CENTRAL GOVERNMENT BUDGET PRACTICES AND TRANSPARENCY: AN INTERNATIONAL COMPARISON

From an international perspective, a relationship between public sector transparency and better economic and social outcomes is something that is increasingly acknowledged. In terms of lack of transparency in budget reports both bureaucratic model and fiscal illusion theory have been argued as explanations. To assess transparency in budget practices we analyse to what extent a sample of 41 countries are meeting OECD requirements according to its Best Practices for Budget Transparency document (OBP). We find an average OBP fulfilment of 56.4 per cent. Transparency is negatively correlated with corruption and positively correlated with economic development. Countries receiving external financial and technical support meet fewer OBP recommendations than countries not receiving it. Considering the political framework, both progressive and conservative governments reach similar transparency levels. OECD members do not significantly fulfil more OBP suggestions than non‐members. In respect of 4 variables: transparency, corruption, democracy and development, four clusters of countries arise: top‐performing, low transparency‐developed, low transparency‐developing and worst‐performing.     

STEERING PUBLIC EXPENDITURE WITH DEFECTIVE MAPS

Governments control public expenditure on definitions different from those of General Government Expenditure, the national accounts aggregate. After a prolonged period of relatively stable definitions for its public expenditure control aggregate, the UK government has recently revised this twice, substituting the New Planning Total for the Old Planning Total in 1990 and then moving in 1993 to the New Control Total. This article evaluates the justifications offered for these revisions and evaluates alternative explanations. The search for presentational gains and recourse to definitional change as an escape from problems feature prominently among the latter. Moreover, the fundamental ongoing changes in the form of public service delivery have major implications for the articulation of delivery agencies with public expenditure planning. There has been a marked loss of information and of transparency, notably with regard to forward information about function and economic category. Data continuity has been broken, and year-on-year changes to cash plans cannot be properly analysed. Transferring expenditure away from general government to where it is‘out of reach’in the expectation of efficiency gains further complicates monitoring. The channels of public accountability are blocked, in part by information overload and in part by information suppression. The existing arrangements, whether by accident or design, confer enormous discretion upon UK government through control of information flows.     

The effect of fiscal transparency on corruption: A panel cross-country analysis

Both academicians and practitioners have advocated for increased fiscal transparency in government as a means of promoting budget discipline, improving functioning of the public sector, fostering greater accountability, and fighting the global menace of corruption. Despite worldwide calls for greater disclosure, empirical analyses of whether and how fiscal transparency actually affects governance outcomes are still limited. This study draws on public choice and principal–agent theories to demonstrate how public disclosure of budgetary information helps deter government corruption. The data from 95 countries over the period 2006–14 provide evidence that more fiscally transparent countries are perceived as less corrupt. We also find that fiscal transparency matters most at the final stages of the budget process when information disclosure reflects actual government spending. Data also confirm that a Citizens Budget can serve as a strong anti-corruption tool.     

A mid-level methodology for evaluating economic development projects

This article describes the key elements of a computerized spreadsheet model that can be used by public officials and agency staff to assess in advance the likely economic and fiscal effects of economic development projects. While the model in its current state is based on Chicago, local data can be used to adapt it to other places. The project is innovative in its use of current economic theory, data, and tools to create a model useable on a routine basis by non-specialist public agency staff. The aim is to narrow the gap between academic economic analysis and public sector practice. A key element of the model is that it was developed in close cooperation with staff of the Chicago Department of Planning and Development and combines rigorous economic analysis with the political priorities and choices of public agency staff. Also, the model includes key data about the local economy and standard industry data, but can be overridden by an

analyst if project-specific information is available.     

The expansion of the public sector in federalism: a comparative analysis of a macro level governing structure and government size

ABSTRACT

Utilising Oates’ fiscal federalism theorem, the Tiebout model and Berry’s common pool model, this paper examines the effects of four characteristics of a macro level governing structure on public sector employment using a mixed method approach. Regression analysis explores the individual effect of fiscal decentralisation, spatial fragmentation, interjurisdictional competition and jurisdictional overlap on the levels of local public employment; and the qualitative comparative analysis explores the complexities between the four macro characteristics and their combined relations to the levels of state public employment. The results of the statistical analysis suggest that more labour inputs are required to produce public goods and services to meet the needs of local residents. Moreover, the qualitative comparative analysis reveals causality asymmetry between these characteristics and highlights how different interactions of characteristics of a macro level governing structure affect different levels of public sector employment.     

