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.     

地方治理中的参与式预算——关于浙江温岭市新河镇改革的案例研究

参与式预算是一种公民直接参与决策的治理形式,是参与式民主的一种形式.实施参与式预算,能够促进公共学习和激发公民的权利意识,通过改善政策和资源分配,实现社会公正,以及改革行政机构.在这种直接的、自愿和普遍参与的民主过程中,人们能够平等讨论和决定公共预算、各项政策以及政府管理.在充分吸收国外参与式预算实践的基础上,浙江省新河镇基于国家既有的法律框架,以及民主恳谈的制度平台,开始实施预算改革,扩大了公民参与政府决策的广度和深度,深刻地影响着中国基层民主的发展.在理论分析和实地调查的基础上,运用比较分析的方法,初步探讨了参与式预算在中国地方治理中的兴起与发展,力图为中国地方治理,以及基层民主政治建设提供新的观察视角.     

Separation of powers and political budget cycles

Political budget cycles (PBCs) arise when the electorate is imperfectly informed about the incumbent’s competence and the incumbent has discretion over the budget. Focusing on the second condition, we study how separation of powers affects PBCs in the composition of government spending. We find that the details of the budget process, namely, the bargaining rules, the status quo’s location, and the degree of compliance with the budget law, are critical for the existence and the amplitudes of PBCs. In particular, when the status quo is determined by the previous budget and there is high compliance with the budget law, separation of powers acts as a commitment device which solves the credibility problems that drive PBCs.     

The rule of law and citizenship in central India: post-colonial dilemmas

This article argues that the ‘rule of law’ has become a central goal in popular struggles the world over, and it is citizenship struggles which infuse the rule of law with substantive, as against a thin procedural, meaning. This is especially true in post-colonial societies like India, with a tradition of inherited colonial law designed for subject-hood rather than citizenship, growing inequality which affects both the enactment and interpretation of law, and the violation of law by those who are meant to protect it. Demanding implementation of existing laws, breaking laws that are patently unjust whether through armed struggle or non-violent social movements, or seeking to change laws in favour of new and more democratic laws, are all major avenues by means of which people express their aspirations as citizens. However, law's mutually constitutive relation with social practice means that people enter into political and legal negotiations already constituted as certain kinds of legal subjects, which constrains their imagination in certain ways.     

Implementing PBB: Conflicting Views of Success

A modern budget reform, performance‐based budgeting (PBB) emphasizes the measurement of government performance by agencies and public servants. In this article we define PBB as requiring strategic planning regarding agency mission, goals and objectives, and a process that requests quantifiable data that provide meaningful information about program outcomes. Performance‐based budgeting requirements are now pervasive in the states. Of forty‐seven states with PBB requirements, thirty‐one have legislated the process to be conducted, while sixteen have initiated the reform through budget guidelines or instructions.¹What remains unknown, yet of vital interest to state administrators, their staff, legislators, and citizens, regards implementation status of PBB systems. How many states are utilizing a PBB process as prescribed by law or administrative directive? And if PBB has been implemented, has it been successful regarding improvement of agency effectiveness and decision making about spending? Perhaps most importantly, has PBB influenced appropriation decisions?. This research is based on responses to a mail survey of executive and legislative budgeters regarding the PBB system established in their state. Results discussed in this article consider budgeters’ response about PBB implementation status and effectiveness as conducted. We find that there are differing perceptions across the branches of government regarding both the extent of PBB implementation as well as its success. Results show that states with better‐known PBB systems have not necessarily realized greater success in terms of effectiveness from this budget reform than states with less popularly known systems, at least as perceived by the budgeters included in this article.     

The Impoundment Control Act of 1974: Restraining or Reviving Presidential Power?

The power to impound allows the president to cancel or postpone the spending of appropriated funds. Over the years Congress has struggled with the challenge of maintaining some control over impoundment actions while still allowing sufficient discretion for the president during budget implementation. This article examines the events leading up to the passage of the Impoundment Control Act as Title X of the Congressional Budget and Impoundment Control Act of 1974, and the framework established by the law. It provides some analysis of data on rescissions and deferrals in the period from 1975–1995 and reviews efforts to grant the president expanded impoundment authority, culminating in the passage of the Line Item Veto Act of 1996. On April 10, 1997, the new law was found unconstitutional by a district court, but on June 26 the Supreme Court set aside that earlier decision on jurisdictional grounds, ruling that the plaintiffs (six members of Congress) lacked proper legal standing to bring the case ( Raines v. Byrd , 96–1671). However, the Supreme Court decision was confined to this technical issue and did not address the underlying constitutional questions. Whatever the further legal developments relating to the Line Item Veto Act, the article suggests that the issue of restraining or reviving presidential impoundment power will remain unsettled.     

