Budgetary Outcomes Research Articles

Fiscal rules management in the EU: differences between fiscally sustainable and unsustainable countries

The paper examines fiscal sustainability within the European Union (EU), focusing on its key indicator - the long-term cointegration relationship between government revenues and expenditures. Given the EU's shared monetary framework, understanding fiscal sustainability at both the union level and within individual member states is critical for macroeconomic stability management. First, using a cointegration analysis, the research assesses fiscal sustainability across EU countries from 1995 to 2021. The findings reveal significant disparities, seeing that 14 member states show a strong cointegration relationship, indicating their fiscal sustainability, while 13 exhibit weaker evidence, highlighting ongoing challenges to proceed fiscally sustainable environment. Second, the study evaluates the impact of fiscal rules on budgetary outcomes using panel data models. Results suggest that fiscal rules enhance fiscal discipline across the EU, with more pronounced effect in countries facing sustainability challenges. Further, in more fiscally stable economies, broader macroeconomic factors such as economic performance and income levels are found to play more important role in budget balance changes. The paper contributes to the broader debate on the effectiveness of fiscal rules and the future of fiscal governance in the EU, offering insights to strengthen long-term fiscal stability across member states.

The Influence of Budget Goal Clarity and Organizational Commitment on Budget Performance: Evidence from Kupang Regency, Indonesia

The purpose of this research is to examine the impact of budget clear clarity and organizational commitment on budget performance in Kupang Regency, Indonesia. Data from 80 people participating in local government budget management were collected and analyzed using structural equation modeling (SEM). The data show that budget goal clarity has no meaningful effect on budget performance, however organizational commitment has a statistically significant impact. These findings highlight the importance of organizational commitment in improving budget outcomes, implying that local governments should prioritize employee engagement through effective techniques and organizational assistance. In contrast, the negligible influence of budget goal clarity emphasizes the need for more research into the mechanisms by which clear budget goals can contribute to performance. This study adds to our understanding of budget performance drivers and offers practical recommendations for improving financial management procedures in local government. Future research should look into other aspects including leadership styles, communication effectiveness, and staff involvement as potential mediators or moderators in the relationship between budget objective clarity and performance.

The impact of fiscal opacity on business confidence: empirical investigation from an emerging economy

PurposeThe relevance of transparency related to public finances is considered fundamental for good economic policy management. An environment of greater fiscal transparency allows the private sector greater predictability, improving the entrepreneur’s decision-making ability. This study empirically analyzes fiscal opacity’s effect on business confidence in an emerging economy.Design/methodology/approachWe use monthly data from the Brazilian economy from January 2010 to March 2023. Based on Ordinary Least Squares (OLS) and the Generalized Method of Moments (GMM) regressions, we analyze whether fiscal opacity, measured by the signal-to-noise ratio, affects business confidence. Moreover, to evaluate the duration of a shock transmitted by the fiscal opacity on business confidence, we consider an impulse-response function generated by a Vector Auto-Regressive (VAR).FindingsWe found that fiscal opacity resulting from the lack of information to anticipate the budgetary result of the public sector deteriorates business confidence.Practical implicationsWe present robust empirical evidence that allows us to assume that using a strategy to reduce fiscal opacity through mechanisms that provide reliable economic data and fiscal forecasts is essential for fiscal policy to affect business confidence positively. Reducing fiscal opacity provides greater clarity regarding the budget outcome, reduces economic uncertainty and improves the fiscal policy expectation channel.Originality/valueThis paper is the first to analyze how the lack of information for market agents to anticipate the government’s budget execution accurately (fiscal opacity) affects business confidence.

