The Status of Budget Forecasting

Abstract

This article examines the breadth of the current forecast literature as it relates to public budget making. It serves to provide summary information to decision-makers who otherwise do not have the resources to learn more than a small amount focused on much more narrowly defined areas of forecasting (such as the politics of forecast bias). Next, it serves those who perform forecasting related to budgeting by reviewing the current methods and practices commonly used in this domain. It also provides a ground level for future public budget forecasting research. Finally, this article identifies several areas in which the public forecasting literature needs additional development. Several of these areas, such as the effectiveness of nonregression-based forecasting techniques, are quite important to the majority of governments in the United States and other subnational jurisdictions, where budget offices are limited and resource investments in technology are scarce.

The influence of transparency on budget forecast deviations in municipal governments

“…However, forecast errors may not be simply the result of technical shortcomings in how forecasts are established but also reflect political decisions. Indeed, the extant literature consistently reveals that top decision-maker motivations, whether managerial or political, influence the point estimates creating a systematic error, as discussed below (Williams & Calabrese, 2016).…”

“…However, there are relevant differences in the level of transparency and the accuracy of budget forecasts between governments, which suggests they are deliberate (Williams & Calabrese, 2016). However, there are relevant differences in the level of transparency and the accuracy of budget forecasts between governments, which suggests they are deliberate (Williams & Calabrese, 2016).…”

“…As stated above, although several theories argue the lack of willingness on the part of some politicians to disclose budget information, budget transparency is growing, among other reasons, due to external pressures/constraints. However, there are relevant differences in the level of transparency and the accuracy of budget forecasts between governments, which suggests they are deliberate (Williams & Calabrese, 2016). The lack of transparency may increase opportunities for politicians to make optimistic or pessimistic projections of budget variables to manipulate the electorate.…”

Dynamics of Heteroscedasticity Modelling and Forecasting of Tax Revenue in a Developing Economy: A Review

“…They contend that the approach of carrot and stick can be one of the best technique to optimized the tax revenue problems in the emerging economies. Williams and Calabrese [55] assessed the extent of the up-to-date forecast literature as it correlates to public budget makeup and identifies a number of areas where forecasting literature requires attention. Nonetheless, the study did not really specify the model adopted in the literature thus, the study inferred the weaknesses of the forecasting errors that account for mostly the prediction.…”

Determinan Kinerja Anggaran pada Organisasi Perangkat Daerah

“…Usulan anggaran yang diajukan OPD menjadi bahan untuk penyusunan draf anggaran pendapatan dan belanja daerah (APBD) dan setelah ditetapkan akan menjadi tolok ukur dalam menilai kinerja anggaran OPD bersangkutan. Anggaran juga merupakan alat untuk mengalokasikan sumberdaya dalam rangka memenuhi kebutuhan publik yang dilaksanakan dalam bentuk tindakan berupa layanan oleh OPD, serta untuk memprediksi pendapatan dan pengeluaran di masa depan (Joyce, 2001;Williams & Calabrese, 2016). Sebagai agent, OPD memiliki kecenderungan untuk memaksimalkan usulan anggaran belanjanya, sehingga terjadi mark-up, yang merupakan slack dalam anggaran.…”