Do Politicians Listen to Experts? The Budget Enforcement Act of 1990 and The Capacity to Budget

Last year offered a unique opportunity to compare the ideas of experts and politicians. The 1990 Budget Enforcement Act changed the federal budget process. Allen Schick's 1990 book, The Capacity to Budget, included ideas on how to improve budgeting at the federal level. A comparison is made between the new law and the new ideas in several areas of the budgetary process: deficit reduction; resource rationing; adjustment to changing expenditures; increasing budget honesty; decreasing conflict; rou-tinizing the process; integrating the parts of the budget; and balancing claims and resources.     

Tax Expenditure Reporting: The Utilization of an Innovation

Central to this article is the question, “Are tax expenditure reports used?” State legislators serving on tax committees in ten states were surveyed regarding their use and their perceptions of others' use of tax expenditure report information. Responses indicate (1) strong acceptance and broad use of report information; (2) purposes and policy stages of use characteristic of technical information use; and (3) use focused predominantly on resource acquisition (revenue) policy rather than resource allocation (budget) policy. Thus it appears that tax expenditure reporting does not operate to secure budgetary control over tax expenditures, and consequently tax expenditures continue largely to escape budget scrutiny.     

The Policy Constraints of Deficit Reduction: President Clinton's 1995 Budget

The federal budgeting process is now limited by deficit reduction policy constraints. This article examines the FY 1995 budget requests within the context of long term budget trends, changes in the federal budget process, and the recently established political and fiscal budget constraints. It further examines enactment of the Omnibus Budget Enforcement Act of 1993, the policy changes it contained, and its further tinkering with the process of budgeting. Finally the article evaluates the first budgeting process of the Clinton administration and their initiatives in deficit reduction following these policy constraints.     

Law-and-economics: why Gordon Tullock prefers Napoleon Bonaparte over the Duke of Wellington; and why he may end up on St. Helena

Most scholars in the field of law-and-economics lean to the view that the common law is efficient. Tullock, however, argues that the common law is inefficient and suggests dramatic modifications to the American legal system, transforming it from a common law system to a civil code system and abandoning the adversarial proceedings in favor of an inquisitorial process. This essay summarizes and critically evaluates the thrusts of Tullock’s 1988 article and his 1997 book, which, together direct a full-frontal attack on the Anglo-Saxon common law system.     

Budget institutions and taxation

While a number of different studies have explored the effects of budgetary procedures and the centralization of the budget process on government debt, deficits and spending, few of them have explored whether such fiscal institutions matter for public revenue. This article argues that centralizing the budget process raises the levels of taxation by limiting the ability of individual government officials to veto tax increases in line with common-pool-problem arguments regarding public finances. Using detailed data on budgetary procedures from 15 EU countries, the empirical analysis shows that greater centralization of the budget process increases taxation as a share of GDP and that both the type of budget centralization and level of government fractionalization matter for the size of this effect. The results suggest that further centralizing the budget process limits government debt and deficits by increasing public revenues as well as constraining public spending.     

略论传统中国严格执法的阻抗因素

法制是传统中国政治的重要组成部分，但严格执法却做得不够，甚至不大讲究。问题在于：传统中国是君主专制国家，奉行人治、礼治而非法治，其间阻抗严格执法的因素很多。主要表现为：法自君出，而君权无限，君、臣常漠视成法；德主刑辅，礼法冲突时，则屈法伸礼；法律虚无，狱吏位卑，舞文弄法、出入人罪；立法技术上的一些问题也使成法难守易破。这些因素共同作用，严格执法不仅难，而且无法克服。这使法律缺乏应有的威信与尊严，其消极影响是现代法治建设应当着力避免的。     

Is the U.S. Congress an Insurmountable Obstacle to Any “Far‐Sighted Conception of Budgeting”?

