Taxation by Citation? Exploring Local Governments’ Revenue Motive for Traffic Fines

Anecdotal evidence suggests that local governments may have a revenue motive for traffic fines, beyond public safety concerns. Using California's county-level data over a 12-year period, this article shows that counties increased per capita traffic fines by 40 to 42 cents immediately after a 10 percentage point tax revenue loss in the previous year; however, these counties did not reduce traffic fines if they experienced a tax revenue increase in the previous year. This finding indicates that county governments probably view traffic fines as a revenue source to offset tax revenue loss, but not as a revenue stabilizer to manage revenue fluctuation. This article also finds that low-income and Hispanic-majority counties raised more traffic fines. Counties that generated more revenue from the hotel tax—a tax typically paid by travelers and visitors—raised more traffic fines, indicating a possible tax-exporting behavior by shifting the traffic fine burden to nonlocal drivers.     

Dueling Revenue Caps and Municipal Bond Yields: The Case of Houston,Texas

Two competing revenue cap proposals, one from a citizen's group and the other proposed by the mayor, were on the November 2004, election ballot of the City of Houston, Texas. Both propositions passed, yet the citizen's group had to sue to have their initiative enforced. This study examines the effect on Houston bond yields of the series of events (from June 2004 through March 2006) surrounding these dueling revenue cap propositions. The empirical findings suggest that the budget‐related events can have a significant effect on yields demanded by investors in the secondary market for outstanding uninsured tax‐exempt general obligation debt.     

Bias in OMB's economic forecasts and budget proposals

The Office of Management and Budget (OMB) annually submits the President's budget for the U.S. government to the Congress. The economic forecasts and revenue and outlay proposals contained in the budget have been criticized as biased, especially during the 1980s. Tests for bias in one year ahead proposals for the 1963–89 period show no bias in economic forecasts and revenue estimates, but substantial bias in outlay proposals. Most outlay proposals are consistently less than actual outcomes, accounting for underprediction of the Federal deficit. OMB outlay proposals appear to be influenced by politics. Republican administrations show more significant proposal biases, with defense proposals higher and domestic outlay proposals lower than outcomes. The Office of Management and Budget consistently understates the deficits by resorting to the most optimistic economic assumptions it can credibly — and now sometimes even incredibly — employ. — Senator James SasserWall Street Journal, 25 January 1990     

Local government reform in South Africa: An analysis of financial management legislative compliance by municipalities

South African local government has undergone radical transformation. The reform process included a local government financial management best‐practice technical assistance programme (MFMTAP) targeting financial management and especially budget quality reform. Dollery and Graves (2009) earlier examined the efficacy of the South African National Treasury (NT's) municipal budget funding compliance technique for measuring adherence to the Municipal Finance Management Act's (MFMA) budget funding requirements using a single metropolitan municipality case study. This article further evaluates the robustness and validity of the funding compliance instrument as a reform performance measurement tool by comparing the results of four geographically and demographically different municipalities. Also introduced is a performance ‘trend’ instrument similar to a ‘Likert scale’ for comparing municipal performance. Optimal tax revenue theory is invoked to examine this key revenue variable for producing a compliant budget. The article finds the ‘budget funding’ reform component of the Best‐Practice Technical Assistance (BPTA) programme presently ineffective and unsustainable. Copyright © 2009 John Wiley & Sons, Ltd.     

Organization and Reporting of Public Financial Accounts: Insights and Policy Implications from the Singapore Budget

This paper analyses the Singapore government budget's organization and reporting structure, and draws lessons and policy implications for improving public financial management practices. The paper finds that Singapore's fiscal marksmanship record has been poor with consistent underestimates of revenue and overestimates of expenditure. Second, subtle divergences from international reporting standards limit the information available and constrain the budget's analytical usefulness in international comparisons. Third, current reporting conventions of the budget fail to provide an adequate representation of the government's fiscal position. Fourth, revised estimates of budgetary balances in line with international reporting standards show a considerable increase in the fiscal space available. The policy implications of these findings are discussed, as well as some reporting changes which can help improve the fiscal marksmanship record, increase public sector transparency and accountability, and facilitate better quality discourse among all stakeholders on public financial management.     

