On the pricing and benefit structure of a private club or public utility

In this study the structure-induced equilibrium approach for modeling democratic institutions is extended to allow for the added structural features of executive veto and legislative override. A multidimensional model is presented for a budgetary process involving three actors — a legislature, an appropriations committee, and an executive. In order to focus attention on the role of the veto and override possibilities, simplifying assumptions are made with regard to other aspects of the agenda formation process. In particular, the committee has monopoly agenda power, a closed amendment control rule is operative, and perfect-foresight expectations are held by the committee and the executive. Given these assumptions, utility maximization by the several actors generates a budget outcome characterized as a structure-induced equilibrium. The general model is illustrated geometrically with a two-dimensional example, permitting budget outcomes to be analyzed for various combinations of veto rules and override provisions. The analysis demonstrates that budget outcomes are sensitive to alternative specifications of veto rules and override provisions. In the illustration, executive veto power is shown to vary directly with both the permissiveness of the veto rule and the stringency of the override provision. Similar relationships, however, are not found to exist for total budget expenditures.     

The first word and the last word in the budgetary process: A comparative institutional analysis of proposal and veto authorities

This study examines the role of proposal authority and executive veto in the budgetary process. A five stage sequential model of the budgetary process with three institutional actors — a legislature, an appropriations committee, and an executive — is presented. We examine: (i) the factors that affect the executive's power in shaping the final budget when the executive is granted proposal authority; (ii) how increased veto authority, in combination with executive proposal authority, affects the executive's power in forming the final budget; and (iii) the effects of different types of proposal authority and veto rules on the efficiency of the budgetary process.     

The Line‐Item Veto in Georgia: Fiscal Restraint or Inter‐Branch Politics?

This article about use of the line‐item veto in Georgia concludes that the item veto has been used not as an instrument for reducing the budget total or the size of state government, but as an instrument for protecting the executive budget. Using appropriations data and drawing upon interviews with participants in the budget process, including seven governors, the authors present evidence that in Georgia the item veto (1) is not frequently used, (2) when used, is more likely to remove legislative language than delete dollar amounts, and (3) enables the spending priorities and fiscal policy preferences of the governor to prevail as state policy.     

Gubernatorial Use of the Item Veto for Narrative Deletion

Legislative use of narrative, such as conditions and riders, in appropriations bills has become common and has had negative consequences for the executive budget and veto, as well as for the legislative process. Some governors have used the item veto as a remedy. While they have not necessarily diminished the amount of narrative, they have achieved some protection of the executive budget and veto power. Their success depends greatly on the type of legal authority embodied in this constitutional power.     

Committees and the core of the Constitution

An ongoing debate in the formal theory of legislatures involves the question of why these institutions (apparently) manifest so much stability. That is, why do the institutions not continually upset policies adopted only a short time before? A large number of answers have been advanced. This paper proposes that the stability derives from the interaction of two factors, (i) the fundamental constitutional rules (bicameralism, executive veto, and veto override) that structure the legislative process, and (ii) the committee systems endowed with veto powers that many American legislatures have developed. This interaction, we argue, can create a core — a set of undominated points — so large that even a substantial change in the legislature's members (reflecting electoral outcomes, for example) will be unlikely to shift its location enough for the status quo to be upset.     

Veto Rhetoric and Legislative Riders

Riders to appropriations bills have long been a favorite congressional instrument for forcing presidents to accept unwanted policies. To resist unwanted riders, presidents have increasingly resorted to veto threats. Are such threats credible, and do they influence legislation? To answer these questions, we analyze the legislative histories of hundreds of threatened and unthreatened riders from 1985 through 2008. We find that threats are effective in bringing the final legislation closer to the president's preferences. Threats achieve their success, in large part, by interrupting the textbook legislative process in the Senate—spawning filibusters, prompting leaders to punt bills to conference, and encouraging the use of other “unorthodox” procedures. Unlike conventional models that regard veto threats as minimally effective, the findings presented here depict veto rhetoric as integral to identifying critical riders separating the legislative parties that must be resolved in order to avoid gridlock and pass annual appropriations legislation.     

Spending Preferences of Public Sector Officials: Survey Evidence from Finland

We examine the determinants that shape the spending preferences of public sector officials on several budgetary appropriations. Following Niskanen's budget‐maximizing theory, we test whether these officials prefer larger budgetary appropriations rather than less. We measure their preferences to increase their own bureau's appropriations and compare those against their preferences for other bureaus' appropriations. The empirical evidence is gathered via a mail survey targeting high‐level officials from different ministries in Finland. The analysis of the responses suggests that Niskanen's theory is in part supported.     