Aid Illusion and Public Sector Behaviour

Conventional treatments of fungibility, such as in Assessing Aid, are concerned with evidence that aid recipients do not increase sufficiently (that is, by the amount of aid) expenditure on specific areas favoured by donors. In other words, fungibility implies that recipients divert aid to expenditure on areas donors do not wish to fund. However, there is evidence that aggregate expenditure, and even spending on donor-supported areas, rises by more than the value of the aid inflow. This contribution, using insights from the public choice research on fiscal illusion, provides a range of theoretical scenarios to explain this outcome. Included are scenarios where, even where all the features of fungibility are present, expenditure on areas favoured by the donor can increase by more than the value of the aid inflow. The study concludes by suggesting new directions for research on aid policy and the impact of aid on the public sector in developing countries.     

PUBLIC SECTOR PAY BARGAINING: COMPARABILITY, DECENTRALIZATION AND CONTROL

Public sector pay, as a key component of public expenditure, has been a major issue for government since the mid-1970s. This article analyses public services pay bargaining since 1979 and examines the continuing tension between the control of public sector pay levels on the one hand and the wish to make pay levels more responsive to external market forces on the other.
The article concentrates on the changes in pay bargaining in the public services. It does not purport to provide a detailed economic analysis of the outcomes of the various phases in public sector pay policy, but does attempt to explain the process implications of the political contingencies and rationale driving government policy on pay determination. In particular it notes the resilience of national pay-setting arrangements and pay comparability throughout most of the period under review, despite the political rhetoric, emphasizing the pragmatism of government policy. The latter section of the article reviews the current policy, with its emphasis on decentralized pay determination, and considers these new developments within the context of private sector collective bargaining theory.
The evidence from the private sector suggests that pay determination in the private sector is complex and that levels of bargaining relate to various factors. Decentralization is neither a panacea for poor performance nor necessarily problem free. Devolved pay determination can lead to problems of control over costs and, in the context of high levels of trade union organization, to pay'leapfrogging'. The article concludes that there is a continuing contradiction between the role of the government as an employer, keen to devolve pay decisions to local level, and that of economic regulator with responsibility for the wider economy. This continuing tension indicates that decentralized pay bargaining in the public sector will be limited in its scope by some form of central government control.     

A Challenging State of Affairs: Public Administration in the Republic of Lebanon

ABSTRACT

This article highlights Lebanon’s administrative challenges and reform efforts, since the end of its Civil War (1975–1990). In recent years, Lebanon and international donors have worked to improve transparency, promote modern management techniques, and encourage the use of information technology throughout the public sector. Despite these efforts, Lebanon’s public institutions remain constrained by the centralization of power, corruption, outdated bureaucratic structures, and deficiencies in administrative knowledge. The success of future reform efforts will depend on whether the Lebanese bureaucracy can overcome the challenges created by regional political tensions, its Syrian refugee crisis, and an increasingly indifferent Lebanese public.     

Dependency,the state and class in the neoliberal transition of Taiwan

The remarkable economic growth in Taiwan has served as a model of the developmental state as well as a source of scepticism about neoliberal policy for many less developed countries. However, since the mid-1980s Taiwan has gravitated from its previous statist model to the universally embraced 'market-orientated' restructuring. This study seeks to explain this neoliberal transition. A disaggregated approach is employed to break neoliberalism down into three distinct dimensions: market openness, fiscal austerity, and privatisation of public sector enterprises. The analysis results confirm that: (1) Taiwan's trade dependency on the USA constituted a decisive factor in the state opening its domestic market; (2) distributional politics was forged in a new but weak democracy to incorporate more interest groups in the fiscal expansion of the post-authoritarian era; and (3) the slow but increasingly steady progress of privatisation plans was influenced not by a 'back-to-the-market' idea but by the statist legacy with which bureaucrats attempted to manage public sector enterprises even after they became de jure private firms. The theoretical implications of this transition are discussed in the conclusion.     