The Society’s Effort in Increasing the Economy Through the Palm Oil Waste

This research was implemented in Sukamaju Village, Sub regency of Singingi Hilir, Regency of Kuantan Singingi to know the potential of palm oil waste that is used by the society of Sukamaju Village as the manure and to describe the society effort of Sukamaju Village in using the potential of palm oil waste for increasing the economy level and decreasing the bad environment impact because of the palm oil waste. For obtaining the accurate data, the method of descriptive qualitative research is used by collecting the data, using the deep interview technique, direct observation and documentation. The analyze result shows that there is a quiet big waste potential in Sukamaju Village then processed to be the valuable manure. Moreover, this manure manufacture process is obtained from the palm oil waste from two big factories namely PT. Surya Agro Reksa and PT. Agrolestari. The process of waste production of palm oil includes the manufacture from the waste ponds, where the first pond of waste still has the high level of acidity so that it has not been able to be used yet. So the level of middle pond of waste water has been able to be channeled to the agriculture for make the plant fertile, and in the last level of solid waste is used as the natural manure of the land fertilizer. The analyze result shows that the waste of the palm oil can increase the fertility of land and plant, so it decreases the budget outcome of chemical manure. The socialization effort is needed to pressure massively for the information distributing connected the right waste processing.

Fair Lotteries for Participatory Budgeting

In pursuit of participatory budgeting (PB) outcomes with broader fairness guarantees, we initiate the study of lotteries over discrete PB outcomes. As the projects have heterogeneous costs, the amount spent may not be equal ex ante and ex post. To address this, we develop a technique to bound the amount by which the ex-post spend differs from the ex-ante spend---the property is termed budget balanced up to one project (BB1). With respect to fairness, we take a best-of-both-worlds perspective, seeking outcomes that are both ex-ante and ex-post fair. Towards this goal, we initiate a study of ex-ante fairness properties in PB, including Individual Fair Share (IFS), Unanimous Fair Share (UFS) and their stronger variants, as well as Group Fair Share (GFS). We show several incompatibility results between these ex-ante fairness notions and existing ex-post concepts based on justified representation. One of our main contributions is a randomized algorithm which simultaneously satisfies ex-ante Strong UFS, ex-post full justified representation (FJR) and ex-post BB1 for PB with binary utilities.

Estimating the clinical and budgetary impact of using angiotensin receptor neprilysin inhibitor as first line therapy in patients with HFrEF.

Recent updates of international treatment guidelines for heart failure with reduced ejection fraction (HFrEF) differ regarding the use of angiotensin receptor neprilysin inhibitor (ARNI) as first-line treatment. The American Heart Association/American College of Cardiology/Heart Failure Society of America (AHA/ACC/HFSA) 2022 guidelines gives ARNI a Class IA recommendation for HFrEF patients while the European Society of Cardiology's guidelines are less clear when ARNI could be considered as first line treatment option in de novo patients. This study aimed to model the clinical and budgetary outcomes of implementing these guidelines, comparing conservative ARNI prescription patterns with less conservative in Sweden and in the United Kingdom. A health economic model was developed to compare different treatment patterns for HFrEF. Incident cohorts were included on an annual basis and followed over 10years. The model included treatment specific all-cause mortality and hospitalization rates, as well as drug acquisition, monitoring, and hospitalization costs. Increasing the use of ARNI could lead to about 7000-12300 life years gained and 2600-4600 hospitalizations prevented in Sweden. These health benefits come with an additional cost of 112-195 million euros. Similar results were estimated for the United Kingdom, albeit on a larger population. Increasing the proportion of patients receiving ARNI instead of angiotensin converting enzyme inhibitors as first-line treatment of HFrEF will lead to a considerable number of additional life years gained and prevented hospitalizations but with additional cost in terms of health care expenditure in Sweden and in the United Kingdom.

The budget impact of procalcitonin-guided antibiotic stewardship compared to standard of care for patients with suspected sepsis admitted to the intensive care unit in Belgium.