Executive veto and spending limitation: Positive political economy with implications for institutional choice

The consequences of institutional change in the budgetary process are not generally determinate independent of the preferences of political actors. Nonetheless, this study shows for a general class of preference configurations that the legislative branch cannot be made better off by a spending limitation unless the executive is empowered with a line-item veto. In the absence of executive item-veto authority there is no incentive for the legislature to constrain spending.     

The place of political science in public choice

This study examines the effects of alternative executive veto structures in a model of the budgetary process. For the model examined it is shown that the outcome of the budgetary process must be contained in the Pareto set if the executive has either no veto authority or the authority to exercise an all-or-nothing veto. When the executive has item veto authority, however, the outcome need not be contained in the Pareto set.     

President Clinton's Fiscal 1998 Budget: Political and Constitutional Paths to Balance

This article examines President Clinton's FY 98 budget proposals and the political and economic factors that led to the balanced budget agreement. Also explored are the constitutional approaches to fiscal discipline: the balanced budget amendment, the tax supermajority amendment, and the line item veto that was used 80 times by President Clinton to delete over a billion dollars. The analysis reveals that budget bargaining was continuous before and after the budget agreement was reached, moving downward from decisions on macro-budgetary totals to micro-budgetary choices on tax cuts and appropriations. The study concludes that President Clinton was relatively successful in achieving budgetary goals under divided government, that the agreement was significant despite the economic growth that made it easier, and that constitutional remedies will continue to be important in the coming years.     

省会城市预算过程中党政首长的作用与影响——基于三个省会城市的研究

以我国三个省会城市为例来试图回答这样一个问题:在省会城市预算过程中,党政首长究竟发挥着怎样的作用,他们是如何影响着预算过程和预算改革的?研究发现,这三个省会城市预算改革后,预算权力结构并未从根本上改变.其核心仍然是市委书记和市长,他们仍然是地方预算过程中实际的财政资源申请的审批者或最终资源配置者.这主要体现在,预算改革后,市委领导下的"行政预算"体制的继续,市政府领导高层预算分配权力的相对集中,和市长对部门关系以及部门利益的决定性影响.研究还指出,要准确地表达地方党政首长在预算过程中的权力,需要将其放在一种"关系"的维度来具体化.此外,对预算环境的讨论也是必要的,尤其是政治环境,对于党政首长而言,预算过程中的不确定性通常都是和政治环境相联系的.     

The Bush Administration's Proposal for Credit Reform: Background, Analysis, and Policy Issues

Large recent and forecasted federal outlays to cover losses on deposit insurance and federally-assisted credit have increased concern in the executive and legislative branches about potential future liabilities of the federal government. These potential liabilities include federal credit; consequently, this renewed interest in federal credit reform. Credit reform would have to change the budgetary treatment of federal direct loans and federal guaranteed loans. Currently, the unified budget measures the cost of federal credit on a cash flow basis. Critics (including the Bush Administration) maintain that the appropriate budgetary measure of the costs of federal credit is the present value of the subsidies to credit recipients in the fiscal year that the credit is advanced. The Bush Administration's proposal for credit reform is presented in most detail in the Federal Credit Reform Act of 1989 (the Act), which was proposed but not enacted. The Act would have had federal officials estimate credit subsidies based on the equivalent interest rates in private credit markets. These subsidies would have been used to measure the budgetary cost of federal credit and would have required annual appropriations. Two credit revolving funds would have been established in the Treasury to finance credit flows. Many of these credit reform practices were included in the Omnibus Budget Reconciliation Act of 1990 though.     

Exploring Explanations of State Agency Budgets: Institutional Budget Actors or Exogenous Environment?

Budgetary incrementalism argues that three institutional actors—agencies, executive budget offices, and legislative committees—dominate budget outcomes. The complexity and interdependency of public programs expands this expectation to include the influence of exogenous budget factors. Findings from a survey of state agency heads reveal that budget environments do influence state agency budget outcomes. However, the institutional budgetary participants, especially governors and legislatures, envisioned in classical incrementalism retain their principal and primary influence on state agency budgets. A significant departure from classical incrementalism is that agencies are not as influential as previously depicted.     

Budgetary Decision Making by Executive and Legislative Budget Analysts: The Impact of Political Cues and Analytical Information

We explore the extent to which attributes of individual analysts and institutional factors lead to budgetary decisions based on political cues and/or analytical information among executive and legislative budget analysts. We surveyed executive and legislative budget analysts in 13 western states to ascertain the factors that influence their budgetary decisions. The findings build on evidence from previous studies that confirms the complexity of factors affecting budget analysts' decisions, and they provide empirical support to analysts' use of a combination of information labeled "budget rationality" by Thurmaier and Willoughby. Also, we provide more conclusive evidence that both executive and legislative analysts follow similar decision-making patterns.     

