Federal Budgeting After September 11th: A Whole New Ballgame,or Is It Déjà Vu All Over Again?

Federal budgeting has undergone some profound changes since the tragic events of September 11th, 2001. Large surpluses that existed prior to September 11th and were forecast to continue have been replaced by equally large and intractable deficits. The consensus around a macro‐level norm for federal budgeting has completely broken down. In other ways, the federal budget process has not changed at all. Despite the emphasis on defense and homeland security, domestic discretionary spending is still continuing unabated, as it has since the late 1980s. Further, the federal government continues to have chronic difficulty adopting its budget in a timely fashion.     

Priority-based budgeting: An honest broker among municipal functions?

Implemented in over 200 local governments, priority-based budgeting (PBB) reflects a contemporary attempt to systematically determine and implement desired budgetary reallocation. PBB proponents claim it is highly effective in prioritizing governmental programs and aligning budgetary allocation to priorities. However, core municipal functions such as public safety and public works are often impervious to budgetary shocks. Can PBB overcome this to better align budgetary allocations with organizational priorities? This study examines 32 municipal PBB implementers with difference-in-differences analysis; finding a varied effect upon municipal functions that casts doubt on its ability to fully reallocate budgetary resources from low- to high-priority programs.     

Using Adjusted Performance Measures for Evaluating Resource Use

Public service organizations are looking for ways to improve the evaluation of performance and resource allocation. One of the approaches is to use adjusted performance measures, which attempt to capture factors that affect the organizational performance but are outside of the organization's control. This article illustrates the construction and use of adjusted performance measures to assess the performance of public schools, and reports findings from a study of school-based budgeting in Chicago that relates adjusted performance measures and patterns of budget allocations.     

What Can Performance Information Do to Legislators? A Budget‐Decision Experiment with Legislators

Studies on the influence of performance information on budgeting decisions have produced contradictory findings. This article offers a framework of the parliamentary context that links performance information to legislators’ budgeting decisions. The framework suggests that the impact on politicians’ allocations will differ depending on whether performance information is reflected in the budget proposal, whether the allocation issue concerns a politically difficult trade‐off for the decision maker, and whether information falls into a receptive partisan mind. The experimental study uses 57 actual legislators. The results show that the introduction of performance information into legislators’ deliberation process leads to stronger deviations from the status quo allocation. This difference occurs because performance information highlights more clearly the expected consequences of budgetary changes and allows for more pronounced reactions. More informed decisions, however, might make compromise among legislators more difficult because individual positions will become more polarized.     

Implementing Program Budgeting in the Serbian Ministry of Defense

The Republic of Serbia's Ministry of Defense (MoD) is attempting to implement a program‐oriented, multi‐year budgeting system in 2010. This paper reveals several challenges that threaten the success of this initiative. First, we find that the proposed budget system confuses organizations and programs. Second, there does not appear to be a centrally coordinated effort to implement program budgeting, leading to significant disparities in comprehension, organization, and implementation amongst the subordinate commands in MoD. Finally, there is a distinct lack of communication within the MoD regarding the necessity of a program budget and how the process should move forward. These issues inhibit the implementation of program budgeting in the MoD and diminish the possible gains associated with the multi‐year, programmatic allocation of defense resources.     

Boom and Bust Budgeting: Repetitive Budgetary Processes in Nigeria, Kenya and Ghana

One of the least studied topics in comparative budgeting is how governments budget during economic and boom and bust cycles. Theory and past evidence suggest that national budgets of poorer countries are made and remade continuously over these periods. Case material from Nigeria as well as supplemental information from Ghana and Kenya illustrate the principal features of the persistence, types, and sequence of such repetitive budgeting. The experience of the three countries in boom and bust budgeting has considerable implications both for a theory of comparative budgeting and for national budget management and policy in Subsaharan Africa specifically.     

Shifting Priorities: Participatory Budgeting in New York City is Associated with Increased Investments in Schools,Street and Traffic Improvements,and Public Housing

ABSTRACT

In participatory budgeting (PB), residents instead of public officials decide how public money is spent. PB may reveal that residents prioritize different investments than public officials, which could lead to more socially just spending. However, little research has examined whether and how PB shifts spending priorities. This study leverages publicly available records on New York City council districts’ capital project allocations over ten years (2009 through 2018), comparing spending within and across PB and non-PB districts. Multi-level regression models show that, on average, when council districts adopted PB, greater proportions of their discretionary capital budgets were allocated to schools, streets and traffic improvements, and public housing. PB was associated with decreases in spending on parks and recreation projects and housing preservation and development projects. The article shows that priorities shift when residents are directly involved in budgeting. Implications for equity and community well-being, and directions for future research are discussed.     

