Public Sector Budget Research Articles

Budgeting Behavior: Indonesian Local Government Budget Predictions

Objective: The behaviors of overreaction and underreaction exhibited by public sector budget planners have an impact on the disparity between the initial budget set at the beginning of a period and the actual budget realization at the end of the period. This study aims to examine how budget planners in Indonesia predict budgets for local governments, specifically whether there is a difference in the overreaction or underreaction behavior of public sector budget planners among districts and cities in the South Sulawesi Province of Indonesia. Theoretical Framework: This study aims to elucidate the cognitive mechanisms of representativeness bias and the anchoring-adjustment heuristic, which may impact the behavior of individual budget planners in determining budget amounts for future periods and their reliance on past information. Method: This research employs a quantitative approach with a causal and explanatory study design. In this study, the independent variable is the behavior of public sector budget builders, while the accuracy of their predictions for the future budget of the public sector constitutes the dependent variable. The quantitative approach was selected because it aligns with the research's objective of discerning potential misestimations in the behavior of budgeting teams when determining the budgetary allocations for the upcoming year in various patterns or conditions. The research's respondents are the budgeting teams from various districts and cities in the South Sulawesi Province. To test the research subjects, a heuristic of representativeness and anchoring-adjustment is followed when utilizing patterns of revenue realization from previous years (time series). Results and Discussion: This study found that the average Uncertainty in Budget Planner Predictions for Local Governments in each district and city in South Sulawesi, Indonesia, is consistent and does not exhibit significant differences. This research is highly significant as it can provide a valuable contribution to public sector budget planners in Indonesia when establishing budget amounts for the forthcoming period. Research Implications: This study seeks to contribute to advancing research in the realm of public sector budgeting in South Sulawesi, particularly by providing an overview of the occurrence of overreaction and underreaction behaviors among the planners of Local Own-Source Revenue (PAD) budgets in South Sulawesi Province. Originality/Value: The novelty of this study lies in the empirical validation of the utilization of the concepts of representativeness and anchoring-adjustment in the behavior of public sector budget planners when determining the budget amounts for the upcoming period.

Evaluating Budget Functions for Effective Revenue and Expenditure Planning in Hulu River South District

The public sector budget has a function as a local financial management planning tool. BPKPD district of Hulu River South is an institution that carries out the duties of the local government in the planning of the regional budget. This study is aimed at finding out the application of budget functions as a tool for planning income and expenditure in the BPKPD district of Hulu River South. This study uses a method of quantitative research using a descriptive approach. The study uses three types of measurement analysis to find out the use of budget function as a planning tool, namely, the process of budgeting, the level of effectiveness of budget income, and the degree of efficiency as well as deviations in budget expenditures. The income budget effectiveness rate for 2022 reached 118.60% (more than 100%) with the category of highly effective, coming from three types of regional income. First, Regional Real Income with an efficiency ratio of 87.51% belongs to the effective category. Second, Transfer income with an effectiveness rate of 119.82% belonging to the highly efficient category. The calculation of the expenditure efficiency ratio showed less efficient access, with a ratio of 93.06%. Operations purchases obtained a rate of 75.92% in the efficient category. Capital purchases gained access to efficiency ratios of 91.41%, including the less effective category. Unexpected expenditures reached the rate of efficiency of 17.92%, in the highly efficient categories. Lastly, the transfer spending sector has an efficiency rate of 99.81% in the less efficient category. Secondly, the calculation of the variance analysis in the regional spending sector shows that the entire account in the local spending area has more variance. No spending account has a budget deficit as a result of the realization or achievement of greater income than estimated. The deviation that occurs on the entire account of the shopping sector is favorable.

Public Sector Budgeting in Poland: Challenges and Opportunities in a Changing Economy

This paper examines the challenges faced by Poland's public sector enterprises and organizations as they manage budgets during the country's transition to a market economy. It investigates how traditional budgetary principles interact with new economic development concepts, drawing on development economics to understand the unique context of Poland's systemic shift. The study analyzes empirical data and public finance trends, arguing that maximizing tax revenue through higher burdens is counterproductive. Specifically, the paper explores how escalating tax burdens on public sector units can stifle economic growth and contribute to the expansion of the shadow economy. Instead, the paper proposes a focus on rational and efficient resource allocation within the public sector as a means to bolster budgetary revenues without hindering overall economic development. This study offers valuable insights for policymakers and researchers interested in understanding the complexities of public finance management within transitional economies.

