Policy Punctuations in Danish Local Budgeting

The central prediction in Baumgartner and Jones' (1993) punctuated equilibrium theory is that over time, public policy will be characterized by a certain pattern of stability now and then interrupted by punctuations. This paper extends the study of punctuated equilibrium theory in two ways. First, I examine whether this prediction is met in a non-US-based political system like Danish local government. Second, I conduct a comparative investigation of stability and punctuations in four public policy areas chosen for theoretical purposes. Using a stochastic process approach, my findings are that the annual local budget changes, as expected from the punctuated equilibrium theory, are characterized by a certain pattern of stability and punctuations. Equally interesting, however, is the fact that the analysis also reveals some systematic underlying variation, enhancing our understanding of just where budget punctuations are particularly likely to occur, something former studies on punctuated equilibrium theory have not elucidated.     

The Fiscal Effects of Aid in Ethiopia: Evidence from CVAR Applications

ABSTRACT

This article explores the fiscal effects of aid in Ethiopia using the Cointegrated Vector Auto-Regressive (CVAR) methodology to model complex long-run and short-run dynamics. We use national data for 1961–2010, including a measure of aid capturing flows through the budget as measured by the recipient. The data suggests three main conclusions on the long-run equilibrium. First, government long-term spending plans are based on domestic sources, treating aid as an additional source of revenue. Second, both grants and loans are positively related to tax revenue. Third, aid is positively associated with spending, with a particularly strong relation between capital expenditure and grants. Overall, our results show that aid in Ethiopia had beneficial fiscal effects.     

PATH DEPENDENCY AND INSTITUTIONAL CHANGE: THE CASE OF INDUSTRIAL EMISSION CONTROL IN SWEDEN

Theory‐independent measures of institutional change can be developed by identifying and tracking changes in institutional reproduction mechanisms. Such measures can then be used to assess the empirical validity of theoretical models of institutional change. This article performs an analysis of reproduction mechanisms in a case study of a Swedish institution for emission control during the period 1960–2000. The analysis reveals the existence of a highly path dependent institutional development, powerful enough to withstand a wide‐ranging institutional reform implemented in the late 1990s. The case study supports a gradualist model over a punctuated equilibrium model of institutional change, but the analysis also demonstrates the need for path dependency theory to pay greater attention to the question of how micro‐level institutional interaction generates aggregate patterns of change and stability.     

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.     

Agenda and Public Policy: Evidence From Chile

Based on Kingdon’s model and the punctuated equilibrium theory, this article analyzes the process of four Chilean public policies from 1990 to 2013. Evidence was collected from 205 interviews, official documents, 3,905 press clippings, and academic literature. Grounded theory was employed to analyze interviews. The analysis shows a tacit alliance between power and expert knowledge, that presidential motivation seems to be a key factor for an idea to be included in government agenda, that Chile’s policy-making process is rather elitist, and that its characteristics coincide with the “inside access model of agenda building.”     

EXPLAINING RADICAL POLICY CHANGE: THE CASE OF CLIMATE CHANGE AND ENERGY POLICY UNDER THE BRITISH LABOUR GOVERNMENT 2006–10

An innovative framework combining the ‘multiple streams’ (MS) and ‘punctuated equilibrium’ (PE) models of agenda‐setting is used to explain the transformation of UK climate change and energy policy under the Labour Government between 2006 and 2010. The coupling of the problem, politics and policy streams by policy entrepreneurs (MS), and changes in policy image and institutional venues (PE), were critical in opening a policy window, disrupting the existing policy monopoly and enabling radical policy initiatives. The case study suggests two revisions to the models: (1) policy windows can remain open far longer than either model typically predicts; and (2) party politics, especially where party competition generates a ‘competitive consensus’, can be important for both initiating and prolonging policy change in parliamentary systems. An important factor typically overlooked by both models is the significant policy entrepreneurship role that government ministers can play, particularly when an issue becomes part of their ‘narrative identity’.     

Regional Agricultural Endowments and Shifts of Poverty Trap Equilibria: Evidence from Ethiopian Panel Data

We examine changes in patterns of equilibria over time and across regions, applied to the Ethiopia Rural Household Survey. We revisit incidence of multiple equilibria using new nonparametric techniques, and examine single equilibria that remain stagnant below the poverty line. Using quantile regressions, we identify differences across the income distribution. We introduce the empirical analysis of sequences of equilibria. We identify a single equilibrium in 1994–1999 but find a second, higher equilibrium emerging in 1999–2004 – evidencing a shift from unimodal toward a bimodal asset distribution. The most deprived region exhibits a low-level stagnant equilibrium despite significant rural income growth nationwide.     

