Federal Grants, Earmarked Revenues, and Budget Crowd-Out: State Highway Funding

This paper examines the potential for budget crowd-out in state highway financing. Highway projects are funded primarily through state earmarked tax revenues and federal highway grants. Theoretically, these two sources of revenues could crowd-out state general funds, freeing up these funds for other uses. Previous studies of highway funding show little evidence of significant crowd-out, providing support for the "flypaper effect." The empirical model of this paper better controls for the endogeneity of federal highway grants and state earmarked highway revenues than previous studies and results suggest little to no crowd-out. Also, our study concludes that state budgeting decisions in the post-Intermodal Surface and Transporation Efficiency Act era still support the "flypaper effect."     

What's New about the New Public Management? Administrative Change in the Human Services

Interpretations of the emergence of the New Public Management are split. The champions of the movement present it as a new administrative paradigm that departs sharply from past thinking and practice, whereas skeptics argue it has evolved incrementally from past administrative traditions. To assess these views, this article examines recent administrative innovations in the human services that broadly reflect the New Public Management. The findings suggest that these innovations have built incrementally on past reforms in the human services field, supporting the skeptics' claim that the New Public Management represents an evolution and renewal of historical trends in public administration.     

Earmarking as a Strategy Against Budgetary Constraints: San Francisco's Children's Amendment

The passage and implementation of the San Francisco Children's Amendment, or Proposition J, in 1991 represents an important expansion of the increasingly common strategy of budgetary earmarking by human service organizations. The core of the initiative was a city charter amendment that earmarked a portion of existing property taxes and established a baseline budget for children's services. Of these provisions, the baseline budget has proven most important in preserving children's services and preventing any substitution effects in a time of increasing fiscal stress for the city/ county of San Francisco. This case also illustrates the role of a strong political appeal in passing technical budgetary initiatives over the objections of elected officials and others. While there was concern about the reduced flexibility created by earmarking a city's budget during a period of retrenchment, this concern was overlooked because of the overwhelming political support for the children's cause. However, conflict between groups was created by the measure as groups fought to be included in the provisions of the amendment and over whether each group had obtained its fair share of funding.     

The Health Care Safety Net and the Affordable Care Act: Implications for Hispanic Immigrants

There are currently more than 11 million undocumented immigrants in the United States; the majority of them are of Hispanic origin. This article shows that Hispanic immigrants in the Greater Richmond, Virginia, area rely heavily on free clinics for basic health care services. Free clinics do not receive any public funding and thus face reduced government regulation. As a result, these clinics typically present fewer barriers to undocumented immigrants seeking care. Although free clinics function outside the mainstream of government funding for health care services, the Patient Protection and Affordable Care Act (ACA) of 2010 is so broad and far‐reaching in its scope and potential application that free clinics cannot escape its grasp once the new law is fully implemented. Because the ACA does not provide insurance coverage to undocumented immigrants, free clinics will remain their primary sources of care and treatment. Consequently, those responsible for implementing the ACA should consider the impact on free clinics.     

Innovations in the provision of public goods and services

Current efforts at administrative reform in both developed and developing countries have invariably focused on the critical issue of provision of public goods and services. The accumulated experience and attendant innovations are therefore vast. Few attempts have been made to pull this experience together and draw salient features which might be of use to newcomers to the task of improving provision of public goods and services. This article draws on a panel of experts and government officials convened by the author who have reflected and/or experimented with innovative approaches to public good and service provision. After discussing the role of the state, market and civil society relative to public goods and services, the article lays out a set of basic institutional options for innovations in provision. The article concludes with some strategic considerations on the sequencing of steps to achieve successful market-based innovations in the provision of public goods and services in the context of the minimalist and the strong but restrained state. © 1998 John Wiley & Sons, Ltd.     

Lockbox Government: Segregated Funding Strategies and the Decline of Governmental Flexibility

Proponents of "reinvention" assert that it will produce governments that are more agile, better able to adapt to rapidly changing conditions, and able to produce public services at much lower cost. However, attempts to make government "work better and cost less" have had limited success. Policy-makers have consequently invested their creative energy in another class of institutional innovations: segregated funding strategies, which protect agencies and programs from the impact of fiscal restraint by excluding them from normal budgeting processes. The proliferation of budget "lockboxes" may actually introduce new rigidities into the public sector and erode democratic influence in policy-making. On the other hand, there may be some circumstances in which these devices can be justified as a method of ensuring that critical long-run interests receive appropriate attention.     

Innovation and the cost of mortgage credit: A historical perspective

Abstract

Since the inception of U.S. institutional mortgage lending in the 1830s there have been major changes in mortgage instruments, the delivery system, and funding sources. Some of these changes qualify as innovations that have lowered the cost of credit and increased its availability. This article divides the history of U.S. mortgage finance into three periods and identifies the source and type of major innovations.

The “Origins” period, from 1831 to 1931, included the development of many mortgage lending institutions and instruments. The second era, “A Wonderful Life,” featured a government‐supported special circuit that dominated mortgage finance from 1932 to 1981 and witnessed development of mortgage‐backed securities. The current era, “A Brave New World,” features a new system of credit delivery dominated by specialized institutions and technology. In it, application of automated underwriting and artificial intelligence may have far‐reaching effects on the market and the accessibility of low‐income households to mortgage credit.     