Nonpartisan Legislative Budget Offices: A Tentative Step toward Improving Legislative Oversight

Strengthening the budgetary powers of legislatures through nonpartisan budget offices adds to the capacity‐building repertoire of development donors. Budget offices are supposed to provide legislatures with information and analysis independent from the executive. The United States Agency for International Development believes that strengthening the legislature's power of the purse improves governance. We highlight USAID‐funded legislative strengthening projects implemented in Jordan, Kenya, Morocco, and Afghanistan to show how these budget offices function. There is a significant potential for these units to assist members of parliament in understanding the budget process, the broad fiscal challenges facing government, and expenditure control and budgetary trade‐offs that affect present and future spending. These cases demonstrate the challenges of creating and sustaining a parliamentary budget office. Finally, in an effort to make budget offices effective and sustainable, we outline several key steps that we believe are important both for donors and the legislative bodies.     

From analyst to negotiator: The OMB's new role

Dramatic changes in the executive and legislative budget processes over the last ten years have elevated the Office of Management and Budget (OMB) to a new position of power and importance. Within the executive branch the budget process has become more highly centralized in the president's office; and within the Congress a similar centralization has occurred. In both branches the OMB has become the key institution for coordinating the actions of the budget-making powers. At the same time, the much-discussed “iron triangles” explored by analysts of the budgetary system have lost much of their power to control the process. Although the OMB's active involvement in the congressional budget process diminished in 1983, the institutional relationships necessary for a more centralized budget process remain and can be reactivated to deal with the predicted enormous deficits.     

Executive veto power and credit claiming

The line-item veto has often be heralded as an effective tool in reducing pork barrel spending. A model of veto bargaining over public goods and pork barrel spending in the presence of credit claiming incentives demonstrates that the item veto does not necessarily reduce pork barrel spending and reduces the executive??s ability to attain his preferred level of spending on public goods. The item veto also has an ambiguous effect on the balance of power between the executive and the legislature while strengthening the position of the legislative agenda setter within the legislature.     

The Reiterative Nature of Budget Reform: Is There Anything New in Federal Budgeting?

This article will attempt to demonstrate the limitations of budget reforms to bring about fundamental change in budget outcomes. In an effort to determine the extent to which these reforms have had any lasting effect, the author first discusses the history of federal budgeting since the advent of the executive budget in 1921. Second, the author reviews three reforms that are prominent in the U.S. Congress current budget debate—enacting fixed budget targets, granting the president increased power in the budget process through enacting a line item veto, or implementing a performance-based budget. Lastly, the author will cite the limitations of each to bring about lasting changes in budget outcomes or decision processes.     

Recipes for Pork and Other Delicious Offerings for the New Administration

Is pork produced by feeble budgetary processes? By fixing weak budgetary procedures, can wasteful spending and opportunities for corruption be reduced? This essay looks at three varieties of pork: earmarked, ad hoc, and presidential. What can be done to curb the excesses of each one? By examining the problem of congressional earmarking, this timely article proposes a new process for controlling “earmarked” pork by supporting a new (constitutional) presidential line‐item veto/reprogramming. “Ad hoc pork,” generated by emergency or stimulus bills, is also analyzed. Its downsides can be fixed, according to the essay, by creating a preapproved roadmap for the appropriations process, thereby enhancing the quality of spending oversight. Finally, “presidential pork” derives from chief executives rewarding congressional allies and from government agencies allocating program resources so as to engender support from congressional members. This third variety of pork can be controlled if agencies improve their operational transparency plus strengthen their procedures for selecting projects. What happens when you put good people in a bad place, good apples in a bad barrel? Do the apples change the barrel, or does the barrel change the apples? —Philip Zimbardo, 2008     

Fiscal Planning, Budgeting, and Rebudgeting Using Revenue Semaphores

Revenue forecasts play an important role in the state government budget and policy process. These forecasts are generally reported to executive and legislative leaders as point estimates, with no acknowledgment of their corresponding risk and uncertainty. The revenue semaphores proposed in this article outline procedures by which revenue uncertainty directly influences the planning process. The goal is not to make forecasts more accurate, but to make discussions of budget and revenue alternatives more comprehensive. Explicitly incorporating risk and uncertainty measures into the budgeting process increases the degree of real-time budgeting and reduces some adverse effects of budget revisions after the fiscal year begins. The discussion occurs in the context of budget control, management, and policy making.