Strategic Commissioning in the UK: Service Improvement Cycle or Just Going Round in Circles?

This article explores the drivers of the development of strategic commissioning over the last two decades, its limitations, and the implications of its rapid spread. It suggests that the differences between government departments have allowed scope for local variations, which have been exploited by local government, leaving room for more innovation than would have been possible under an entirely ‘joined-up’ government agenda. The forms taken by this new approach to strategic commissioning were consistent with continual pressure from central government to find ways of promoting externalisation of public services. Although this underlying drive was often resisted, particularly at local level, but always re-emerged. The article ends by exploring the implications of this analysis for public services in the era of fiscal austerity under the new UK Coalition government.     

The determinants of fiscal transparency in Chinese city-level governments

ABSTRACT

The transparency of the fiscal performance of governments has attracted attention from researchers, policy-makers and practitioners around the world. This study examines the determinants of fiscal transparency in the city-level governments of China, which has become a key issue in the drive to modernise the Chinese state. Employing cross-sectional data from the 2017 Statistical Yearbooks published by the official statistical institutions and the 2017 Fiscal transparency report of city-level governments edited by the Tsinghua University, this study finds that economic development, economic openness, and dependence on transfer payments are associated with weaker fiscal transparency. Large cities, those with high levels of internet usage and cities higher up within the Chinese administrative hierarchy are associated with stronger fiscal transparency. The theoretical and practical implications of these findings are discussed.     

Fiscal Reforms and the Fiscal Effects of Aid in Uganda

Abstract

Uganda implemented public expenditure and revenue management reforms from the early 1990s with specific aims of improving budget planning and aligning aid with fiscal priorities. The dynamic relationship between aid and domestic fiscal aggregates is analysed using a Cointegrated Vector Autoregressive model with annual data for 1972–2008 and quarterly data for 1997–2014. Aid has been a significant element of long-run fiscal equilibrium, associated with increased tax effort and public spending and reduced domestic borrowing. Fiscal reforms have improved aid and expenditure management, contributing to improved fiscal performance in Uganda, with lessons for other African countries.     

A Response to Fiscal Stress: Public Sector Employment Reduction across States during a Budget Crisis

This paper incorporates measurements of the four financial condition dimensions of cash, budget, long-run, and service solvency to explore the link between financial condition and public sector employment among states in the context of the Great Recession of 2008–2009. The finding is that the severity of this economic recession led states to reduce public workers as one type of fiscal response to cope with budget shortfalls. The results suggest that not all dimensions of state financial condition affect public sector employment.     

Adjustments in municipal fiscal crises. Are they different according to the gender of the mayor?

The literature on gender has attempted to explain the differences between the public outcome depending on whether the ruler is male or female, on the basis that men and women have different preferences. This scientific research has not yet examined issues related to fiscal crises, and our research aims to fill this gap. In a context of generalised economic crisis, our research examines if the gender of the mayor affected the fiscal adjustment policies carried out by municipalities with fiscal deficits in the Spanish region of Galicia. Our paper suggests that although gender of the mayor does not seem to have affected the level of adjustment in total current expenditure, it does seem to have influenced the way in which social and non-social spending were adjusted. Our study also highlights that female mayors are associated with lower levels of tax revenues and this could slow the adjustment processes of fiscal imbalances.     

Governance and Hyper-corruption in Resource-rich African Countries

Official corruption is frequently associated with the abundance of valuable extractive resources. This article reviews the worst cases of ‘resource curse’ in Africa—Angola, Republic of Congo, Democratic Republic of Congo, Equatorial Guinea, Gabon, and Nigeria—in light of the most recent developments. Despite its systematic association with public corruption, however, mineral wealth is neither a necessary nor a sufficient condition. Corruption is widespread in resource-poor countries as well—in Africa and elsewhere—and some resource-rich African countries such as Botswana have a record of good economic performance and high public integrity, suggesting specific ways in which transparency and accountability for the use of mineral resources can be encouraged and corruption correspondingly reduced. Because corruption in resource-rich African countries is heavily influenced by external interests, particularly the multinational extractive industries, recent initiatives by the United States and the international community to foster transparency carry a significant potential for reducing corruption and improving governance.     