Analysis of the Ratio of Growth, Effectiveness and Budget Efficiency at the Ministry of Religious Affairs of the Republic of Indonesia in 2017 – 2022

A budget is a written plan regarding the activities of an organization which is expressed quantitatively for a certain period or period and is generally expressed in units of money. The Ministry of Religion of the Republic of Indonesia is one of the ministries that has authority over the State revenue and expenditure budget. The Ministry of Religion is ranked 2nd with the largest APBN ceiling after the Police of the Republic of Indonesia. The ratios for assessing financial performance in the Ministry of Religion used in this research include: Growth Ratio, Effectiveness and Efficiency Ratio. This research aims to analyze the level of Growth, Effectiveness and Efficiency Ratios during the 2017-2022 period to see the financial performance of the Ministry of Religion of the Republic of Indonesia. In writing this journal, a quantitative descriptive analysis method was used. The results of this research show that the financial performance of the Ministry of Religion using the Growth Ratio or the Ministry of Religion's budget growth ratio is around 4.39% every year. The Ministry of Religion's budget effectiveness ratio is relatively high at an average level of 112%, which means that budget realization is able to exceed the set targets. The highest achievement of 121% was recorded in 2017. The Ministry of Religion's budget efficiency ratio for 2017-2022 is at an average of 0.97%, which is very efficient considering the nature of the public sector budget, the smaller the efficiency ratio, the better the government's performance.

Social Decision-Making Analysis: A General Approach to Inform Decisions on Resources in the Public Sector

ObjectivesPublic expenditure aims to achieve social objectives by improving a range of socially valuable attributes of benefit (arguments in a social welfare function). Public expenditure is typically allocated to public sector budgets, where budget holders are tasked with meeting a subset of social objectives. MethodsDecision makers require an evidence-based assessment of whether a proposed investment is likely to be worthwhile given existing levels of public expenditure. However, others also require some assessment of whether the overall level and allocation of public expenditure are appropriate. This article proposes a more general theoretical framework for economic evaluation that addresses both these questions. ResultsUsing a stylized example of the economic evaluation of a new intervention in a simplified UK context, we show that this more general framework can support decisions beyond the approval or rejection of single projects. It shows that broader considerations about the level and allocation of public expenditure are possible and necessary when evaluating specific investments, which requires evidence of the range of benefits offered by marginal changes in different types of public expenditure and normative choices of how the attributes of benefit gained and forgone are valued. ConclusionsThe proposed framework shows how to assess the value of a proposed investment and whether and how the overall level of public expenditure and its allocation across public sector budgets might be changed. It highlights that cost-benefit analysis and cost-effectiveness analysis can be viewed as special cases of this framework, identifying the weakness with each.

Infrastructure Development in the UK: Key Drivers and Implementation Challenges.

Infrastructure is a critical factor in fostering strong and sustained economic growth, hence, sufficient attention should be given to the allocation of investment. Although UK infrastructure investment have risen in line with the global trend, the level of investment remains in the lower percentile when compared to other leading countries such as Singapore and China. The study examines the challenges of infrastructure development in the UK and explored the policies required to stimulate investment. Using semi-structured interviews, the views of key stakeholders involved in infrastructure operating across key sectors of transport and energy were captured to gain an insight into the key policy drivers of infrastructure investment. Findings from the research suggests that policy changes are required to stimulate significant investment if the UK is to become a world leader in infrastructure. Key criticisms of UK infrastructure policy focussed on comparatively low level of investment, inadequate collaboration between key stakeholders, and the regional bias of investment in favour of London which disproportionately affects the Northern regions. To facilitate economic growth, the identification of future investible pipeline of infrastructure projects, increasing collaboration with local stakeholders and addressing the regional biases will be critical to ensure synergy and ownership and to scale up the implementation of UK future infrastructure development plans. Considerations should also be given to the need to set up infrastructure banks similar to what is in operation in other countries such as China and Singapore to stimulate private investment and to complement public sector budget allocations. Improving infrastructure project implementation through institutional coordination will boost economic growth post Brexit, support the development of new trading agreements and enhance the country’s economic performance after the pandemic.

