Search results

This article aims to examine empirically the relationship between budget periodicity and expenditure volatility in state governments. Using a large panel dataset for fifty states over the years 1960-2012, after controlling for institutional, economic, and political factors, we find general expenditure of biennial states has been significantly less volatile than that of annual states. The finding suggests that a choice between annual and biennial budget period can emerge as a feasible and effective countercyclical strategy to overcome fiscal difficulties in the short run and promote fiscal stability in the long run.

The purpose of this paper is to explore the impact of changes to the Arkansas budget process brought about when the people of Arkansas voted to move from a biennial to an annual budget period in 2008. The paper describes the legislative changes necessary for annual budget review and explores the impact of annual budget review on revenue forecasting, supplemental appropriations, special sessions, legislative staff workload, executive branch oversight and state spending. This research assesses legislative perceptions of annual budget review across several factors including knowledge of the state budget, ability to check the powers of the governor and overall efficacy of annual budget review.

This exploratory research uses interview data from the Legislative Fiscal Director and data from an online survey of Arkansas state legislators. The interview and survey data were supplemented by an analysis of documents produced by legislative staff regarding supplemental appropriations, special sessions and state general revenue.

The Legislative Fiscal Director interview indicates that the change in budget period had little impact on revenue forecasting, special sessions and state government spending, with the exception that supplemental appropriations for Big 6 agencies increased in a statistically significant way following the advent of the fiscal session. The legislative survey finds that the change in budget period is viewed positively by Arkansas legislators. Most legislators indicated that they prefer annual budget review to biennial budget review.

Because of the exploratory approach, the research results may lack generalizability.

This paper surveys legislators on the efficacy of annual budget review which has seldom been done in previous research.

Examines budget planning; implementation and performance evaluation practices by utilizing a questionnaire survey of 54 medium and large sized companies located in Bahrain. Most of the companies prepare long‐range plans and operating budgets, and they follow a definite budget procedure and implementation methodology. Uses budget variances to measure a manager’s ability, for timely recognition of problems, and to improve the next period’s budget. While both the listed and non‐listed companies have reported many similar budget practices, the main differences were specific purposes served by budgets, degree of budget participation, periodicity of variance reporting, and purposes and authority to evaluate budget variance reports. In certain cases, firm size influences budgeting practices. Contributes toward filling a gap in the literature on the use of budgets as a planning and control tool in developing countries. Most prior studies were mainly confined to advanced countries. The study findings suggest the need for research on attitudes held by the budgetees towards the use of budget variances in the context of advanced management accounting techniques.

Biennial budgeting and appropriations cycles have been a popular idea among many members of Congress for the past twenty years. Despite widespread bipartisan support for biennial budgeting in the 1980s, the first House vote on the subject, in 2000, resulted in a narrow defeat for biennial budgeting. This article analyzes the merits of biennial budgeting and the reasons for its defeat, arguing that during the 1990s biennial budgeting lost its sense of urgency because of the erasure of the federal deficit and became a more partisan issue than it previously had been.

This article evaluates quantitatively the impact of four common budget approaches on disaggregated United States state spending data in the 1990s. Pooled time series cross sectional data of the 50 states is used to test the impact of incremental, program, zero-based, and performance-based budgeting on the dependent variables state total and functional expenditures. The results demonstrated that there was support for all of these approaches in terms of their impact on state budget outputs. These findings imply that budget decision-making should focus more on a system-wide approach, which takes into account many of the characteristics of these rival models, rather than exclusively focusing on each one singly. A possible suggestion is a hybrid form of budgeting, which is a combination of incremental and rational approaches.

Budgeting process has been largely criticized in the recent accounting literature. The responsiveness of budgets to fast-moving environments is now questioned. The purpose of this paper is to address this issue by suggesting that companies use rolling forecasts as an interactive and flexible tool to cope with turbulence.