An enterprising municipality? Municipalisation,corporatisation and the political economy of Birmingham City Council in the nineteenth and twenty-first centuries

English local authorities not only have a high level of path dependency but also are capable of significant path-breaking innovations. Conventional ‘great man’ and punctuated equilibrium explanations of path-switching undervalue material factors. Theoretical sampling is used to develop and illuminate the way in which material conditions impact two significant changes in the institutional path of Birmingham City Council – the late nineteenth-century municipalisation of private providers (gas and water) and the early twenty-first century corporatisation of public services (back-office functions, building control, educational support, and museums and art galleries). Data are drawn from secondary sources including Council documents and contemporary accounts. Centrifugal pressure in the early twenty-first century result in arm’s length companies offering greater financial resilience. This contrasts with late nineteenth-century centripetal pressure to minimise the patchwork of private providers and trade for a wider public benefit.     

Triadic Power Relations in Rural Nepal

We generalise Basu's model of triadic power. For one landlord and multiple merchants the landlord's threat towards a labourer becomes credible in the original stage game. For multiple landlords and merchants we generalise more recent solutions. We estimate a reduced form of the model, where equilibrium rural wages are a function of the number of landlords, distance to merchants, characteristics of the labourers and the distance to external markets. We apply Living Standards Measurement Study data from Nepal, and find support for the triadic model. In particular, the influence via the merchants depends on the number of landlords.     

Big change,little change? Punctuation,increments and multi-layer institutional change for English local authorities under austerity

This paper draws on new institutionalist theories to consider how we might characterise the process and outcomes of change occurring in English local government as a result of the UK’s austerity policies. It uses national and local empirical data to argue that changes are best understood as multi-layer processes, whereby radical ‘punctuated’ shifts in national funding can be mitigated to incremental adjustments in service delivery at a local level. However, the paper also suggests that the incremental appearance of change may be temporary, and that diminishing institutional resilience and emergent discursive shifts potentially prefigure a paradigm change in local governance.     

Performance Management and Deficit Adjustment in U.S. Cities: An Exploratory Study

Performance management or PM has been promoted as a tool to transform government. Claims that PM will enable governments to “do more with less,” “increase efficiency,” provide “value for money,” and make “rational budget decisions” abound. Has PM helped city governments in the United States cope with the effects of the 2007–2009 Great Recession? Theory suggests that PM can provide the informational and analytical foundation necessary for city officials to implement comprehensive but conflictive budget-cutting and revenue-raising strategies. By facilitating deep expenditure cuts and tax increases, PM can indirectly influence budget deficits. Using data from a national survey of city governments and multiyear audited financial reports, the empirical analysis shows that PM cities favored what are essentially decremental responses to fiscal crises that lead to marginal changes in revenues and expenditures. Not surprisingly, there is no evidence that PM influences the size and change in budget shortfalls.     

Professionalism and public administration: A bibliography

Abstract

This paper tests public budgeting to ascertain if it has both a long‐run equilibrium and short‐run incremental process. In the model, the decision‐maker strives to achieve budgetary balance over the long‐run but is constrained in the short‐run and follows incremental decision‐making. The interaction between expenditures and revenues, along with several control variables, is tested for each of the Canadian provinces using data between 1961 and 2000. The results show that in the long‐run, expenditures force the budget toward balance in all the provinces with the exception of British Columbia. In that province, there was a fiscal synchronization of revenues and expenditures working in combination. In the short‐run, incrementalism occurs in nine of the ten provinces.     

Mid-year appropriations in georgia: allocating the “surplus”

Utilizing appropriations data, this article analyzes the mid-year budget amendment process in Georgia. Economic factors are found to account for a sustained pattern of budget expansion from one year to the next between 1977 and 1986. Revenue estimating practices are found to contribute to mid-year increases in state agency appropriations. Patterns of agency success in the mid-year budget amendment are found to be associated with success in the previous mid-year amendment. The article concludes that legislators, the executive, and executive branch agencies have come to regard the mid-year budget amendment as a regular part of the state's budgetary process.     

