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.     

Debt,Corruption, and State Identity: Lessons from Eighteenth-Century Political Thought

The subject of national debt raises serious questions concerning state identity. Should a state that has radically altered its constitution be responsible for decisions taken by the previous state? Much hangs on how we characterize the state as a continuous agent. This article explores debates over national debt, state integrity, and corruption in the eighteenth century, the era in which the modern financial-bureaucratic state was in its infancy. Many eighteenth-century writers treated national debt as corrupting; some advocated voluntary default as a manner of laying low the insidious “moneyed interests” usurping political power. But if public debt was attacked by some as the soul of corruption, others saw it as something that had been made possible by—and was a guarantor of—integrity. These controversies reveal a clash of visions of what constitutes state integrity. This same clash is alive in contemporary debates about national debts.     

Post-revolutionary State Building in Ethiopia, Iran and Nicaragua: Lessons from Terror

This paper focuses on an earlier theorized critical stage of revolution, the Reign of Terror which is redefined with summary justice as its essence and employed in a comparative analysis of three modern revolutions, Ethiopia, Iran and Nicaragua. The analysis demonstrates the importance of national factors over international factors in explaining post-revolutionary state construction. A reign of terror is an extemporized state; it is not an inevitable stage of revolution. Comparison of Ethiopia and Iran, where terrors occurred, is contrasted with Nicaragua, where a reign of terror was avoided. This reveals the significance for post-revolutionary state construction of the timing and outcome of civil war, of domestic policy choices constrained by circumstances directly encountered and of state control over new, revolutionary, means of coercion.     

Municipal Government Revenue Forecasting: Issues of Method and Data

In this article the authors investigate the impact of the choice of time series method, the length of the data stream used to estimate the model, and the frequency of the data on forecasting accuracy for own source, non-tax general fund revenue for six Connecticut municipalities. The authors find that exponential smoothing models are generally the most accurate. They also conclude that local government officials should rely on bimonthly rather than monthly or quarterly data and retain, in a readily usable format, more than three years of data.     

The Impact of Tax Revenue from Capital Gains Realizations on State Income Tax Revenue and Budget Conditions

We explore the effect of the rapid increase in capital gains realizations on state income tax revenue during the 1990s and 2000s, and the effect that this had on state fiscal decisions regarding the use of these revenue. We find wide variation in the growth of capital gains realizations across states and that the growth in capital gains had a significant effect on state income tax revenue for many states. We find that states used a sizable portion of the additional revenue from capital gains to fund reserves in the year the revenue was generated, and that capital gains revenue lead to some reductions in taxes but not to increases in expenditures. The evidence suggests that states were conservative in their use of capital gains related revenues.     

中国加入世贸组织十年来的经验与教训——以国际规则的认识和运用为视角

中国入世十年来发展成就巨大,也面临着越来越多的贸易摩擦,主要原因之一就是中国企业对国际贸易规则和法律的认知及运用还有待提高.在认识和了解国际规则、增强国际规则意识的基础上,中国还应当加强对国际规则的运用,更要参与完善旧的国际规则体系.     

Repealing Federal Oversight of State Health Policy: Lessons from the Boren Amendment

The Boren Amendment is frequently cited as an example where judicial involvement markedly shaped the implementation of federal legislation. Unlike other controversial health policies, Boren was eventually rescinded by Congress. Results indicate that the Amendment was repealed because changing socioeconomic, political, and programmatic conditions combined with policy‐oriented learning to facilitate a shift in policy venue away from the judiciary toward the President and Congress. This is because during the devolutionary climate of the mid‐to‐late 1990s, both the executive and legislature proved more conducive to the policy image promulgated by state officials that the Amendment unnecessarily restricted state discretion, than the policy image promulgated by providers that without the Amendment, low reimbursement levels would compromise access and quality. Data for this analysis derive from archival documents, secondary sources, and 101 interviews with state and federal experts.     

Managing the Welfare State: Lessons from Gustav Möller*

The administrative problems of the present Welfare State have come into focus in recent research. The basic question being raised is whether an elected government can control the bureaucracies that handle the social programmes, i.e., whether the intentions of the parliamentary majority really can be translated into action when they reach the point of administrative implementation. The central subject of this study is the legendary architect of the Swedish Welfare State, Gustav Möller, who was Minister of Social Affairs 1924-26 and 1932-51. It is argued that many of the problems highlighted in present theories of public administration were already apparent to Möller. As the minister responsible for the administrative construction of the Swedish Welfare State, he developed several strategies to cope with the problems of bureaucracy. Having lost the battle over the Social Democratic party leadership in 1946, Gustav Möller left the government in 1951. Subsequently many of his original anti-bureaucratic administrative strategies were reversed.     

When Efficiency Is Unbelievable: Normative Lessons from 30 Years of City–County Consolidations

We use a new model of city-county consolidation to analyze 12 local government consolidation attempts during the last three decades. Using a rigorously designed comparative case study, we identify the critical variables that explain why some consolidations succeed and others fail. Arguments for consolidation typically fail when they focus on the increased equity to be gained from the redistribution of revenues from the suburbs to central cities. Traditional arguments that are based on increased efficiency are also unsuccessful. Instead, the essential element of a successful consolidation is a group of civic elites who define the economic development vision for the community, determine that the existing political structure is incapable of supporting and implementing that vision, and convince the voters that city–county consolidation is the key to economic development that will benefit the whole community, not just the elites.     