In Belgium, antibiotic resistance leads to approximately 530 deaths with a €24 million financial burden annually. This study estimated the impact of procalcitonin-guided antibiotic stewardship programs to reduce antibiotic consumption versus standard of care in patients with suspected sepsis. A decision analytic tree modelled health and budget outcomes of procalcitonin-guided antibiotic stewardship programs for patients admitted to the intensive care unit (ICU). A literature search, a survey with local clinical experts, and national database searches were conducted to obtain model input parameters. The main outcomes were total budget impact per patient, reduction in number of antibiotic resistance cases, and cost per antibiotic day avoided. To evaluate the impact of parameter uncertainty on the source data, a deterministic sensitivity analysis was performed. A scenario analysis was conducted to investigate budget impact when including parameters for reduction in length of ICU stay and mechanical ventilation duration, in addition to base-case parameters. Based on model predictions, procalcitonin-guided antibiotic stewardship programs could reduce the number of antibiotic days by 66,868, resulting in €1.98 million savings towards antibiotic treatment in current clinical practice. Antibiotic resistance cases could decrease by 7.7% (6.1% vs 9.2%) in the procalcitonin-guided setting compared with standard of care. The base-case budget impact suggests an investment of €1.90 per patient. The sensitivity analysis showed uncertainty, as the main drivers can alter potential cost savings. The scenario analysis indicated a saving of €1,405 per patient, with a reduction of 1.5 days in the ICU (14.8 days vs 12.8 days), and a reduction of 22.7% (18.1-27.2%) in mechanical ventilation duration. The associated sensitivity analysis was shown to be robust in all parameters. Procalcitonin-guided antibiotic stewardship programs are associated with clinical benefits that positively influence antimicrobial resistance in Belgium. A small investment per patient to implement procalcitonin testing may lead to considerable cost savings.

Statistical learning of water budget outcomes accounting for target and feature uncertainty

Statistical learning seeks to learn statistics-based rules for data analysis tasks from known examples of inputs, or features, and corresponding outcomes and includes machine learning (ML) and deep learning (DL) algorithms. Data sets that are noisy, include significant uncertainty, and have extreme values hinder the learning process. In this study, aquifer recharge predictors are developed using four, random forest or gradient boosting ML methods and Long Short-Term Memory (LSTM) networks, a DL method to: (1) examine predictive skill when trained using noisy and uncertain data and (2) identify advantages of statistical learning implementations for prediction of water budget outcomes relative to process-based water budget calculations. Recharge was selected as the learning outcome because it is not observed and inherently uncertain. Precipitation, potential evapotranspiration (PET), and river discharge are the features, or inputs, and are calculated, or modelled, values and are not directly observed; consequently, they are expected to be noisy and uncertain because of contamination with measurement and model error. A common-sense baseline is developed and implemented to account for uncertainty and noise in outcomes for training and validation; the baseline provides delineation of a lower goodness-of-fit threshold that identifies when trained ML and DL models generate prediction skill and an upper goodness-of-fit threshold above which the models are learning to reproduce noise and bias. For statistical learning regression implementations, features and outcomes need to be transformed to be Gaussian-like. Inherent variability and extreme events in precipitation, discharge, and recharge data sets require power transformation, or at least scaling of logarithms, to enhance predictive skill. Identified advantages to statistical learning of water budget outcomes are the ability to use dimensionless trends for features and to represent a complex study site with the same level of effort as a simple site.

The public finance response to floods of local governments in Italy

This paper aims to empirically test the dynamics of budget outcomes of Italian municipalities in the aftermath of floods by accounting for heterogeneous levels of resilience and vulnerability to natural disasters. Our findings are based on a dynamic difference-in-differences model after propensity score matching. They point to substantial impacts in terms of increased capital expenditure and revenues from transfers, which depend on the degree of resilience and vulnerability. Through our analysis, we account for multiple aspects of risk to support policy decisions related to both ex-ante and ex-post disaster occurrence management.

