28 large cities across the United States using criteria derived from guidelines issued by the U.S. Department of Health and Human Services. The analysis reveals that planning legitimacy can be enhanced by wider transparency and civic engagement, greater opportunities for the inclusion of all stakeholders in decision making, mock community‐wide exercises and drills, as well as more public access to comprehensive emergency planning information.     

Managing the development process: Community strategies in economic revitalization

This paper considers community strategies in economic revitalization. Guidelines are proposed for local economic development practitioners and as a framework for further research. Findings are based on extensive analysis and comparative study of economic development efforts in four medium-sized industrialized cities in the northeastern United States. The role of motivating, organizing, and diagnostic agents, including crisis situations, community based planning, and local development agencies, are highlighted. The analysis presents economic revitalization as an on-going activity requiring strong local leadership, competent local development institutions, and broad-based public and private sector participation.     

The geography of metropolitan opportunity: A reconnaissance and conceptual framework

Abstract

We present a conceptual framework for metropolitan opportunity and a model of individual decision making about issues affecting youth's future socioeco‐nomic status. Decision making and its geographic context have objective and subjective aspects. Objective spatial variations occur in the metropolitan opportunity structure—social systems, markets, and institutions that aid upward mobility. Decisions are based on the decision‐maker's values, aspirations, preferences, and subjective perceptions of possible outcomes, which are all shaped by the local social network (e.g., kin, neighbors, and friends).

We also review the psychological literature on decision making. We hypothesize that the decision‐making method varies with the range of opportunities considered: Those with fewer options adopt a less considered method wherein mistakes and short‐term focus are more likely. Our review also finds empirical evidence that the local social network has an important effect on youth's decisions regarding education, fertility, work, and crime. Policy implications are discussed.     

City and County Budget Presentations in Texas: The Current State of the Art

This study looks at the budget preparation process by examining different experiences of Texas cities and counties. It begins with a review of concerns shared by many in budgeting. Then it outlines the Government Finance Officers' Association criteria used to examine the budgets. Finally, budgets from the different Texas government entities are examined and compared.     

Community participation and local government capacity in Vietnam: Conditions for coproduction

With Public Administration Reform in Vietnam comes more local government responsibility for policy making. Building on the results of a multiple case study research on housing and infrastructure upgrading projects in four cities of Vietnam, it has been confirmed that the community participation and local government capacity in urban housing and infrastructure upgrading projects are positively related. The level of community participation in urban housing and infrastructure upgrading projects is influenced by local government capacity, and in turn, it has effects on the outcomes. There are some important aspects for the enhancement of the level of community participation. These are effective leadership, the financial resources aspect, and communication/information exchange. Moreover, based on the patterns of community participation in urban upgrading projects, it has been found that participation is strongly supported by government actors in these four cases, and a process of coproduction between the local government and the affected communities has taken place.     

Public Management Decision Making: Effects of Decision Content

One obvious aspect of public management decisions and decision making has largely escaped attention—decision content. We examine the effects of decision content by asking the following questions for budget cutback and information technology decisions: How does content affect the time required for decision making? How does content affect who participates? How does content affect the decision criteria employed? How does content affect the information quality used in the decision-making process and red tape? The results suggest that information technology and budget cutback decisions differ in important ways. For information technology decisions, cost-effectiveness is not a significant criterion, average decision time is much longer, and decisions are generally viewed as permanent and stable. For cutback decisions, cost-effectiveness is a significant criterion, decisions are made much more quickly, and they are viewed as unstable and changeable. Surprisingly, decision content does not appear to affect the number of participants.     

MINOR LEAGUE BASEBALL: RISKS AND POTENTIAL BENEFITS FOR COMMUNITIES LARGE AND SMALL

Communities of all sizes are investing in minor league stadiums to attract or retain a minor league baseball team. The promise of economic development benefits is often put forward to justify these multimillion dollar investments. Local officials should be aware of the risks that accompany hosting professional sports teams and understand that minor league teams will not be economic growth engines. The decision to invest in a minor league stadium is a public policy decision and can be “worth it” if accompanied by a development logic. This article identifies three approaches that have been successful in making stadiums a community asset.     

Political accountability,fiscal conditions and local government performance—cross‐sectional evidence from Indonesia

Why are some local governments more successful than others in managing resources and delivering services? And even more vitally, how can malfunctioning governments be reformed so that they perform their responsibilities more effectively? This article contributes to our understanding of theses overarching questions by exploring the interactions between political institutions and public sector performance in the context of decentralisation and local governance. It shows–both theoretically and empirically–that performance outcomes are determined by the extent to which people can hold their governments accountable through political institutions. The basic hypothesis underlying this research is that political accountability, either by encouraging sanctions upon non‐compliant public agents or simply by reducing the informational gap regarding government activities, will create forceful incentives for elected officials and civil servants to reduce opportunistic behaviour and improve performance. Using a cross‐sectional regression the hypothesis is empirically tested against evidence from newly empowered local governments in Indonesia. The empirical findings broadly support our hypotheses. Improved public services on the ground, both in terms of quantity and quality, require informed and well functioning decision‐making processes that allocate resources to priority areas that meet the demand of the broader community. Copyright © 2008 John Wiley & Sons, Ltd.     

Citizen Involvement Efforts and Bureaucratic Responsiveness: Participatory Values, Stakeholder Pressures, and Administrative Practicality

This article addresses the efforts of local governments to involve citizens in administrative processes. In particular, we explore the following questions: What social and political groups in the community promote citizen involvement? Which groups awre likely to succeed? What barriers obstruct citizen involvement efforts? Do administrative attitudes make a difference in undertaking citizen involvement? Using survey data, this study tests a framework that assumes the decision to involve citizens in administrative processes reflects administrative responsiveness to salient community stakeholders, normative values associated with citizen involvement, and administrative practicality. The statistical results confirm the bureaucratic responsiveness framework and point to future directions for citizen involvement research and practice.     

Incrementalism in Appropriations: Small Aggregation,Big Changes

U.S. federal budget dynamics, as a major attribute of the legislative and bureaucratic decision‐making processes, increasingly calls into question the scholarly focus on incrementalism. What constitutes a “small” change is largely unspecified in previous research that has also been unable to assess incrementalism across multiple levels of aggregation. Using a unique budgetary database, this article analyzes whether budgetary changes are in fact “small” at different levels of aggregation. Surprisingly, a low proportion of changes are small by any logical standard. During most years, more than one‐fifth of budgetary changes are greater than 50 percent, and nearly half are more than 10 percent. The level of aggregation is also important for assessing whether political variables influence incrementalism. A salient finding: change in party control reflects greater influence within micro‐level budget decisions, while divided government manifests more impact on aggregate‐level budget decisions.     

Climate change adaptation in the Alpine Shire of Australia: a decision process appraisal

This study aims to integrate scientific knowledge from a variety of disciplines with local experience to describe, contextually and in detail, the impact of flood events on the community of the Alpine Shire and current mitigation efforts to alleviate and reduce these impacts. The Myrtleford Floodplain Management Study was the cornerstone of the strategy to address the goal of reducing flood damage in the community. It was found that the most consequential deficiencies in the Myrtleford flood mitigation scheme decision process are related to flaws in four elements of the process: the articulation of goals; the development of appropriate knowledge support; the effectiveness of promotion; and the ability to move from invocation to application. The Alpine Shire can be used as a microcosm that can represent adaptation challenges in other communities to climate change and extreme events. This research contributes to the development of the conceptual and analytical framework of integrated assessments, while making concrete contributions to the development of adaptive policies in Alpine Shire.