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.     

Explaining public education expenditure in OECD nations

Abstract. This article seeks to explain cross-sectional variation in public education expenditure levels and change since 1960. Five possible explanations are located: the incremental push of programme inertia, demographic and related pressures, economic resource growth, the impact of party and the cultural impact of Roman Catholicism. A multivariate analysis demonstrates that educational expenditure is an arena in which monocausal explanations are wholly inappropriate. With the exception of programme inertia, each of the explanations is seen to have an important bearing on this aspect of the people's welfare.     

Incremental and cyclical developments in public expenditure in West Germany

Abstract. The 'cyclical' effect covered in this paper deals with the development of public expenditure in West Germany in combination with the timing of elections. The underlying hypotheses on the cyclical development of certain expenditures are based on the 'New Political Economy' literature. This approach is then contrasted with the theory of budgetary incrementalism, an alternative mode of explanation of public sector growth. The data are tested to see whether a cyclical or linear model is more appropriate for describing public expenditure developments.     

Tests of institutional versus non-institutional models of local public expenditure determination

Are institutional or non-institutional factors more important determinants of local public expenditure decisions? Employing data that allows us to directly identify the entire distribution of voter expenditure demands, we estimate models of deviations of actual expenditures from the expenditure demand of defensible benchmarks — namely, the median voter's expenditure demand and the mean of voters' expenditure demands. Three competing paradigms are employed to specify these models; namely, a non-institutional model, the reform government movement's explanation of how institutions affect local government decisions and a transactions-cost model of this same phenomenon. Predictions from these three competing models differ in many respects. Comparisons of results from estimating models of expenditure deviations are found to be generally more consistent with the non-institutional model than with either of the two institutional models. These results suggest that a competitive local public service market helps limit the ability of governments to tax and spend in excess of the demands of the median or mean voter.     

Long swings in the growth of government expenditure: an international historical perspective

Public Choice - Adopting an international historical perspective, this study aims to identify the main empirical regularities in the long-run growth pattern of government expenditure. The...     

Productivity growth and funding of public service broadcasting

In this paper we demonstrate how standard techniques for measuring productivity growth can be applied to the broadcasting sector to provide a benchmark for reasonable efficiency savings which public finance officials might expect public service broadcasting (PSB) to achieve. Using establishment level data from the UK, we produce estimates of productivity growth amongst commercial broadcasters between 1999 and 2003, which provide some evidence that improvements to PSB can reasonably be expected to be funded by efficiency savings rather than solely by increases in public funding.     

Theorizing about public expenditure decision-making: (as) if wishes were horses ...

There have been several attempts to compare different approaches to modelling public expenditure decision-making. This paper is an extended comment on one such attempt: Fred Thompson and Richard Williams, A Horse Race Around a Möbius Strip: A Review and a Test of Utility Maximizing and Organizational-Process Models of Public Expenditure Decisions. In a commentary mode, we: (a) examine why tests of the sort that Thompson and Williams offer are neither definitive in choosing between models nor very useful in improving models; (b) outline a more meaningful test procedure; and (c) offer a somewhat more critical view than Thompson and Williams of the utility-maximizing approach to modelling public expenditure decisions.A comment on Fred Thompson and Richard Williams, A Horse Race Around a Möbius Strip: A Review and A Test of Utility-Maximizing and Organizational-Process Models of Public Expenditure Decisions, in this issue of Policy Sciences.     

Evaluating public expenditure management systems: An experimental methodology with an application to the Australia and New Zealand reforms

This article examines how institutional arrangements affect the size, allocation, and use of public expenditures. It identifies a set of arrangements that can address underlying problems and affect three levels of expenditure outcomes - aggregate fiscal discipline, strategic prioritization, and technical efficiency in the use of resources. A diagnostic questionnaire is constructed which produces index values for each arrangement. This methodology is used to analyze the radical reforms introduced by New Zealand and Australia. The results show that New Zealand sought to achieve aggregate fiscal discipline and enhance technical efficiency through formal mechanisms for transparency and accountability. The Australian reforms sought to improve strategic prioritization through transparency of the medium-term costs of competing policies, and the devolution of detailed program decisions to line ministries within hard budgets.     

Economic growth and alternative deficit-reducing tax increases and expenditure cuts: A cross-sectional study

This paper assesses empirically the relative desirability of alternative deficit-reducing tax increases and expenditure cuts in terms of their individual impact on economic growth, using cross-sectional data for a sample of 21 developed countries for the period 1972–81.Property taxes are by far superior to deficit financing, and are the best choice for implementing deficit-reducing tax increases. Income taxes and domestic taxes on goods and services, which are as bad for growth as are deficits, rank second with no difference between them. Foreign trade taxes are even worse for growth than are deficits, and are the worst choice for reducing deficits.     

The provocative public sector: Domestic political protest and public sector growth in the OECD, 1965–1982

The results shown in Tables 1 through 8 above are consistent in that %GG is repeatedly shown to be significant whether making cross-national comparisons of DPP or predicting intra-national variations over time. Therefore, Hypotheses 1a and 1b are confirmed. The confirmation of Hypotheses 2a and 2b shows that, taking into account public sector size, government growth is most provocative in countries where it represents a major socio-economic change (i.e., where the public sector is small). Government growth has a neutral impact where the role of the public sector is long-established (i.e., where the public sector is large).Hypotheses 3a and 3b posited that average and annual rates of economic growth would be inversely associated with domestic protest. These hypotheses, too, were confirmed. The belief that economic growth rates would clearly provide the margin of affordability for public sector growth was not confirmed, as the coefficient of the interaction term (%GG*%GDP) was not statistically significant.     

An economic analysis of the voting on Michigan's tax and expenditure limitation amendment

This paper investigates electorate behavior on Proposal C, a proposed amendment to the Michigan constitution, whose passage would have limited taxes and expenditures in the State of Michigan. Voting behavior was analyzed within the framework of the basic hypotheses: that the electorate tended to vote on Proposal C in its economic interests, narrowly conceived. The results were contradictory, with some groups voting against their economic interests and others voting as the hypothesis would predict. Further, a relatively low percentage of the total voting variance was explained, indicating that perhaps other variables than economic ones influenced voting behavior.