БЮДЖЕТНЕ ПЛАНУВАННЯ ЯК ЧИННИК ПІДВИЩЕННЯ ЕФЕКТИВНОСТІ ФІНАНСУВАННЯ ОСВІТИ В УКРАЇНІ

The article examines the issues of budget planning as a factor in increasing the efficiency of education financing in Ukraine. Budget planning plays a crucial role in enhancing the efficiency of education financing in Ukraine. A well-structured and strategic budget is essential for addressing the diverse needs of the education sector and ensuring optimal utilization of financial resources. Transparency and openness in the budgeting process are equally vital. Providing accessible information on budget allocations fosters accountability and engages stakeholders, including educators, parents, students, and the broader community. This collaborative approach ensures that budgetary decisions align with the expectations and aspirations of those directly affected by educational funding. Targeted funding strategies should be employed to direct financial resources to priority areas within education. Whether it's investing in modern educational technologies, innovative teaching methods, or teacher development programs, allocating resources strategically can significantly enhance the overall quality of education. Financial discipline is another critical aspect. Implementing mechanisms for monitoring and evaluating the effectiveness of budget expenditures helps identify areas for improvement. This feedback loop enables continuous refinement of budgetary strategies, promoting a more efficient allocation of resources. Innovative financial instruments, such as partnerships with the private sector and philanthropic foundations, can also be explored to supplement traditional funding sources. This diversification of funding sources provides a sustainable foundation for educational development. Regular monitoring and assessment of budget outcomes contribute to a dynamic and responsive budgeting process. This approach allows for adaptability to changing circumstances, ensuring that educational financing remains effective and aligned with the evolving needs of the education sector. In conclusion, effective budget planning is integral to the enhancement of education financing in Ukraine. By prioritizing transparency, strategic allocation, financial discipline, and innovation, the education sector can achieve greater efficiency and, ultimately, provide a higher quality of education for the country's learners.

The Role of Legislators and Budget Process in Nigeria

This study examined the role of the legislators and budget process in Nigeria. For the objective of the study to be achieved, the study embraces the library research which involves a review of extant literature and this forms the basis for drawing up the conclusion. Flowing from the review, the study shows that argument has been raised by several analysts that legislative oversight committees have found not to be very effective in stimulating Ministries, Departments and Agencies (MDAs) for budget outcomes attainment. The argument is that oversight activities are used by some legislative committees to intimidate rather than encouraging (MDAs) to perform at the optimum levels especially in the areas of budget implementation. The study therefore recommends that the legislators in the Nigeria budget process should ensure that the MDAs make proper use of the funds allocated to them efficiently and effectively with a view to preventing careless spending, diversion as well as the misappropriation of public funds. The oversight activities of the legislative committees should be used to encourage MDAs to perform at the optimum levels especially in the areas of budget implementation and not to intimidate.

Projected Return on Investment From Implementation of a Lifestyle Intervention to Reduce Adverse Pregnancy Outcomes

Structured antenatal diet and physical activity interventions have been shown to be associated with reduced adverse pregnancy outcomes and recommended to be routinely offered to all pregnant women. The health cost implications of population-level implementation are unclear. To estimate the budget impact associated with integrating structured diet and physical activity interventions into routine antenatal care. This economic evaluation was conducted from the perspective of Australian health funders. An open-source decision-tree model was constructed to compare the projected budget outcomes of implementing lifestyle intervention vs usual care. Scenario, deterministic, and probabilistic sensitivity analysis were completed. The study setting was Australian health services, and the study population was all Australian women projected to give birth in the years 2022 to 2026 (approximately 330 000 per year). Structured diet and physical activity intervention provided by trained health professionals, integrated into routine antenatal care. Comparator was usual care, which currently in Australia does not include routine structured lifestyle interventions. Return on investment (ROI) ratio for lifestyle intervention (cost of intervention divided by cost savings attributable to reduced maternal and infant adverse events) from the perspective of Australian health care funders. Adverse events were obtained from a published meta-analysis and population data. Costs were estimated from aggregate trial data and clinical pathways and valued at the year incurred. Intervention offered an ROI ratio of 4.75 over the 5-year program; hence every Australian dollar spent on implementation produced an estimated return of A$4.75. The projected total 5-year intervention cost was A$205 million ($151 million), with cost offsets (from reduced incidence of adverse pregnancy outcomes) of A$1022 million ($755 million), and health budget savings of A$807 million (95% CI, A$129 million to A$1639 million) ($596 million [95% CI, $95 million to $1211 million]); 93.3% of the 10 000 iterations were within cost saving, and results were robust to scenario and sensitivity analyses. This economic evaluation found that providing access to structured diet and physical activity lifestyle interventions for all pregnant Australian women was estimated to provide strong return on investment for health funders. The open-source model developed can be used by other jurisdictions and health services to explore cost implications of implementation within their patient population.