Public Sector Budget Implementation and Performance: A Comparative Analysis of Southwestern States in Nigeria

The study investigated the effect of budget implementation on performance: a comparative analysis of six Southwest states in Nigeria over the period of 10 years spanning from 2012- 2021. This is done specifically to explore the effect of capital expenditure, recurrent expenditure, statutory allocation and intervention fund on per-capita income in Nigeria. Ex-post-facto research design was employed in the study because the data were obtained secondarily from National Bureau of Statistics. Data collected were analysed using descriptive statistics and regression analysis. Finding revealed that capital expenditure, recurrent expenditure, statutory allocation and intervention fund have positive and significant effect on performance in Oyo, Ogun and Lagos states respectively. It however revealed that capital expenditure and statutory allocation have positive and significant effect in Osun state, while capital expenditure and intervention fund was discovered to portrayed a positive and significant effect on performance in Ondo state, and the study further showed that statutory allocation and intervention fund have positive and significant effect on performance in Ekiti state. The implication of this result is that Lagos state as well as Ogun state and Oyo state have shown an exemplary example in its budget implementation which significantly affected performance, the role statutory allocation and intervention have been judiciously used and channeled to respective quarters in the case of Lagos, Ogun and Oyo states whereas, the reverse is the same in Ondo, Osun and Ekiti States, as such, statutory allocation and

PRIVATE FINANCE INITIATIVE AS A TOOL FOR BRIDGING THE INFRASTRUCTURAL DEFICIT IN DEVELOPING ECONOMIES

A critical factor in the economic growth of any nation is its infrastructural development. For most developing countries, such as South Africa, the infrastructural deficit has been experienced over the years mainly due to low gross domestic savings. A viable tool in shoring up for the shortfalls of infrastructural investment is the private finance initiative (PFI), as it makes provision for private sector financing of construction projects. On this basis, this study seeks to assess the drivers of PFIs in the South African construction industry. Using a quantitative approach, the study elicited data from relevant stakeholders in the built environment. Retrieved data were subjected to data analysis methods such as mean item score, Kruskal Wallis h-test, and SNK post-hoc test. The analysis findings show that the most significant propelling measure for PFIs in the South African construction industry is overcoming public sector budget constraints, timely project completion, and improved service delivery. Based on the study’s conclusion, recommendations were made to help propagate the inclusion of PFI as an alternative for project financing in South Africa.

REFORM OF PUBLIC SERVICE PROVISION SYSTEMS: WORLDWIDE EXPERIENCE

Ukraine's orientation towards European and Euro-Atlantic integration, effective operations, and the recovery of Ukraine during wartime and the post-war period require reforms aimed at providing public services in modern conditions, aligning their provision with relevant standards, and improving their quality. This publication addresses the necessity of studying global practices in public service delivery to develop recommendations for enhancing their quality under contemporary circumstances in Ukraine. The analysis conducted in the publication can be summarized from several perspectives: Decentralization: the degree of decentralization was different. Where governments were concerned with maintaining same and equal access to services, such as in education services in France and Austria, strong central control was maintained, and local authority was limited. Accountability: N. Flynn and L. Strehl expressed serious concern in their work about the confusion regarding who is accountable to whom, for what, and when. In the Netherlands, for example, it was unclear who would be responsible for the deterioration of the quality of public services at the municipal level if budgetary funds proved to be insufficient. Personnel Management: In all the countries considered at that time, there was an increase in investments in the development and training of public service providers. A growing customer-oriented approach was identified. However, not all training programs focused on service management and customer orientation. For instance, training to promote the development of an active citizenship formation was widespread, which was considered important for ensuring the provision of quality public services. Financial Management: Budgeting was a common practice, and there was a departure from traditional approaches to public sector budgeting. Overall, changes in financial management in all countries highlighted the importance of business planning and measuring the effectiveness of public authorities' activities. Interaction with the Private Sector: The authors found evidence that public services in many countries were disillusioned with market forces and market competition, often associated with the inability of markets to deliver promised improvements. As a result, in countries such as New Zealand, the Netherlands, and Sweden, policies began to emphasize non-competitive ways of enhancing the efficiency of public service organizations. Different reasons are cited from country to country. In the UK, for instance, a high level of expenses related to contracting and administering public service delivery contracts by private organizations was noted. Despite many changes aimed at improving the quality of public services, which were initially made to achieve specific political goals, there were also entirely objective grounds for implementing these changes. Factors driving and continuing to drive the necessity of introducing changes both to the public services themselves and to the management systems of their provision including: reduction of government expenditures in some areas and their increase in others; emphasis on the public as a client and customer choice; replacement of administrators with managers in the public service; blurring the lines between private and public sectors; demographic changes such as aging; introduction of performance management in public authority activities; adoption of information technologies in public authority activities; increased citizen discernment regarding public services; the influence of globalization on domestic markets; extensive privatization of state and municipal property.

