The Local Budget as a Complex System: Overview, Concepts, and Definitions

Abstract

This monograph supplements traditional budgeting texts. It introduces the concepts of complexity and dynamic capacities as lenses to examine the local government budget process in a dynamic general equilibrium framework. It adds to conventional budget theory analysis by adding concepts such as fiscal sustainability, complexity analysis, a systems framework, and governance variables. It also explicitly introduces local government debt and economic development policies as budgetary variables. It uses these to analyze the potentially complex interactions of many variables on the revenue, expenditure, and debt decisions of a local jurisdiction. This framework enables the analysis of many interdependencies of exogenous variables in a complex systems framework and helps to identify some non-obvious relationships among those variables and the budget.KeywordsFiscal sustainabilityComplex systemsGovernanceDynamic capacityLocal budget