To Identify the Challenges of Fiscal Policy for Construction Industry in Pakistan

The entire influence of a country's budget outcome on economic activity is referred to as fiscal policy. Fiscal policy has its own share of benefits & challenges in particular groups. Therefore, the aim of this study is to identify the benefits & challenges of Fiscal Policy for Construction industry. A detailed literature review has been conducted to identify the possible benefits and key challenges to better fiscal policy. In later stage, a set of questionnaire was prepared using the identified factors. The data was collected from construction industry professionals with experience on fiscal policy management. The data was analysed by aggregated average mean using SPSS. The factor ranks were made on the higher values of aggregated mean value. The study concludes that the main hurdles to better fiscal policy are import/export restrictions, delays in land/plot permits/licenses, and currency fluctuations, as well as government subsidies on construction materials. Similarly, the top benefits for better fiscal policy in the construction industry include meaningful salaries/wages and employment for daily wage earners. The study recommended that, Policymakers must be urged to adopt suitable fiscal policies that address these challenges in order to evolve and improve the construction sector.

Solving Collective Action Problems under Separated and Shared Powers: The Benefits of Consolidating Executive Budgetary Powers, 1895–1940

The Budget and Accounting Act of 1921 consolidated executive budgetary powers within the presidency and Congress. I evaluate how the Act reforms altered the nature of executive budgetary influence, using an original historical database from fiscal years 1895 to 1940. I show that these reforms were not only consistent with both political branches’ objective to empower presidents to rein in profligate executive budget proposals under the decentralized budgetary system but also afforded presidents greater budgetary influence when seeking higher funding levels relative to Congress. This mutually beneficial power-sharing arrangement between the president and Congress stands in contrast with existing accounts that these reforms favored one branch at the expense of the other. Finally, I offer evidence that this arrangement was made possible by solving collective action problems within the executive branch that reduced the capacity of seasoned agency heads to shape budgetary outcomes during the postreform era.

Factors influencing trajectories of performance-program budgets: survey in municipalities of the middle Euphrates provinces of Iraq

The paper presents the analysis and determines factors effecting the budget program implementation, which leads to decrease the efficiency and effectiveness for budget outcomes provided to public. The importance of a municipality budget program is related to the standards of population living, thus obstructing the implementation of programs cause a direct negative impact upon people’s life. Municipalities seek to optimize the use of resources and allocate them to the planned programs in order to obtain the best results in terms of quantity. Distribution of financial allocations to the planned projects is one of the most important steps in preparing the budget. A negative impact of some factors on the budget programs implementation is proved. There was used a questionnaire to investigate the managers and employees from the related department as accountants, administrators, engineers, and auditors in municipalities of the middle Euphrates of Iraq. Basically, there were interviewed the department managers to design factors affecting the implementation of budget programs and preparing questioners for their employees. There was suggested the hypothesis for the research and determined the factors influencing budget programs trajectories rather than quality or quantity. Among the most important recommendations are emphasized the protection of municipal departments from political parties’ interference, increasing coordination between the municipal departments and the central and local governments, and rehabilitating the controlling system.

Revisiting the theory of revenue diversification: Insights from an empirical analysis of municipal budgetary solvency

AbstractHow does revenue diversification shape the budgetary solvency of city governments? Previous studies informed by the public choice/fiscal illusion perspective suggest that diversification leads to unsustainable government expansion and budgetary imbalance. In contrast, the organizational adaptation/modern portfolio theory suggests that diversification enables government to prepare for external fiscal shocks. We use different measures of revenue diversification and rely on audited financial information to develop general fund‐based and government‐wide budgetary solvency measures for more than 500 midsized and large cities in the United States from 2006 to 2012. Addressing omitted variable bias, the results of the econometric analyses indicate that the type of diversification matters. Specifically, diversifying to non‐tax sources improves budgetary solvency as indicated by higher government‐wide operating ratio and reserves, whereas diversifying within the tax structure produces the opposite effects. The contradictory results point to the need to rethink current theories of diversification, which do not recognize the different ways that revenue structures can be broadened, and how these produce distinct effects on fiscal performance. We lay out the critical first step in clarifying and further developing a more nuanced theory by proposing three causal mechanisms outlining the pathways through which the types of diversification can influence budget outcomes.