Biased Budgeting in the Public Sector: Evidence from Italian Local Governments

Abstract

The purpose of this paper is to analyse, in terms of presence, determinants and purposes, the misrepresentation of expected revenues during budget formulation and the misrepresentation of actual revenues during budget execution. To this end, we use six-year panel data from Italian municipalities with populations above 15,000. Our results suggest that overestimations of current revenues are more frequent than underestimations, during both budget formulation and budget execution. In terms of determinants, our results highlight the impact on revenue misrepresentation of both political orientation and fiscal stress. Finally, in terms of purposes, we show that revenue underestimation during budget formulation and revenue overestimation during budget execution may contribute to the formation of surpluses. The former, in particular, may allow mayors to create a ‘war chest’ in non-election years, which can then be used to increase net borrowing on the eve of elections.     

Turnover,Trust, and Transfers: An Examination of Local Government Budget Execution

Abstract

Studies of budget execution focus either on the procedural aspects of internal controls and adjustments or the necessity of the changes made in the original budget. Adjustments made on an ongoing basis without undermining the integrity of the budget has been generally seen as a necessary means of creating flexibility while maintaining appropriate controls. In this context, our article addresses one aspect of the local government budget—whether turnover in key leadership and professional position affects the amount of transfer and reprogramming made during the execution process. Based on surveys of municipal budget offices in the Greater Cincinnati area, we report that turnover in some leadership positions does affect budget transfers. This finding also supports the proposition that the stability of key budget roles is an important factor in the budget execution process.     

AN INFORMATION PROCESSING PERSPECTIVE ON DECISION MAKING IN THE EUROPEAN UNION

Two decades after the introduction of the punctuated equilibrium model, information processing theory now offers one of the most comprehensive analytical perspectives on decision making in public administration and policy research. This article applies information processing analysis to the decision making process in the European Union (EU). Towards this end, the article inquires into the organizational foundations of information processing at successive levels of administrative and legislative decision making and shows how this analytical perspective can be used to gain a better understanding of policy dynamics at the supranational level. The article argues that information processing in the EU is likely to produce distinct policy dynamics in key respects. It identifies promising avenues for future research and discusses some of the issues this evolving theoretical framework should address in order to allow for a more comprehensive exploration of this analytical perspective in the context of the EU.     

Managing the Budgetary Process in a Hung Council

This paper examines the impact of a change in 1994 from majority control to no overall control on the operation of a strategic medium-term budget and policy plan-ning process in Kirklees MBC. Six hypotheses are set out regarding the changes that might have been anticipated in the budget process, in the light of recent trends in the approach to budgeting in British local government, and the particular political context and recent political history of the authority. Use is made of a diary kept by a participant observer (who is also one of the authors) to document and analyse key events in the budget process. The six hypotheses are examined against the evi-dence, and with some exceptions are confirmed. It is concluded that Kirklees's well-structured budget process did survive the transition to no overall control, but not without considerable difficulty. Careful management from the Executive Board, especially in brokering discussion, was a critical factor and highly advantageous to the success of the process.     

MODELLING BUREAUCRACY: THE CASE OF THE AUSTRALIAN FEDERAL BUDGET SECTOR 1982-1992

A substantial literature exists on the economic analysis of bureaucracy, which includes formal models of bureaucratic behaviour by Niskanen (1971) and Dunleavy (1991). This article develops hypotheses from those models about changes in size of bureaux over time and tests them against data on the Australian federal budget sector in 1982–83 and 1991–92. The models predict that bureaucrats usually will be able to influence the size or structure of their bureaux in line with their personal preferences. However, the Australian data suggest that the extent of such influence may be less than is assumed in either model and that the preferences of politicians are more influential than the models allow. One conclusion is that, if bureaucracy is to be modelled, a principal-agent approach will have more to offer than the neo-classical maximizing framework adopted by Niskanen in particular. A further conclusion, at odds with those of Niskanen and weakening his case for wholesale privatization, is that bureaucratic dysfunctions may be amenable to reform of the political and bureaucratic rules and systems.     

Citizen Preference and Resource Allocation: The Case for Participatory Budgeting in Seoul

This article seeks to measure the extent to which the service priorities of citizens of Seoul, South Korea, are reflected in corresponding resource allocations in the city's budget, despite there being virtually no participation by citizens in the budget creation process. We find a less than perfect congruence between budget allocations and citizen preferences at both the city and district level. Given these results, we discuss the potential for participatory budgeting to address discrepancies in resource allocation by focusing on the unique demographic and cultural makeup of Seoul constituencies.