Abstract
Currently, there is no integrating theory which specifies why governmental pension plans are so significantly underfunded. In this study, we test several hypotheses concerning such underfunding in a cross-sectional regression model for state-administered pension plans. The conceptual model underlying our empirical tests is based on states' economic and political incentives for pension underfunding and incorporates alternative public sector monitoring mechanisms (including the quality of financial reporting). Several empirical regularities are documented for the first time as the result of this study. In light of the Governmental Accounting Standard Board's (GASB, 1987, p.22; Ives, 1987, p. 134) stated position that financial reports should demonstrate “interperiod equity” as a key element of public sector accountability, these empirical results should help refine our theoretical understanding of governmental pension underfunding.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
