Abstract
Evidence provided by the GLOBE study (House et al [1]) has shown that different cultures have definite preferences for different leadership styles. This study examines whether the cultural preference for specific leadership styles has implications for the development of transparency in government budgetary reporting. Our results show that the Performance-Oriented and the Autonomous leadership styles are positively associated with greater transparency while the Team-Oriented and Humane leadership styles have a negative relationship. When Lewin's classical leadership styles are introduced, we found that both the Democratic and Autocratic leadership styles were positively associated with budget transparency. In contrast, the Delegative leadership style is found to be negatively associated with budget transparency. One major implication of this study is that the movement towards greater transparency in government budgeting would be facilitated by changes in cultural preferences for certain leadership styles.
Highlights
This study examines the role that the preferred leadership styles of different cultures play in the adoption of government fiscal transparency
The results of our analysis of the relationship between preferred leadership style and budget transparency confirmed our prior expectations in some areas but not in other areas
Focusing first on the GLOBE measures, we found the Performance-oriented leadership style to be positively associated with high budget transparency, while the Team-oriented and Humane leadership styles have the opposite effect on transparency
Summary
This study examines the role that the preferred leadership styles of different cultures play in the adoption of government fiscal transparency. There is evidence of significant differences in government fiscal transparency across countries Some of these differences can be explained by the political and economic structures, but the potential effect of the preferred leadership styles of the culture of these countries has not been explored to date. It involves ready access to reliable, comprehensive, timely, understandable, and internationally comparable information on government activities so that the electorate and financial markets can accurately assess the government’s financial position and the true costs and benefits of government activities, including their present and future economic and social implications” (page 1) In their view, such transparency is an important condition for good governance and fiscal probity.
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