We designed a web-based survey directed to Spanish companies operating in an uncertain environment. Statistical results of the survey reveal that more than 60% of the respondents consider that changes in the environment makes it very difficult to establish accurate budgets. Respondents also mentioned that with the economic down cycle the establishment of reliable financial forecasts is requiring a great effort. At the same time, qualitative interviews have been conducted with companies already using rolling forecasts to test and further develop the use of this interactive tool.

We found that the rolling forecasts are considered to be a dynamic strategic planning tool, very useful for cash management and day-to-day decision-making process, but that they cannot replace budget for evaluation and motivation purposes.

The study has its limitations as the findings rely on a small number of survey respondents and interviewed organizations. Nevertheless the results have been compared, when possible, to those of similar surveys in order to validate them.

The article supplies actualized information about budgeting practices in a turbulent environment and more specifically in the Spanish context.

Approaches taken by states in their revenue forecasting are extremely diverse. This research identifies six institutional structures that states utilize in their revenue forecasting processes. The results show that the “typical” state utilizes a non-consensual approach to forecast formulation with the forecast being done by a single executive agency or cabinet office and with the executive having the final say in the forecast. The “typical” state will not have an economic advisory council, but will utilize faculty from local universities. The “typical” state updates its forecast about every six months and the forecasters perceive their forecast as binding the state budget.

The purpose of this article is to challenge the balanced budget practices of U.S. state governments and offer alternatives that may lead to better fiscal, economic and policy outcomes. We contend that the norm of balance may be leading U.S. states to make fiscal decisions that result in less-than-ideal outcomes, especially during economic downturns.

This is a normative article. We examine the scholarly evidence regarding balanced budget practices to assess the appropriateness of balanced budget norms. We also examine the fiscal rules followed by Eurozone countries to draw potential lessons for U.S. states.

We conclude that state governments should move away from strict norms of budget balance and seek more flexible approaches. We suggest that instead of following strict rules and norms of balance, U.S. states should consider implementing escape clauses, debt and deficit ceilings, and fiscal councils. We also suggest that the Federal Reserve be open to lending directly to states during fiscal crises to ensure that states have access to affordable credit.

The balanced budget norm has become ingrained in U.S. state budgeting practices, so much so that public officials and scholars alike rarely question it. The novel contribution of our article is to question this practice in a systematic way and propose alternative approaches.

Budgets have to meet a number of principles in order to fulfil their functions properly. This paper focuses on two of these budget principles. First, it addresses the principle of unity and universalism, and in particular, discusses the issue of earmarking receipts. It is concluded that most of the perceived benefits of special fund accounting do not occur in practice. Second, the paper deals with the principle of an efficient division of the budget. It is concluded that the credibility of the main argument in term of a capital budget, being that it reinforces the allocation function of the budget, is questionable.

Due to environmental externalities, micro-enterprises with profit-seeking features do not develop sufficient motivation for environmental governance. In a fiscally decentralized system, local environmental protection authorities perform environmental supervision, and the intensity of the regulations that they implement has an important influence on corporate environmental governance. Based on the promotion tournament framework, this paper aims to discuss the driving mechanism of corporate environmental governance using turnover of environmental protection department directors (EPDDs) as an indicator.

Using samples of A-share companies listed on the Shanghai and Shenzhen exchanges from 2007 to 2014, this paper examines the impact of EPDD turnover on corporate environmental governance and its underlying mechanism.

The results show that corporate environmental governance exhibits a political periodicity that changes with the turnover of the EPDD, and the periodicity remains after controlling for the influence of changes in provincial party secretary and governor. Internal mechanisms analysis indicates that, without financial independence, local environmental protection departments rely on increasing sewage charges, not environmental protection subsidies, to promote corporate environmental governance. Further, considering heterogeneity among officials, it finds that the younger a new EPDD is, the more pronounced the periodicity of corporate environmental governance. However, there is no significant difference between in-system and out-system turnover.

In general, this paper describes the mechanisms of corporate environmental governance from the perspective of political economics, and the results have implications for the potential improvement of the government’s environmental supervision functions and the development of ecological civilization in China.