Balanced Budget Requirements and State Spending: A Long–Panel Study

Smith, Daniel L.; Hou, Yilin

doi:10.1111/j.1540-5850.2013.12007.x

Cited by 41 publications

(36 citation statements)

References 33 publications

(61 reference statements)

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“…Given the warnings made regarding the impact of the design of fiscal rules on the response of the agents (Azzimonti et al, 2016;Smith and Hou, 2013;Flynn and Pessoa, 2014), the study first identified the relevant dimensions -classification -of the carry-over regulation as it is adopted in Brazil.…”

Section: Methodsmentioning

confidence: 99%

“…The main issue is how constitutional rules for fiscal discipline are effective (Smith and Hou, 2013;Azzimonti et al, 2016), and whether to adopt more or less rigid budgetary rules. Some studies point out that a no deficit carry-over rule (Bohn and Iman, 1996:8) is a more effective rule in comparison to others, when it comes to containing expenses and achieving a balanced budget (Smith and Hou, 2013). However, harsh budget-balancing rules may lead policymakers to take other unregulated actions to deal with fiscal crises, such as asset sales or accounting manipulation, as observed by Costello et al (2017) in state governments in the United States.…”

Section: Literature On Budget Carry-overmentioning

confidence: 99%

“…Comparing states in the US. Mahdavi and Westerlund (2011) and Smith and Hou (2013) conclude that the adoption of carry-over, together with controls over supplementary appropriations is particularly effective in balancing the budget. The reason for this is that governments, when proposing the budget to the appreciation of the legislative branch, as they are preventing from compensating deficit of a fiscal year in the following years, results in reducing spending.…”

Section: Literature On Budget Carry-overmentioning

confidence: 99%

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Restos a pagar e a perda da credibilidade orçamentária

Aquino

Azevedo

2017

Rev. Adm. Pública

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This article discusses the use of unpaid commitments and its impacts on the credibility and transparency of public finances. Based on a typification of the four types of existing carry-over in current Brazilian regulation, the article shows evidence of the emergence of a "parallel budget" in the three levels of government with regulation and external control issues. The development of the balances and enrollment of the unpaid commitments was proxied by the sum of these accounts in the Federal Government balance sheet, as well as in 26 States and the Federal District, and for 4,100 cities. Additionally, the interpretation given by the Courts of Auditors for unpaid commitments usage by governments without financial ballast was observed as well as the level of transparency given by those governments with the larger amounts of unpaid commitments. The results indicate that, besides the growing debt, the weak regulation of unverified unpaid commitments is seriously reducing the credibility and transparency of the budget at all levels of government. Keywords: unpaid commitments; public budget; carry-over; indebtedness; transparency. Restos a pagar e a perda da credibilidade orçamentáriaO artigo discute o uso da inscrição em restos a pagar e seus impactos na credibilidade e na transparência do orçamento público. A partir de uma tipificação dos quatro tipos de carry-over existentes na regulação brasileira, articularam-se evidências do surgimento de um "orçamento paralelo" nos três níveis de governo com aspectos de regulamentação e controle externo. A evolução dos saldos e da inscrição de restos a pagar foi captada pelos saldos dessas contas no governo federal, nos governos de 26 estados e Distrito Federal, e em cerca de 4.100 municípios. Adicionalmente, observaram-se a interpretação dada pelos Tribunais de Contas para a inscrição em restos a pagar sem lastro financeiro, assim como o nível de transparência dada pelos governos com maiores saldos de restos a pagar. Os resultados indicam que, além do crescente endividamento, a fraca regulação sobretudo dos restos a pagar não processados está reduzindo seriamente a credibilidade e a transparência do orçamento em todos níveis de governo. Palavras-chave: restos a pagar; orçamento público; carry-over; endividamento, transparência. Compromisos pendientes y la credibilidad del presupuesto públicoEl artículo debate el uso de la inscripción en restante a pagar y sus impactos en la credibilidad y en la transparencia del presupuesto público. A partir de una tipificación de los cuatro tipos de carry-over existentes en la reglamentación brasileña, se articularon evidencias del surgimiento de un "presupuesto paralelo" en los tres niveles del gobierno con aspectos de reglamentación y control externo. La evolución de los saldos y de la inscripción en restante a pagar fue captada de los saldos de tales cuentas en el gobierno federal, en los gobiernos de 26 estados y el Distrito Federal, y cerca de 4.100 municipios. Además, se observó la interpretación dada por los Tribunales de Cuentas para...

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Section: Methodsmentioning

confidence: 99%

Section: Literature On Budget Carry-overmentioning

confidence: 99%

Section: Literature On Budget Carry-overmentioning

confidence: 99%

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Restos a pagar e a perda da credibilidade orçamentária

Aquino

Azevedo

2017

Rev. Adm. Pública

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“…Analysis of state‐level budgeting challenges suggest similar challenges, as shown by Dautrich et al () for Connecticut, Lauth () for Georgia, Bunch () for Illinois, and Bifulco and Duncombe () for New York. Hou and Smith (, ) and Smith and Hou () have shown that technical rules governing budgetary outcomes can be more effective than political rules dictating the political process of assembling and approving budgets. However, enacting technical rules requires a shared normative commitment that transcends political differences.…”

Section: Motivationmentioning

confidence: 99%

A Payback Approach to Generational Inequity

Couch

2016

Public Budgeting & Finance

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The payback approach to capital budgeting is proposed as a clear and intuitive way to think about fiscal policy and the normative problem of generational equity. Payback has been an enduring tool of corporate capital budgeting decisions and the home mortgage industry. As a clear and resonant conceptual tool, payback measures thus have the potential to mobilize political will for overcoming difficult fiscal policy problems, when they arise. Numerical examples calibrated to U.S. federal budget history illustrate how payback measures can be used in practice.

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“… Smith and Hou () have an alternative measure of budget stringency, but they refuse to make their data publicly available.…”

mentioning

confidence: 99%

Topping Off and Bottoming Out: Setting Budget Priorities Through Executive Power

Breunig¹,

Koski²

2018

Policy Studies Journal

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This article examines the role of the institutional power of executives in public budgeting; specifically, how executives change spending on particular budget items. Leveraging extant theories of the policy process concerning preference expression, attention, and institutions, we argue that executives deepen large cuts and boost large increases in budgetary change. The strictures of the budgetary process force trade-offs for executives in preference expression such that increases to preferred categories typically require decreases in other categories. Literatures in public policy and political representation suggest that all executives would like to express fiscal preferences, thereby contributing to categorical budget oscillations; however, not all executives are created equal. We employ quantile regression to examine whether the institutional strength of governors determine cuts, stasis, and expansion in spending across all budget functions in the American states between 1985 and 2009. Our model includes a host of political and economic variables found in the literature of fiscal policymaking, such as partisanship and divided government. The desire to change policy may be widely shared across executives, but we find that the ability to "top off" categorical increases and bottom out categorical decreases is a function of an executive's capacity to call attention to preferred categories via agenda-setting power and to secure those changes via veto power. The findings show strong governors are well positioned to influence public policy through the budgetary process.

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Balanced Budget Requirements and State Spending: A Long–Panel Study

Cited by 41 publications

References 33 publications

Restos a pagar e a perda da credibilidade orçamentária

Restos a pagar e a perda da credibilidade orçamentária

A Payback Approach to Generational Inequity

Topping Off and Bottoming Out: Setting Budget Priorities Through Executive Power

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