Support for Earmarked Public Spending on Culture: Evidence from a Referendum in Metropolitan Detroit

Using the precinct‐level voting results of a 2002 referendum in Metropolitan Detroit to increase property taxes, with the proceeds earmarked for cultural institutions, this paper inquires into the pattern of voting support for an increased public funding of culture. The estimation matches voting precincts to census tracts, and employs tract‐level economic and demographic data. Results are compared with public opinion survey data from the United States and a similar referendum in Switzerland.     

Who Is Helping the Homeless? Local, State, and Federal Responses

This article examines the sources of support for services forthe homeless. It delineates the extensive role of the privatesector in both funding and actually delivering shelter, meal,and other services for the homeless. It also indicates the extentto which certain states are providing financial support forhomeless services, and the relation of new federal efforts throughprograms funded by the Stewart B. McKinney Homeless AssistanceAct to state and private activities.     

Real and perceived effects of changing the grant system from specific to general grants

The paper is based on a study of the 1993 Finnish grant reform, changing from a system with earmarked matching grants to a system with general, non-matching grants. The analysis of cross-sectional data confirms the “fly-paper effect” and also that matching grants have a stronger stimulating effect than non-matching grants on local expenditure. The fly-paper effect is then modified to take account of the distribution of power inside local government. The change to general grants without central government supervision might mean more power to the central management in the local government and a diminished power for sector officers and groups dependent on the sector services. Perceptions of principal actors in the local government budget process were that the reform changed the distribution of power, in some municipalities to the disadvantage of locally small weak groups that could benefit under the old system of earmarked matching grants.     

Local feminist policy networks in the contemporary American interest group system

The emergence of local feminist policy networks is set within the context of the New Federalism of the Reagan-Bush administrations and the transformation of the U.S. interest group system over the past three decades. A case study of policymaking in a single urban setting focuses on changes in four policy areas of special interest to women: sexual assault, domestic violence, child care, and displaced homemakers. Single-issue feminist policy networks, composed of feminist advocacy groups, women-run services, local elected officials, and urban bureaucrats responsible for delivering, funding or regulating each policy, have formed around these issues. Each is characterized by: responsive policy changes; frequent interactions between local legislators, bureaucrats, and feminists; interlocking directorates; a symbiotic support system; diverse strategies and funding sources; and a federal-type organization. Local feminists have been incorporated in a new group universe embedded within a complex system of intergovernmental grants, contracts, and mandates. These networks help to sustain feminism and its public policy agenda through crises and challenges.     

The Institute for Fiscal Studies Report: English Council Funding: What’s Happened and What’s Next?

The article reviews the recent Institute for Fiscal Studies (IfFS) report, English Council Funding: What’s Happened and What’s Next. The article provides an overview of the main themes and findings of the report which examines the consequences of a sustained period of austerity for English local government and the impact of austerity on certain key council services. The article explores what the report has to say about the way councils have responded to reductions in government funding and the strategies they have developed to protect certain frontline services. The article reviews the suggestions made in the IfFS report for changing English local government funding and finds that they reflect a form of centralist thinking which lacks a radical edge when it comes to reform.     

The evolution of Japanese employer-sponsored retirement plans

This article examines the development of Japanese voluntary employer-sponsored retirement plans with an emphasis on recent trends. Until 2001, companies in Japan offered retirement benefits as lump-sum severance payments and/or benefits from one of two types of defined benefit (DB) pension plans. One type of DB plan was based on the occupational pension model used in the United States before the adoption of the Employee Retirement Income Security Act of 1974 (ERISA), but lacked the funding, vesting, and other protective features contained in ERISA. The other type of DB plan allowed companies to opt out of the earnings-related portion of social security, commonly referred to as "contracting out." Landmark laws passed in 2001 introduced a new generation of occupational retirement plans to employers and employees. One law increased funding requirements and enhanced employee protections for employer-sponsored DB plans, while a second law introduced defined contribution (DC) plans for several reasons, chiefly to increase retirement savings and help boost Japanese financial markets. These laws complemented earlier changes in the tax code and financial accounting standards already affecting employer-sponsored retirement plans. As a result, new retirement plan designs will replace most prereform era company retirement plans by 2012. In 2001, the experience of 401(k) plans in the United States, where 42 million participants had accumulated more than $1.8 trillion in assets over 20 years, attracted considerable attention among Japanese lawmakers finalizing provisions of the DC pension law. Even with government support and encouragement from the financial services industry, Japanese companies have not adopted these new DC plans in large numbers. As a result, occupational retirement plans in Japan have remained predominantly DB-a surprising development in light of the shift in a number of countries from DB to DC plans observed in recent decades. However, recent proposals to make DC plans more attractive to employers in Japan are likely to be implemented in the near future. This article summarizes the Japanese retirement system, with an emphasis on private-sector employees, and the complementary role played by voluntary employer-sponsored retirement plans; describes the financial pressures that faced retirement plan sponsors in the late twentieth century and the factors motivating the reform of Japanese voluntary retirement plans; examines the 2001 legislative changes that have transformed company retirement plans; and concludes with a review of trends and recent developments in employer-sponsored retirement plans since the implementation of the 2001 pension laws.     