Hardening Budget Constraints: A Cross-National Study of Fiscal Sustainability and Subnational Debt

This study explores the financial sustainability of subnational governments in four different countries. Scholars argue that subnational fiscal capacity helps local governments deliver better public services and provide public goods, which in turn helps to promote economic growth. While administrative control by the central governments contributes to reducing moral hazard from the soft budget constraints, bottom-up strategies to manage fiscal profligacy also need attention. The study first provides understanding about the characteristics of central-local governance and management of subnational government debt of each country. Then, we test our hypotheses regarding local fiscal capacity and administrative control, including political-economic factors that may affect debt spending by local governments. Our findings show that subnational fiscal sustainability improves when the central governments have clear rules to intergovernmental transfers in place and more (market) liberal policies, meanwhile when subnational governments have a more fiscal capacity and less intergovernmental transfers they are able to manage their debt more soundly.     

A GENDER ANALYSIS OF WOMEN IN PUBLIC–PRIVATE–VOLUNTARY SECTOR ‘PARTNERSHIPS’

The nature of work and traditional notions of the public sector have been changing with increasing collaborative governance and delivery of public services among public, private and voluntary sector organizations. In the UK, governments at national and devolved levels of government have adopted collaborative governance for service delivery through various networks and partnerships. This article explores collaborative governance from a gender perspective, specifically the perceptions of women in public–private–voluntary sector partnerships. While previous research in this area has explored aspects of collaborative governance such as power, trust, accountability, decision‐making, performance, exchange of information and participation, there is very little research on women within these networks. The article therefore provides a gendered analysis, disaggregating survey data to better understand the dynamics, for women, of collaborative governance and partnerships among public, private and voluntary sector organizations.     

Political Consensus and Fiscal Outcomes

It is becoming difficult to maintain consensus in a period of economic austerity, and this possibly challenges the ability of democratic institutions to take decisions on tough economic questions. In order to find out how political consensus influences fiscal outcomes, this article sets out to analyse the association between political consensus and public expenditure growth. The results show that political consensus is positively associated with both budgeted and actual expenditure growth, but also negatively associated with budget overruns. This indicates that political consensus comes at a cost, while at the same time politicians may be better at sticking to budgets if political consensus exists. The analysis is based on a pooled regression analysis of the local governments in Denmark in the years 2008 and 2009 using a data set combining survey data with administrative data on the local governments.     

Managing the Public Sector in Hong Kong: Trends and Adjustments

Public sector management in Hong Kong was initially designed to rule the territory as a British colony. A number of changes took place in the last quarter century before Hong Kong's reintegration with China and the nature of public sector management has transformed over this period. An overview of administrative principles and practices and an analysis of changes reveal trends that were influenced by both local and international factors. The framework of traditional public administration in the territory adapted effectively to embrace the principles of new public management without much difficulty. The global economic crisis compelled the government to revise its strategies to expand public spending and adopt a further reduced role in the provision of public services. New social, economic and political challenges are driving Hong Kong to adjust to the changing circumstances and trends, and four noticeable shifts can be identified. They include shifts from an administrative to a political executive, from job cuts to job creation, from financial restraint to increased spending, and from public to private sector provision of public services. The trends are driven by local and international forces as well as the progress of democratization and political awareness in Hong Kong.     

Intra-provincial fiscal decentralization,relative wealth,and healthcare efficiency: Empirical evidence from China

Decentralizing fiscal power to locally elected governments is often regarded as beneficial for public service efficiency. However, questions remain about whether decentralizing fiscal responsibilities work well in countries lacking political decentralization. In China, fiscal decentralization has significantly strengthened the role of local governments in the provision of healthcare services, but evidence of its efficiency effects is scarce. To cast light on this issue, this study investigates the relationship between intra-provincial fiscal decentralization and the productive efficiency of healthcare services in China. Analysis of panel data for 2006–2017 suggests that expenditure and revenue decentralization from provincial to sub-provincial governments significantly improves healthcare efficiency. Further analysis suggests that the positive impact of healthcare expenditure decentralization on healthcare efficiency may be stronger in wealthier provinces. These findings have important theoretical and practical implications.