State Revenue Forecasts and Political Acceptance: The Value of Consensus Forecasting in the Budget Process

Concerns about political biases in state revenue forecasts, as well as insufficient evidence that complex forecasts outperform naive algorithms, have resulted in a nearly universal call for depoliticization of forecasting. This article discusses revenue forecasting in the broader context of the political budget process and highlights the importance of a forecast that is politically accepted—forecast accuracy is irrelevant if the budget process does not respect the forecast as a resource constraint. The authors provide a case illustration in Indiana by showing how the politicized process contributed to forecast acceptance in the state budget over several decades. They also present a counterfactual history of forecast errors that would have been produced by naive algorithms. In addition to showing that the Indiana process would have outperformed the naive approaches, the authors demonstrate that the path of naive forecast errors during recessions would be easily ignored by political actors.     

The Executive Budget in the Federal Government: The First Century and Beyond

This article reviews the history of executive budgeting in the United States a century after President William Howard Taft's Economy and Efficiency Commission proposed an executive budget. This history, the authors argue, does not suggest that giving more budget power to the president will improve budget outcomes. Instead, what is needed is more cooperation between the branches of government and a better‐educated public—goals that were shared by budget reformers when the Taft report was published.     

Budget Deficits in the States: Virginia

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Towards a management renewal of the United Nations—Part I

This article addresses the hitherto largely neglected subject of administrative reform of the United Nations—without which, the capacity of the Organization to carry out its increasingly critical global mandates effectively and efficiently, is severely constrained, with efforts in this direction being for the most part incremental, indecisive and ineffectual. The problems arise partly from the originating and continuing model for the UN's organization and culture, which predate the advent, for example, of modern automated systems of personnel and financial management. Other elements of the problem arise from the UN's system of governance—the oversight committees, senior staff nominations by Member States, allocation of funds or approvals for critical management and administrative reforms. As at the national level, impactful UN reform also requires internal management leadership, follow-up, the continuity and UN experience of top officials, capacity to design and implement measures, and budget flexibility to procure outside expertise. In a second, concluding, part of the article, the authors will suggest a strategy for UN reform and a process for carrying forward a ‘renewal exercise’ to equip the Organization for its role beyond the year 2000. © 1996 by John Wiley & Sons, Ltd.     

The nature of managerial work in the public sector: An African perspective

It has been asserted too often that the development of non-western countries—those of Africa, in particular—is highly dependent upon their assimilation of western management techniques. Yet, the applicability of western management techniques to a non-western cultural milieu remains the subject of debate in the public administration and management literature. Much of the management development literature since the mid 70s has dealt with the replicability of Mintzberg's partition of the nature and contents of the manager's activities in diverse western work settings, in the US primarily. Few attempts have been undertaken to test Mintzberg's findings in non-western settings. In this article, the authors attempt to partially fill this gap in the literature. More specifically, the authors investigate the degrees to which the management roles identified in the US can be applied generically to the public sector in the African context. The findings indicate that perceptions of management roles at the macro level are highly consistent across cultural boundaries. Significant differences, derived primarily from the historic experience of colonial administration and the contingent micro level impact are also noted. The implications of these findings for the design and implementation of management training programmes in Africa are explored.     

