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The purpose of this paper is to evaluate whether the additional infrastructure information in US state financial statements improves infrastructure quality.

Based on institutional theory, the authors developed six models and estimated them on a state panel data set.

The authors found that the implementation of the Government Accounting Standard Board (GASB) Statement No. 34 improved state highway infrastructure quality, and the states using the modified approach had a larger effect compared to the states using depreciation accounting. The authors further used a two-step path analysis and found that the implementation of GASB 34 indirectly improved highway quality through increasing state highway maintenance expenditures. From the empirical results, the authors conclude that the exercise of collecting and developing systems to track the additional data has provided the opportunity for officials to use the information to prioritize limited funding and improve their asset management practices.

Future research may extend this research by exploring the detailed micro-mechanisms of how decision makers use infrastructure information in their asset management practices, as well as by increasing the number of years in the panel data set to fully capture changes in behavior.

In addition, governments currently using depreciation should be encouraged to move to the modified approach.

This is the first attempt to empirically examine the effects of GASB 34 on infrastructure condition.

Sustainability is a pressing challenge of governance and public financial management. One key element of sustainable governance is the role of citizens. Participatory budgeting (PB) is a participatory tool with which citizens can influence public administration. PB is a democratic process that grants people real power over real money and it has spread around the world. This special issue explores the role of PB in the context of sustainable governance. In this editorial, the authors aim to approach PB as a form of sustainable governance.

In this editorial, the authors collaborate in the analysis of how PB is implicated in the public management of complex social, economic and ecological issues. The authors identify key dimensions of internal and external sustainability based on prior research. The authors approach these dimensions as an internal–external nexus of sustainable governance in which organizational and financial sustainability are the internal dimensions and socio-political and environmental sustainability are the external dimensions.

Even though PB can be seen as one tool for citizen participation, it has the potential to foster sustainability in multiple ways. PB, as a form of sustainable governance, requires a financially and administratively sustainable organizational process that results in the institutionalization of PB. It also includes thorough consideration of socio-political and environmental sustainability impacts of PB.

Academics are actively studying PB from various perspectives. However, most of this work has approached PB from the viewpoints of design and results of PB, and less is known about its institutional settings. PB has not yet been adequately studied in the context of sustainability, and there is a need to scrutinize PB as a form of sustainable governance.

Issues like fiscal crises and sequestration may cause elected officials to get citizen input in the budget process. This action can be viewed as a reactive strategy used when the relationship with citizens is weakening; or, a proactive strategy to keep governance relationships strong. This conundrum prompts examination of how budgetary participation mechanisms serve representative democracy and governance goals. Using survey results from public officials in 391 midwestern cities regarding perceptions of governance relationships and the use of participation mechanisms, we find no significant relationships and weak explanatory power in the causal model. When trust in government keeps falling, the relative strength of the relationship between public officials and citizens is an issue that public administrators must understand to develop effective budget participation mechanisms.

Local governments in the U.S. rely less on the property tax than they have historically. This long-term trend has been accompanied by important shifts in the composition of local revenues. While the property tax still serves as one primary source of local government revenue, increasingly other sources are used to pay for local government. This paper first examines that trend, the forces behind it, and its regional impact. We then explore trends in three central states - - Iowa, Nebraska, and Arkansas -- that have experienced substantial revenue shifts in recent years. A concluding section discusses the options for the future.

This study explores the use and effects of citizen participation in city budgeting. Interviews were conducted with budget directors in 28 midwestern cities. Participation was found to affect budget decisions, but the public hearing remains the primary formal opportunity for input in most cities. Technology is increasingly being used to expand the budget information available to the public. Budget complexity and citizen disinterest were cited as the major barriers to participation. However, a number of cities have successfully used participation mechanisms in the budget development process that can serve as models for other cities.

Citizen participation in local government processes is touted as an effective means to enhance responsiveness and accountability. The topic has received considerable attention in the normative literature, yet there is persistent evidence that citizen participation occurs infrequently and has little influence on decision making. This study compares the perspectives of three different groups of stakeholders: elected officials, administrators, and citizens. Examination of the perspectives of these three groups of actors is important because it provides insight into the relationships between the groups and expectations regarding how input is used and how it influences decisions. Attention to these items can make participation more valuable and can inform other governments as they ponder how to align the priorities of different actors in their budgeting processes.

GASB Statement No. 34 required state and local governments to report information regarding general infrastructure in financial statements, to improve understanding of the organization's investments in capital assets. Some proponents suggested that this information would affect management practices and potentially resource allocation decisions, but initial survey data found limited evidence of effects. We use dynamic panel analysis covering 47 states from 1995 to 2009 to explore whether implementation of GASB 34 affected state highway capital and maintenance spending. We find evidence of increased capital spending, but no statistically significant change in maintenance expenditures. The choice of reporting method was not found to affect spending outcomes.

Public pension plans in the U.S. are seriously underfunded, especially following the financial market crisis of 2008-2009 which resulted in large investment losses. However, funding levels vary widely across plans. Pension boards of trustees make key management decisions in pension systems and these decisions have significant effects on funded levels, yet our empirical knowledge of board management is limited. This study explores the effect of board composition on pension funding levels. Existing theoretical debates lead to differing expectations, and previous studies have mixed results. Our research uses a panel data set of large public pension plans from 2001-2009. We also collect data for pension board composition from this time period. We find that increasing political appointees and employee members on the board increases the funding performance of the pension system.

This study analyzes the effects of budget referenda on spending levels. An agency theory framework is used to identify the incentives of voters and school boards, and to discuss the use of the referendum as a budget control mechanism. The regression analysis compares expenditures in New York State school districts with and without referenda requirements. Total spending is found to be 5.5% higher in districts without referenda, ceteris parabis. However, the specific rules related to referenda and budget defeats appear to be important determinants of their effectiveness.