PENGUKURAN KINERJA PEMERINTAH DAERAH DENGAN MENGGUNAKAN PRINSIP VALUE FOR MONEY PADA DINAS PUPR KABUPATEN ACEH BARAT

The problems examined in this study are the Budget Realization Report, reports on changes in Over budget Balance, Balance Sheet, Operational Reports, Changes in Equity Reports, Notes to Financial Statements. In the accountability of this report it was concluded that the PUPR Office of West Aceh District. In its development, the public sector budget system has become a multifunctional policy instrument that is used as a tool to achieve organizational goals. APBD is a regional government financial work plan that will be used as a basis for carrying out development in the region. In preparing, discussing, determining and supervising the implementation of the budget, it is not enough just to look at the size of the budget, but the output must also be produced economically, efficiently and effectively for the development of the region. In this study, the authors wish to analyze the performance of the West Aceh district government by using the principle of value for money which is based on three economic ratios, the ratio of efficiency and ratio of effectiveness. The results of the study show that the performance of the West Aceh District government for the 2020-2021 period as a whole is not good.

Reducing maternal and neonatal mortality through integrated and sustainability-focused programming in Zambia.

Reducing maternal and neonatal mortality is a critical health priority within Zambia and globally. Although evidence-based clinical interventions can prevent a majority of these deaths, scalable and sustainable delivery of interventions across low-resource settings remains uneven, particularly across rural and marginalized communities. The Zambian Ministry of Health and the Clinton Health Access Initiative implemented an integrated sexual, reproductive, maternal, and newborn health (SRMNH) program in Northern Province aimed at dramatically reducing mortality over four years. Interventions were implemented between 2018 and 2021 across 141 government-owned health facilities covering all 12 districts of Northern Province, the poorest performing province nationwide and home to over 1.4 million people, around six pillars of an integrated health system. Data on institutional delivery and antenatal and postnatal care were collected through the national Health Management Information System (HMIS). A community-based system for capturing birth outcomes was established using existing government tools and community volunteers since HMIS did not include community-based mortality. Baseline and endline population-based mortality rates were compared for program-supported areas. From the earliest period of population-based mortality reporting in 2019 to program end in 2021, there were statistically significant decreases of 41%, 45%, and 43% in maternal, neonatal, and perinatal mortality rates respectively. Between 2017 to 2021, institutional maternal, neonatal, and perinatal mortality rates across entirety of Northern Province reduced by 12%, 40%, and 41%, respectively. Service readiness and coverage for SRMNH services improved dramatically, supporting increased numbers of patients. Significant mortality reductions were achieved over a relatively short period, reinforced through an emphasis on sustainability and strengthening existing government systems. These results were attained through a consciously cost-efficient approach backed by substantially lower levels of external investment relative to prior programs, allowing many of the interventions to be successfully adopted by government within public sector budgets.

Gender Analysis of Education Budgets in Pakistan: Case Studies of Punjab and Sindh

This study provides a gender analysis of public sector budgets in education sector. An in-depth analysis of pre-primary to secondary level education budgetary allocations and spending in Pakistan of 2016-18 has been conducted. The study identifies that 22.8 million children aging between 5-16 years were out of school in 2016-17. In Sindh, a vast portion of girls’ public schools is functioning without basic facilities while the state of basic facilities is relatively better in the Punjab. Furthermore, study finds noticeable gender disparities in budgets for public education sector. The study concluded that in order to ensure sufficient allocations to promote girls’ education budget making process needs to be reconfigured. The gender lens should be introduced at a very early stage where budget call circulars are being sent to the departments concerned.