RISING WITH THE TIDE WITHOUT FLIPPING THE BOAT — ANALYZING THE SUCCESSES AND CHALLENGES OF FISCAL CAPACITY BUILDING IN CHINA

While many developing countries experience a short period of economic boom and then spiral quickly into periods of deficit, currency fluctuation, and indebtedness, China has been able to sustain rapid economic growth and maintain solid fiscal capacity for the past 30 years, even during the Asian financial crisis in the late 1990s and the global recession in the beginning of the 21st century. This article examines three key strategies behind China's fiscal success — its flexibility in adapting tax policies to the changing economic and social conditions, its success in realigning the intergovernmental fiscal relationship in 1994 and forcing subnational governments to become more entrepreneurial in revenue generation, and its pursuit of institutional reforms since the mid‐1990s to improve the government's capacity in budgeting and financial management. The article evaluates the implications of the Chinese experience for other developing countries and discusses the future challenges of fiscal reforms in China. Copyright © 2012 John Wiley & Sons, Ltd.     

Effects of the IMF and World Bank on public expenditure accountability in Jamaica

This article analyses the positive and negative effects of IMF stabilization programmes and World Bank structural adjustment programmes on the accountability of public expenditure management in Jamaica in the period 1980–1992. Particular attention is given to the negative accountability effects of IMF budget deficit reduction targets imposed on a Government uncommitted to meeting such targets. Many of the arguments presented in this article relate to expenditure accountability problems more generally and it cannot be proved that IMF conditionality was the sole cause of these problems. It is argued, however, that IMF conditionality contributed. This argument is based on a large number of semi-structured interviews conducted in 1993 with Jamaican bureaucrats, politicians, donors, academics and private sector representatives, many of whom were involved in Jamaica's budget formulation process, and on analysis of the existing literature and data. The conclusion reached is that donor-guided reform programmes have complex and often conflicting impacts on the accountability of the Government's budgetary practices. A major question that arises is the relative importance that donors such as the IMF place on budget conditionality as against accountability. The conclusion based on the Jamaican experience is that the IMF placed greater emphasis on the former. © 1998 John Wiley & Sons, Ltd.     

The transformed identity of a banking corporation's employees, 1960s–1980s

The current paper discusses one aspect of corporate social responsibility—employee community volunteering—as implemented at an Israeli banking corporation. The literature on corporate social responsibility as a feature of global capitalism has largely ignored the history of corporate philanthropy and its relation to the current model of social responsibility. Moreover, to date, no studies have addressed the relationship between models of corporate social responsibility, on the one hand, and management approaches, on the other. In this historical–ethnographic study, we examine a case in which, we argue, normative management models and advanced marketing approaches combined to shape new conceptions and practices of employee volunteering. We examine how the process evolved over the course of three marketing campaigns initiated by the bank's management between the early 1960s and the early 1980s. In the early 1960s, the models in question helped refashion the employees' identity as service providers ‘empathic’ toward clients. By the late 1970s, their identity was transformed once again, this time to incorporate a ‘humane’ orientation toward the ‘community’. In the process—the results of which are still felt today—the employees became the carriers and disseminators of an organizational culture that emphasized values of philanthropy and social commitment. Copyright © 2014 John Wiley & Sons, Ltd.     

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.     

Treated politicians,treated voters: A natural experiment on political budget cycles

Although pre-electoral political manipulation of the budget — the political budget cycle (PBC) — has been long investigated by scholars, empirical findings are mixed at best. This is partly because of the non-random nature of election timing. There also exist ongoing debates over how the budget is manipulated for electoral purposes. We address these issues by exploiting a natural experiment in Japan, where the timing of both executive and legislative elections in municipalities is fixed, staggered, and as good as random, and by using the detailed items of the municipal budget. We find that total and capital expenditures follow the PBC, but tax revenue does not. We also find that executive elections are associated with the PBC, but legislative elections are not. Against the conventional wisdom that democratic or developed countries are free from the PBC, our case of Japan offers an intriguing exception.     

