The effect of revenue diversification and form of government on public spending

Ji Hyung Park (James Madison University, Harrisonburg, Virginia, USA)
Sungho Park (Department of Political Science, University of Alabama, Tuscaloosa, Alabama, USA)

Journal of Public Budgeting, Accounting & Financial Management

ISSN: 1096-3367

Publication date: 4 June 2018

Abstract

Purpose

Revenue diversification interacting with form of government that has different management behaviors may produce a variation in the level of public spending. The purpose of this paper is to understand how revenue diversification interacts with form of government in determining the level of public spending.

Design/methodology/approach

A cross-sectional research design with the analysis of interaction effects was employed in order to achieve this research objective. Drawing from the economic and financial management perspectives on revenue diversification, this study proposes the following hypotheses: in the council-manager form, greater revenue diversification leads to less spending; in the mayor-council form, greater revenue diversification leads to more spending; and mayor-council governments with diversified revenues spend more than council-manager governments.

Findings

The regression results support the second and third hypotheses, but not the first hypothesis.

Originality/value

This study offers a robust link between revenue diversification and form of government by examining how their interaction produces a variation in the level of public spending.

Keywords

Citation

Park, J. and Park, S. (2018), "The effect of revenue diversification and form of government on public spending", Journal of Public Budgeting, Accounting & Financial Management, Vol. 30 No. 2, pp. 211-229. https://doi.org/10.1108/JPBAFM-02-2018-0012

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Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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