Balanced Budget Requirements Revisited

We test the effect of balanced budget requirements (BBRs) on budget outcomes using data published in audited financial statements. With a focus on the General Fund, we find states frequently reported deficits in their adopted budgets and relied on sizeable and favorable expenditure variances to close budget gaps before the end of the budget period. Empirical analysis shows that technical or strict BBRs procedures did not increase the likelihood that a state would report a balanced budget. We corroborate our findings using fund balance data. If technical or strict BBRs are effective, states would report higher fund balances, all else equal. Results show that states that adopted political BBRs reported lower fund balances. More importantly, the adoption of strict or technical BBRs did not lead to higher fund balances.

Wildavsky or a workbook: Advice for the novice faculty member teaching undergraduate public finance

The article examines five areas novice instructors should consider before teaching public finance. First, instructors should ascertain their comfort level along the qualitative-quantitative continuum. This ranges from a high-level overview of the budgetary process, politics, players, and outcomes (qualitative) before descending into spreadsheets with formulas for decision making (quantitative). Second, instructors should know which resources to assemble including textbooks, government documents, and spreadsheet guidebooks. Third, instructors should understand the department’s expectations for the course along the qualitative-quantitative continuum based on students’ career paths. Fourth, instructors should assess students’ capabilities to grasp budgeting exercises and spreadsheets competently. Finally, instructors should monitor how the course content aligns with regional employers and the academic program’s advisory board. Many academics would argue that these five points are rudimentary for any instructor’s pedagogy, until they teach public finance.

ANALISIS DANA DEKONSENTRASI SEKTOR PENDIDIKAN DI PROVINSI SUMATERA BARAT

This research had a purpose to analyze deconcentration fund of education field in West Sumatera Province on 2011-2015. The type of analysis used is descriptive quantitative by collecting and analizyng the data of allocated deconcentration fund, Report on Budget Outcomes (RBO), Strategic Plan of Education Ministry, Accountability Report of Government’s Performance, program implementation, and relation with government in educational field. The result of the research showed that there are activities that were not accordance with the nature of deconcentration fund which is non-physical activity, such as in 2011 and 2012 there were still many physical activities such as building construction, laboratory equipment procurement, and rehabilitation of classroom and building of education office. The absorption of deconcentration fund would give a better affects for performance of education offices of West Sumatra Province. This could be seen from the total absorption of deconcentration funds that can increase the percentage of APK and APM which became the main indicator of the main programs in achieving performance.

Legacy Effect of Soviet Budgeting System on Public Capital Budgeting: Cases of Russia, Moldova, and Uzbekistan

ABSTRACT This comparative study uses the legacy effect of the Soviet past to explain the changes in public capital budgeting and management in the three former Soviet republics: Russian Federation, Moldova, and Uzbekistan. The main argument is that the legacy of the Soviet planning and budgeting traditions in forms of the centralized control, inadequate capital planning, and strong informal powers of political elites are embedded in the capital budgeting and management practices of the case countries. The analysis reveals that regardless of the differences in the countries’ socio-economic characteristics, political regimes, and institutional developments, the budgetary outcomes are consistently shaped by the public management principles rooted in the Soviet budgeting traditions. The study findings are significant to the field of International Public Administration, Post-Soviet Affairs, and Public Finance because they disclose the legacy effect of the Soviet practices on the implementation of public administration reforms in post-communist countries. By exploring areas in international public capital budgeting and investments, this study also attempts to address the gap identified by public finance scholars.