Abstract
Fiscal controls require monitoring and transparent reporting. Financial documents with multiple funds, transfers, and inconsistent year‐to‐year categorization of revenues and expenditures provide opportunities to obscure a negative fiscal picture. We hypothesize that fiscal stress increases obfuscation. We investigate the relationship between the share of total governmental expenditures in U.S. states' general funds and independent variables drawn from the literature. Consistent with our hypothesis, deficit and debt are the most important explanatory variables. A one standard deviation increase in the deficit as a share of total expenditures is predicted to decrease the general fund share by one percentage point.
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