Understanding the changing role of public sector performance measurement in less developed countries

This article develops a framework for understanding changes in the demand for and supply of performance information in public sector organizations in less developed countries (LDCs). New Institutional Sociology (NIS) is used to argue that pressures from specific stakeholders stimulate organizations to produce particular performance information. The article distinguishes three groups of stakeholders (i.e. funding bodies, statutory boards and purchasers), and elaborates on the performance dimensions these stakeholders are interested in. The group of funding bodies, with their interest in financial performance information, used to be the most important group of stakeholders. However, statutory boards and purchasers are gaining importance as a result of recent public sector reforms, which include decentralization, marketization and the implementation of anti‐corruption programs. As a consequence of pressures coming from these stakeholders, new performance dimensions, such as the quality and quantity of services and the political governance structure, will be added to organizations' performance measurement (PM) systems. Whether these and other—often more traditional financial—performance dimensions will be balanced and integrated throughout organizations depends on the power positions of the various stakeholders. The arguments presented in this article intend to stimulate public sector organizations in LDCs to design and redesign PM systems as a response to changing stakeholder interests. Copyright © 2010 John Wiley & Sons, Ltd.     

Commercialisation of state government legal services

Most people who have worked in the public sector for over a decade have experienced dramatic change in the way they do business. For some, the change has been rapid. Others have been able to hold onto traditional methods. One area of business steeped in tradition is the area of legal services. In the Queensland public sector, current changes in the way in which legal services are provided reflect many of the changes that have already occurred in other business units. We should learn from the experiences of others, tap into the needs of those utilising legal services and reflect upon the importance of those traditional values. This article argues that the time for a comprehensive and transparent review of legal services in the Queensland public sector is now.     

From parliamentary pay to party funding: The acceptability of informal institutions in advanced democracies

While direct state funding of political parties has been a prominent theme in cross‐national research over the last decade, we still know little about party strategies to access state resources that are not explicitly earmarked for partisan usage. This article looks at one widespread but often overlooked informal party practice: the ‘taxing’ of MP salaries – that is, the regular transfer of fixed salary shares to party coffers. Building on notions of informal institutions developed in work on new democracies, the theoretical approach specifies factors that shape the acceptability of this legally non‐enforceable intra‐organisational practice. It is tested through a selection model applied to a unique dataset covering 124 parties across 19 advanced democracies. Controlling for a range of party‐ and institutional‐level variables, it is found that the presence of a taxing rule and the collection of demanding tax shares are more common in leftist parties (high internal acceptability) and in systems in which the penetration of state institutions by political parties is intense (high external acceptability).     

Japan's leadership role in East Asian security multilateralism: the Nakayama proposal and the logic of reassurance

Abstract

United States’ foreign policy towards the Asia-Pacific region is set to be fundamentally altered by two developments in Washington's defence policy. The first is the so-called pivot towards the region in terms of overall defence strategy. The second, occurring at roughly the same time, is a move towards a far greater role for advanced conventional weaponry in the US defence posture. We analyse the interaction of these two trends and discusses a central tension between short and long-term challenges, suggesting that, contrary to current developments, either a freeze in the deployment of these weapons programmes or a return to a strategy underpinned by traditional notions of deterrence may well be necessary.     

Problems of Indigenous Community Councils in North Australia

Since 1978 community councils have been able to directly qualify for Northern Territory government funding. Community councils have therefore become instruments for community governance as well as being responsible for delivering municipal services to Northern Territory Indigenous communities. The effectiveness of these councils are influenced by the community/cultural environment and the strategic environment. A community council plays an important role in negotiations between these two environments. The article observes that there is a strong separation of responsibilities in communities between those relating to municipal services and those relating to community/cultural issues and suggests a realignment of supervisory authority and de‐concentration of responsibilities within community councils.     

The Partisan Usage of Parliamentary Salaries: Informal Party Practices Compared

It is widely acknowledged that political parties in European democracies have become increasingly dependent on state resources, most notably direct state funding. Yet cross-national studies on parties' usage of state resources that are not earmarked for partisan purposes, which require the assessment of informal, intra-organisational practices, are still rare. This article looks at one such practice across 33 parties in five European democracies: namely the ‘taxing’ of national MPs' salaries. Under this practice, candidates who enter elected office on a party ticket are obliged regularly to donate a fixed share of their public salaries to party coffers. The empirical analysis shows that the presence of a taxing rule is more likely in parties with a strong extra-parliamentary organisation, while a leftist ideology facilitates the collection of high salary shares from parliamentarians. Moreover, where party entanglement with the state is particularly pronounced, the partisan usage of parliamentary salaries is easier irrespective of their organisational dispositions. Finally, while in unitary systems national headquarters are usually able to monopolise control over national MPs' contributions, in federal systems regional party executives are able to insist on their share of these payments.