How Government Reactions to Violence Worsen Social Welfare: Evidence from Peru

Dissident violence inflicts many costs on society, but some of the longest‐lasting consequences for civilians may be indirect, due to the government's response. We explore how government policy responses affect social welfare, specifically through budgetary shifts. Using subnational violence and budgeting data for Peru, we demonstrate that attacks on soldiers during the budget negotiation period drive a shift from local social services, especially health, to defense. One soldier fatality implies a 0.13 percentage point reduction in the local health budget share (2008–12). Health budget cuts due to a single soldier fatality result in 76 predicted additional infant deaths 2 years later. We show that the effect on health budgeting operates through decreases in women's use of health facilities and postnatal services. We offer evidence that Peru's coercive response indirectly harms civilians due to butter‐to‐guns budgetary shifts. Our results identify a budgetary mechanism that translates dissident violence into a deterioration in social welfare.     

Deliberative participatory budgeting: A case study of Zeguo Town in China

The search for a better practice instrument of civic engagement has led to participatory budgeting and deliberative polling in recent years. Participatory budgeting stresses empowerment and citizens' struggle against the establishment and unequal social structures, whereas deliberative polling works within the system and focuses on improving democratic decision‐making processes by applying credible social science methods. Often, these two processes are presented as being in conflict with each other, which is to the detriment of the search for best practice in deliberative governance. This paper develops a theoretical analysis of deliberative participatory budgeting which is distinguished from unrepresentative and non‐deliberative but self‐selected participatory budgeting; that is, it considers how the quality of participatory budgeting can be improved through deliberative polling. This theoretical analysis is backed by an empirical study of deliberative participatory budgeting in Zeguo Township, Zhejiang Province, China. It explores whether, how, and under what conditions it is possible to combine deliberative polling and participatory budgeting. It details four experiments and assesses the successes, failures, limitations, and problems of the experiments. The case of Zeguo offers scholars, activists, and officials lessons about how to pursue best deliberative practice in both authoritarian states and democratic societies.     

Some evidence of congressional political markets in DOD personnel allocations across states

An empirical analysis of the distribution of Department of Defense (DOD) personnel (both military and civilian) across states is developed with a commonly used Public Choice model of resource allocation in a legislative setting. The model specification employs Congressional seniority, Congressional committee representation, Presidential electoral votes, and the per capita dollar value of prime defense contract awards to explain the variation of DOD personnel across states over time. The empirical analysis is performed over the last three decades, and the results indicate that this particular Public Choice legislative model performs well in explaining the variation in DOD personnel allocations across states. The results also provide some limited evidence of a possible political market between the states for DOD personnel allocations. This analysis has implications for future testing of whether the Base Realignment and Closure Commission (established in 1988 under President Reagan), and the Defense Base Closure and Realignment Commission of 1990 (under President Bush) were effective in significantly decreasing the legislative politics involved in the selection and approval process for base closure and realignment.     

The Budget Enforcement Act of 1990: The Path to No Fault Budgeting

The Budget Enforcement Act of 1990, included in the controversial and comprehensive budget legislation passed by Congress in October, makes a number of significant changes in federal budgeting. It shifts the focus of the budget process from deficit reduction to spending control, provides five-year spending totals and mini-sequesters for defense, international and domestic appropriations, and puts entitlements and revenue expenditures on a pay-as-you-go basis. The Gramm-Rudman-Hollings deficit targets have been raised substantially, Social Security surpluses taken out of the deficit calculation and allowance made for further adjustments for inflation, Operation Desert Shield, and other emergency spending, minimizing the prospect for general sequestration. OMB has been given important new estimating authority and the roles of the congressional committees involved in budgeting have been altered.     

Budgeters' Views of State Performance-Budgeting Systems: Distinctions across Branches

Given that a majority of states have had some sort of performance‐budgeting initiative on the books for several years, how has implementation of such reform progressed? To answer this question, we surveyed legislative and executive budgeters from the 50 states, asking them for their impressions of performance‐budgeting implementation in their state. Specifically, we asked these budget officers about the reasons for introducing performance budgeting in their state; the types of activities required of their system; responsible oversight bodies; extent of application across state agencies and departments; and perceived levels of effectiveness and problems experienced with implementation of the budget reform. Our findings indicate that implementation of performance‐based budgeting systems is proceeding slowly. While there are some benefits to highlight, results show that implementing performance budgeting is not without problems—perhaps the greatest being differing perceptions of use and success among budget players, particularly across branches of government.     