What Not to Ask of Budget Processes: Lessons from George W. Bush's Years

Budget reform requires goals that are both good public policy and achievable. The core purpose of budgeting is to consider and relate details and totals. Common demands for reform are dubious because they slight consideration of details. For this reason, too strict a definition of "balance" would be bad policy; the demand for balance over many decades is neither good policy nor realistic; and multiyear discretionary spending caps can be both bad policy and impractical. Concern about passing annual budget resolutions ignores the fact that the major reason for annual totals is no longer endorsed by policy makers and economists. Scorekeeping should be honest and accurate and often can be improved, but possible achievements are limited. Budget reforms will not make government accountable if the governing coalition is united in seeking to avoid that, and if neither the public nor elites demand it.     

Cognitive and Normative Determinants of State Policymaking Behavior: Lessons from the Sociological Institutionalism

Although comparative state policy frameworks consider the roleof societal norms, few account for cognitive and normative imperativesthat originate outside a state's boundaries and are specificto promoting or impeding the adoption of particular policies.One approach that does so is the new institutionalism in sociology,which emphasizes legitimacy-seeking actors who face pressuresto conform to cultural rules, norms, and expectations, regardlessof outcomes. This article introduces comparative state policyresearchers to the sociological institutionalism, emphasizingbasic concepts and arguments and suggesting how reliance onthis framework can enable researchers to better integrate rational-actorand cultural-based views for understanding why states chooseparticular public policies. Interviews with national and stateexperts in Medicaid nursing-facility reimbursement illustratethe utility of the sociological institutionalism for comparativestate policy research.     

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.     

State Government Influence in the National Policy Process: Lessons from the 104th Congress

During the last several decades, state officials increasinglyconcluded that their interests are not adequately representedin national policymaking and sought to increase their influencethrough the constitutional amendment process, the federal judiciary,and the political process. This article evaluates the extentto which these institutional mechanisms were effective in advancingstate interests during the 104th Congress. United States Constitutionalamendments were improbable and ineffective devices. Litigationwas slightly more successful, though it provided an uncertainsource of long-term security for state interests. Efforts towork through the political process, either through securingthe passage of legislation that increases congressional responsivenessor by engaging in direct lobbying, were moderately effectiveunder certain conditions.     

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.     

Civil Servants, Economic Ideas, and Economic Policies: Lessons from Italy

Building on theoretically oriented and empirically grounded research on two key macroeconomic institutions in Italy, this article explains how and why civil servants can engineer major policy changes, making a difference in a country's trajectory. Italy provides a challenging testing ground for this kind of analysis, as it is generally portrayed as a highly politicized system in which political parties and politicians fully control public policies. Three general lessons can be learned, the first being that the role of civil servants in changing modes of economic governance depends on the resources that they master in the system in which they operate. "Intangible assets" are of primary importance in complex and perceived technical policies, such as monetary and exchange rate policy, which have high potential for "technocratic capture." Second, in these policies, certain intangible assets, such as specific bodies of economic knowledge or policy paradigms, have a considerable impact on policy making. Third, besides interactions in international fora, the professional training of civil servants is a mainstream way through which economic policy beliefs circulate and gain currency, laying the foundations for policy shifts. By highlighting the importance of the intangible assets of macroeconomic institutions, this research makes an unorthodox contribution to the primarily economic literature on central bank independence.     

Risk,politics, and development: Lessons from the UK's democracy aid

Political risks are inescapable in development. Donors keep them in check with a range of tools, but existing options provide little guidance about how political forms of risk can—or should—shape programme design. This paper presents a novel framework that offers practical guidance on how to think about and manage some of these risks. This is based on a review of programmes delivered by the Westminster Foundation for Democracy, which provides a specific type of aid: democracy assistance. Political forms of risk have a strong influence on that aid, so it provides a valuable example. Our framework centres on two trade‐offs inherent in the provision of aid for democracy support. The first relates to the type of approach employed in a programme; should it focus on a thematic issue or a specific event, or should it focus primarily on an institution and its processes? The second concerns the scope of a programme in terms of who it includes. Understanding the costs and benefits of these trade‐offs will help development practitioners to make decisions about political risks in a more rigorous and transparent way and, potentially, to shift from a culture of risk aversion, to one of informed risk‐taking.     

The Fiscal Consequences of Changing Federal and State Revenue Policies: The Case of Small Oregon Cities

This article examines the fiscal consequences for twelve, smallOregon cities of recent changes in federal and state intergovernmentalrevenue policies. Many small local governments have experienceddouble revenue reverses in recent years—reductions inown-source revenues because of economic decline as well as decreasesin intergovernmental revenues, especially federal aid. The twelvesmall cities are compared with all 241 cities in Oregon andthe 136 Oregon cities in the 1,000 to 49,999 population range.Using aggregate and interview data, a major finding is thatalthough stabilization and/or decline in federal-state revenuesharing and entitlement program funds have accentuated difficultlocal revenue situations, economic decline has been the moreimportant contributor to the fiscal stress of the twelve smallmunicipalities. Most of the twelve cities had limited fiscalcapacity—as indicated by low assessed property valuations—makingit difficult to produce sufficient revenue to meet basic publicservice needs. These cities were also unable to get citizenapproval of increases in property taxes.