Implications of Public Sector Budget Deficit Financing On Economic Growth in Nigeria: 2003-2018

This term paper titled: “Implications of public sector budget deficit financing on Economic growth in Nigeria” was carried out with the intention of ascertaining which financial options out of many financial alternative is the best for the Nigerian government. The research work gave considerations to the cost and risk associated to each finance option over the period 2003-2018. After review of several literatures and appropriate theories, the empirical analysis was carried out. The work employed regression analysis using log-linear of real GDP as the dependent variable and explanatory variables (Bank credit to government- BCG, Non-bank public credit - NBP, ways and means - WM, and external deficit financing - EXDF). The result revealed that budget financing through bank credit and Non-bank public are positively proportional to the growth rate of Nigerian economy. It further showed that financing through ways and means is inversely related to real GDP growth. The result for external financing exhibited inverse relationship with the growth rate of Nigerian economy but the coefficient of EXDF was not statistically significant. It was recommended that government should weigh the risks associated with external borrowing as well as consider the medium and long term repercussions of a possible default on debt servicing

IMPLICATIONS OF PUBLIC SECTOR BUDGET DEFICIT FINANCING ON ECONOMIC GROWTH IN NIGERIA: 2003-2018

This term paper titled: “Implications of public sector budget deficit financing on Economic growth in Nigeria” was carried out with the intention of ascertaining which financial options out of many financial alternative is the best for the Nigerian government. The research work gave considerations to the cost and risk associated to each finance option over the period 2003-2018.After review of several literatures and appropriate theories, the empirical analysis was carried out. The work employed regression analysis using log-linear of real GDP as the dependent variable and explanatory variables (Bank credit to government- BCG, Non-bank public credit - NBP, ways and means - WM, and external deficit financing - EXDF). The result revealed that budget financing through bank credit and Non-bank public are positively proportional to the growth rate of Nigerian economy. It further showed that financing through ways and means is inversely related to real GDP growth. The result for external financing exhibited inverse relationship with the growth rate of Nigerian economy but the coefficient of EXDF was not statistically significant. It was recommended that government should weigh the risks associated with external borrowing as well as consider the medium and long-term repercussions of a possible default on debt servicing.

Analisis Penyusunan Anggaran Bantuan Operasional PAUD Nur Permata Hijau Kabupaten Banggai

The purpose of this study was to determine the budgeting of operational assistance fund the Early Childhood Education (PAUD) Nur Permata Hijau in Lumpoknyo Village, Banggai Regency. The data analysis method used in this research is a qualitative descriptive analysis technique to thoroughly describe the implementation of BOP budgeting reporting in PAUD Nur Permata Hijau and is associated with public sector accounting, especially in public sector budgeting. The results showed that the preparation of the budget for school operational funds at PAUD Nur Pemmata Hijau in 2019 was in accordance with the Regulation of the Minister of Education and Culture Number 4 of 2019. The preparation of the operational budget for PAUD Nur Permata Hijau was effective and efficient because the budget was absorbed in its entirety and the use of the budget was already very appropriate for student activities.

Public Sector Budgeting for Disaster Risk Reduction: Opportunities, Challenges, and Threats within the SADC Region

Public Sector Budgeting for Disaster Risk Reduction: Opportunities, Challenges, and Threats within the SADC Region

Mediating Factors That Influence The Relation Between Budget Congruence and Managerial Performance in Public Services Universities in Indonesia

This study aimed to examine whether budget goal commitment, psychological capital, and management accounting system were able to play a role in mediating the relation between budget congruence and managerial performance in public services universities in Indonesia. This study used a quantitative survey approach; the sample of the study consisted of 82 leaders from State Islamic Universities in the province of East Java, Indonesia. The data were analyzed by using a causal mediation analysis procedure. The result found that psychological capital and management accounting systems were able to mediate the budget congruence-managerial performance relation. Meanwhile, budget goal commitment in the context of public sector budgeting has not succeeded in proving its role as a mediating variable. Further analysis showed that contingency theory is still relevant to be used in business and public budgeting in relation to different behavioural conditions. In addition, this research has implications for evaluating the managerial performance of leaders in public services universities in Indonesia to pay attention on managerial involvement at lower levels in achieving organizational goals.