Defining and Achieving Normative Democratic Values in Participatory Budgeting Processes

Achieving public participation often is a goal for public budgeting entities, but it is difficult to accomplish in practice. This study examines three questions: How do public representatives interpret and define their democratic responsibilities? What are their insights regarding opportunities for and barriers to participatory budgeting processes? To what extent are these goals met? To address these questions, this research employs a qualitative research strategy with a case study design of a public university budgeting committee. The findings reveal that respondents (1) define their mission structurally and procedurally, (2) identify a need for ethical behavior and leadership, and (3) recognize that democratic values such as participation and efficiency are in tension with one another. Being open and inclusive comes in the form of the citizen–public administrator dialectic and requires intellectual, ethical, and practical engagement with competing democratic values.     

Responsibility Budgeting at the Air Force Materiel Command

The case study reported here challenges conventional wisdom about the feasibility of implementing responsibility budgeting and accounting practices in U.S. government. A variant of this practice took root and operated effectively in a large federal agency—the Air Force Materiel Command—during the period of study. Contrary to conventional wisdom, implementing a meaningful form of responsibility budgeting and accounting does not require changes in public management policies or systemic institutional reform. However, the evidence shows that instituting practices of responsibility budgeting and accounting may require considerable administrative ingenuity in adapting the generic practice to the situation at hand.     

Budgeting and Rebudgeting in Local Governments: Siamese Twins?

The literature on budgeting in the public sector has traditionally focused on the annual budgetary process. Much less attention has been paid to rebudgeting—that is, what governments do to revise and update their budgets during the fiscal year. Because of its potentially large impact on appropriations, rebudgeting seemingly deserves more attention than it has been granted so far. This article uses data from a sample of Italian municipalities to test hypotheses on the main drivers of budget revisions. According to the results, rebudgeting is strongly affected by the degree of incrementalism in the initial budgeting process, as well as by several internal and external determinants, such as political variables, organizational features, financial conditions, and the local socioeconomic environment.     

The Fables and Foibles of Federal Capital Budgeting

This article critically evaluates the notions behind proposals to institute capital budgeting at the federal level. Four critical assumptions are found to be behind the contention that capital budgeting will improve federal investment policies: (1) an agreed-upon and accepted definition of a capital budget exists; (2) a capital budget "adds value" by improving the quality of information; (3) better information leads to better decisions; (4) better decisions lead to better actions. Each of these assumptions is evaluated using examples drawn from various levels of government and from the private sector. The general finding is that if these assumptions hold, then it is reasonable to expect that capital budgeting will lead to better programmatic decisions. Unfortunately, one or more of these assumptions usually does not hold and for this reason the case for federal capital budgeting is not very strong     

Biennial Budgeting in the Federal Government

This article examines the possible outcomes of changing from the current annual budget review to biennial budgeting. It looks at the experience of various states and its application to the federal level. It explores all of the supposed benefits , including less time spent on budgeting issues, more accurate budget projections, reduction of congressional workload and increased congressional oversight and, for the president's point of view, increased power of the executive branch. Concluding on a cautious note, the article offers some plausible applications of biennial budgeting to the national budget.     

The President's Commission to Study Capital Budgeting: An Interim Review

The President's Commission to Study Capital Budgeting is slated to complete its report by year-end 1998. Even though it would be premature to try to anticipate the Commission's recommendations, it is already clear that the Commission will contribute significantly to the capital budgeting debate by casting the concept of capital budgeting broadly, as a systematic decision process, rather than merely a budget accounting or scoring convention or a government financing alternative to the balanced budget rule. This article summarizes some of the analytical accomplishments of the Commission at the mid-point of its expected life.     

The Roads to Transformation: Budgeting Issues in the Czech and Slovak Federal Republic 1989–1992

The Czech and Slovak Federal Republic no longer exists, but by the time of its dissolution, the transformation from a socialist to a democratic model of budgeting to another was well under way. This article illustrates some of the major issues facing countries attempting to remodel their systems of budgeting and financial management toward a more liberalized and democratic society.