In recent years, Congress has recurrently failed to meet its minimum responsibilities in federal budgeting. This article analyzes whether it is possible to repair this problem, using concepts popularized by Allen Schick in his influential article “The Road to PPB.” His article compared the PPB reform effort to the history of budget process reforms that started with the design of the executive budget. It publicized a logical sequence of budget process improvements that started with control and then advanced through management and planning. The article did not substantially address the role of Congress, but eight years after it was published, Congress reasserted its constitutional role in the budget process. Its record of performance since then has ranged from mixed to dysfunctional. The Congress has been criticized for budgetary delays, micromanagement, myopia, procrastination, indiscipline, and an inability to prioritize intelligently. If these faults are set in stone, then an integrated system of budgeting, as described in “The Road to PPB” and related work, is unattainable. On the other hand, if reform of Congressional budgeting is politically feasible, improvements to that system can utilize the unique contributions that a legislature can make to a good system of budgeting.     

Lobbying by Law Firms: A Study of Lobbying by National Law Firms in Canberra1

This article examines the way in which national law firms lobby the federal government from their Canberra offices. It is based on extensive interviews with lobbyists from those law firms, other commercial lobbyists in Canberra and legal professional bodies. The article begins by establishing the unique nature of law firm lobbying. In particular, it looks at the technical skills law firm lobbyists possess, their access to specialist legal knowledge and their preference for administrative, over political, lobbying. The development of law firm lobbying is then discussed. This centres around changes to the legal profession, federal business laws and federal government decision-making. The article concludes by suggesting that law firm lobbying both reflects and stimulates changes in government decision-making and will grow in importance as the legal profession in Canberra grows.     

Budget Stabilization Fund: Structural Features of the Enabling Legislation and Balance Levels

This article examines what leads to high balances of the budget stabilization fund (BSF) to make it a countercyclical fiscal tool. Checking state BSF laws, this article classifies BSF structural features into purposes, funding sources, balance caps, and use approval procedures. Using panel data (1979–1999) and controlling for related variables, this article tests the features' effects on BSF levels over the sample period and different phases of the economy to identify specific effects of the features in boom and lean years. The article also forwards policy recommendations for state governments to consider in designing or revising their BSF legislation.     

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.     

The Evolution of Budgetary Institutions in Estonia: A Path Full of Puzzles?

This article examines the evolution of budgetary institutions in Estonia between 1993 and 2008, with a main focus on rules governing the preparation, adoption, and implementation of the state budget. It discusses the initial choice of budgetary institutions in 1993 and subsequent developments in the light of theoretical propositions put forth by the fiscal governance literature. The case of Estonia poses a number of puzzles, and the article seeks to explain the institutional choices in Estonia: Why did the coalition government opt for a delegation mode of fiscal governance in 1993? Why has the preparation phase of the budget process evolved toward a contracts approach from 1994 onward, while the adoption phase has moved closer to a delegation mode? The article demonstrates that alongside government type, institutional choices can be influenced by lesson‐drawing from history, examples of other countries, and negative experiences gained in legislative budget process.     

Electoral system innovation: A comparison of the lower saxony electoral laws of 1946 and 1977, their origins and effects

This study is concerned with two electoral laws introduced in Lower Saxony for local government elections: the first post-war law (1946) introduced by the British occupation authorities, and the most recent (1977) law, the product of the CDU-FDP coalition in Lower Saxony, used for the 1981 local government elections. The background to each of these laws is presented, with emphasis on their political context and the goals sought by the authorities of the time. The article then examines the actual effects of each law, and explores some of the unintentional effects that emerged. The conclusion sets the problem of electoral-system innovation in the wider context of the relationship between electoral change and political behaviour.     

Managerial Necessity and the Art of Creating Surpluses: The Budget-Execution Process in West Virginia Cities

Budget execution traditionally has been defined as a straightforward process of implementing the budget as approved. Research into the process has been limited, particularly with regard to local government budgets. This article examines the rebudgeting process using a case study of 15 West Virginia cities. Rebudgeting displayed a consistent pattern for the various budget categories—personnel, contracts, commodities, capital, and contributions—closely resembling the "increase-then-decrease" pattern seen in the overall budget. Empirical data on budgetary adjustments and structured interviews with city finance officials helped to describe budget changes and explain probable causes and effects of behavior during budget execution for these smaller cities. Budget changes were found to be the result of managerial necessity and the exercise of discretion to generate and distribute surpluses.