The cost of suburbanization: spending on environmental protection

ABSTRACT The goal of this paper is to assess disparities between different municipalities and evaluate the relevance of these differences to suburbs in comparison to other areas. The analysis is based on a methodological framework of CEPA environmental expenditure corresponding with the Czech public-sector budget financial structure. This study has three essential areas for Czech municipal expenses: water protection, waste management and biodiversity and landscape protection corresponding with public municipal greenery. We used the Ministry of Finance State Treasury Monitor dataset, providing data on municipal expenses for all 6,255 municipalities in 2010-2015 and compared relevant expenses in the Czech Republic's OECD metropolitan and non-metropolitan areas. The results show that municipalities with the most outstanding water protection expenses per capita are exposed to a suburbanisation burden and are situated in neighbourhoods of Czech metropolitan centres. Disparities between municipalities clearly show that water protection costs per capita in less populous municipalities are three times those in bigger towns. The most extraordinary spending on maintaining public greenery was found in the metropolitan cores, showing that there is greater demand for public greenery. Regarding waste management, there is no apparent relationship with localisation in suburban areas.

National culture and public-sector budgeting: the mediating role of country-level institutions using a structural equation modeling approach

PurposeDespite cultural dimensions being included in hundreds of business and management research studies, there have been relatively few studies in public-sector accounting that include the use of cultural dimensions. It is posited that national cultural variables impact the institutions, which, in turn, have an influence on public-sector budgeting. The study aims to contribute to the literature by examining these relations in 31 countries.Design/methodology/approachThese relationships are empirically evaluated by structural equation modeling using measures of national culture from Global Leadership and Organizational Behavior Effectiveness (GLOBE) study and Worldwide Governance Indicators (WGIs) measures named institutions from the World Bank. Furthermore, measures of public-sector budgeting are evaluated in which public-sector budgeting is classified according to the legislative power of the purse and budget transparency.FindingsGenerally, findings reveal that institutions mediate the relationship among national cultural variables and budgeting at the national level. By that means, budgeting in a given nation is linked to the nation's supporting institutions which, in turn, are influenced by the national culture of those who maintain them. Particularly, power distance and uncertainty avoidance impact budgeting through the full mediation of institutions.Research limitations/implicationsThe World Bank's database used for the institutions contained over 200 countries (Kaufmann et al., 2007); the GLOBE cultural database (House et al., 2004) contained data for 62 societies; the public-sector budgeting (Qi and Mensah, 2011) included power of the purse and budgeting transparency country scores for 49 countries and the datasets comprised 31 nations, mostly from Organisation for Economic Co-operation and Development (OECD) countries. While smaller than we would have preferred, the size is consistent with other international studies (for instance: Waldman et al., 2006; Kwok and Tadesse, 2006).Practical implicationsThe findings of the paper suggest that any plan to improve a nation's budgeting should consider the links between budgeting, supporting institutions and the culture of those that run them. The formal adoption of new methods and standards by supporting institutions may not be enough without accompanying efforts to transform national culture.Originality/valueThe theoretical contribution of the paper is discussed further in the paper.

Do non-financial performance and accrual-based cost information affect public sector budgeting?

PurposeThis study aims to provide evidence of how budget officers use non-financial and accrual-based cost information in the budgeting process and how the usage of this information is influenced by financial constraints.Design/methodology/approachA randomized survey-based field experiment investigating budget officers in 546 Japanese local governments (LGs) was conducted. This allowed us to identify the budget officers' decision-making in the public sector budgeting process by creating and analyzing primary data with regression models.FindingsWe found that budget officers suppress budget amounts based on non-financial information of good performances. Under fiscal constraints, officers further reduce budget amounts using information on high accrual-based costs and poor non-financial performance.Originality/valueOur survey-based field experiment allowed us to obtain primary data from officers making budget decisions. To the best of our knowledge, this study provides the first evidence that non-financial good and poor performance information and accrual-based cost information affect budget officers' decision-making under financial constrain.