Rural development management in Nepal,Part I: Coordination in the Rasuwa-Nuwakot Integrated Rural Development Programme

Rural development management in Nepal has been criticized for more than a decade now on the grounds of the country's weak aid-absorbing capacity, administrative slowness and poor project management. Though several reforms of the rural development planning and management systems have been staged, at present coordination in integrated rural development projects remains weak. The paper reports on the empirical findings of research on mechanisms, procedures, organizational arrangements and problems of coordination. Although the country's environment, and its socioeconomic and cultural constraints, may negatively influence smooth operations in implementing integrated programmes, several policy considerations for improvement may be formulated. Among these, organizational reform with decentralization and reduction of the number of offices involved, strengthening the resource management system, especially budget release and personnel motivation, and a more integrated method of policy, programme and project formulation are the issues considered most important by the government officers themselves. Part II will appear in vol. 7, no. 3 of this journal, and examines the implementation and management of rural development in the Karnali and Bheri districts of the Mid-Western Development Region of Nepal.     

Improving the Budget Process in Fragile and Conflict‐Ridden States: Two Modest Lessons from Afghanistan

Both the donor community and scholars have created a cottage industry studying “fragile” states. International nongovernmental organizations that have developed indexes measuring corruption or governance have been unkind to Afghanistan. One index suggests a different and more optimistic story. The International Budget Partnership measures transparency every two years with its Open Budget Index. Afghanistan demonstrated dramatic improvement on this index between 2008 and 2012. The authors use the improvement in Afghanistan's transparency score as an entry point to explore how donors try to intervene and promote transparency as part of broader efforts in public financial management development and how legislative strengthening has also contributed to budget reform. The analysis offers a modest corrective to the overly pessimistic assessments of fragile states by showing that a fragile state can improve its budgetary transparency and enhance governance by strengthening the legislature's involvement in the budget process.     

The Politics of Forecast Bias: Forecaster Effect and Other Effects in New York City Revenue Forecasting

This paper examines the impact of forecasters, horizons, revenue categories, and forecast timing in relation to decision making on forecast bias or accuracy. The significant findings are: for the most part forecasters tend to report forecasts that are similar rather than competitive. Forecast bias (underforecasting) increases over longer horizons; consequently claims of structural budget deficit are suspect, as an assertion of structural deficit requires that a reliable forecast of revenue shows continuous shortfall compared with a reliable forecast of expenditures. There is an overforecasting bias in property tax, possibly reflecting demand for services. There is an underforecasting forecast bias in two revenue categories, all other taxes and federal categorical grants, resulting in a net total underforecasting bias for the city's revenue. There appears to be a period effect (forecasts in June are substantially biased), but this effect requires further study. The study suggests further examination of the bias associated with revenue categories, time within the budget cycle, and forecast horizon.     

Forecasting General Fund Revenue: An Analysis of Idaho FY 1998 to FY 2011

Forecasting state general fund revenue (GFR) though business cycles means possibly confusing a cycle with an underlying long‐run trend. Relative to the actual revenue, the mean squared error of the academic, legislative, governor's, the growth path (GP), and Holt‐Winters (HW) forecasts for Idaho GFR was not significantly different than the naïve forecast's; the Combined GP‐HW forecast has significantly smaller mean square error. The GP model (ARIMA 1, 2, 1) produced a short‐run elasticity of revenue with respect to income of 1.05 (±0.05). The best GFR forecasts combined a HW two‐step‐ahead level with a GP one‐step‐ahead trend that provided a forecast of GFR with the smallest root mean square error between FY 1998 and FY 2009. A budget stabilization fund needs to be 34–40 percent of GFR for GFR to sustain growth at the state's long‐run expansion rate during a contraction.     

Revenue Diversification in Arkansas Cities: The Budgetary and Tax Effort Impacts

The consequences of revenue shortfalls for cities are particularly dramatic due to the balanced‐budget requirement. Revenue diversification is one method of stabilizing revenue streams because diversified revenue structures can mitigate the revenue fluctuations often associated with single source revenue. Using audited financial reports, this study examines the impact of revenue diversification in Arkansas cities over 10 years. To address the issue of revenue adequacy, this study examines diversification's impact on current year budget changes in revenue and expenditures as well as its impact on tax effort.