Public Budgeting in Context: Structure, Law, Reform and Results

Praise for Public Budgeting in Context “The scope of this book is breathtaking. It includes not only federal, state, and local budgeting in the US, complete with historical development and as embedded in the literature, but also provides a running comparison of the US with a variety of other countries. A careful reading of this book provides not only a series of answers to traditional questions, but also questions for the curious, about how legal, political structure, and culture influence budget process and outcomes.” —Irene Rubin, Ph.D, Professor Emerita, Department of Public Administration, Northern Illinois University “Over the years, there have been a lot of good books written about US national budgeting. There have been some good books written about state and local budgeting. There have even been a small number that deal with budgeting in an international context. I am not aware, however, of any book that has attempted to do what this book does, which is to look at federal, subnational, and international budgeting in a single volume. It will prove to be an invaluable resource for students and researchers in a world where budgeting, like governing, is ubiquitous.” —Philip Joyce, Ph.D, Professor of Public Policy, University of Maryland “Good budgeting is critical to good government and the success of nations. In this book, Katherine Willoughby summons her impressive domestic and international experience to bring us a masterful accounting of how to achieve just that.” —Jorge Martinez–Vazquez, Ph.D, Regents Professor of Economics and Director, International Center for Public Policy, Georgia State University “At a time when the public sector struggles with fiscal challenges, this timely book provides clear and accessible explanation and analysis of major budget issues drawn from the experiences of governments at all levels both in the US and abroad. This book will upgrade the budget literacy of students seeking an intelligent introduction to the field as well as deepen the understanding of those with more advanced expertise and experience.” —Paul Posner, Ph.D, Director of Public Administration, George Mason University

Preface xiii Acknowledgments xvii About the Author xix O N E Overview of Modern Public Budgeting 1 What Is a Budget? 3 Macro– and Micro–Budgeting 7 Public and Private Budgeting 8 The Role and Size of Government 10 Modeling the Budgetary Process 13 Budget Principles 20 Conclusion 21 Discussion Questions 22 Notes 22 References 23 TWO Budget Foundations in Selected Countries 25 Developing Versus Industrialized Countries 26 Comparing Budgeting Systems 32 Conclusion 56 Discussion Questions 57 Notes 57 References 61 T H R E E Budget Law and History of the US Federal Government 65 Early Budgeting 66 An Executive Budget Process Is Born 69 Congress Strives for Credibility 73 Budget Balance and Management Improvement 76 Then and Now, Budget Numbers 82 Adherence to Rule of Law 86 Conclusion 87 Discussion Questions 88 Notes 89 References 91 F O U R Budget Foundations in US States 95 The Fiscal Landscape of States: Two Centuries of Growth 96 Legal Foundations for State Budgeting 98 Credit Ratings, GASB Standards, and Professional Guidelines 117 Conclusion 122 Discussion Questions 123 Notes 123 References 126 F I V E Budget Foundations in US Local Governments 129 The Multiplicity and Responsibilities of Local Governments 130 Local Government Powers 134 Local Government Fiscal Stress and Bankruptcy 143 Conclusion 149 Discussion Questions 150 Notes 151 References 152 S I X Executive Leadership and the Budget Agenda 155 Presidential versus Parliamentary Systems 156 Strategic Planning and the Budget Process 158 Public Leadership: Generating a Budget Plan 159 Executive Leadership in Parliamentary Systems 160 US Presidential Leadership and Budgeting 162 Presidential Job Performance 167 State Executive Leadership and Budgeting 169 US Local Leadership 182 Leadership in a Strong Mayor City Government 185 Conclusion 190 Discussion Questions 191 Notes 192 References 193 S E V E N Budget Powers of the Legislative Branch 197 Measuring Legislative Powers in the Budgetary Process 198 Legislative Budgeting in Select Governments 206 Legislative Reform 224 Conclusion 225 Discussion Questions 225 Notes 226 References 228 E I G H T Public Budgeting and the Courts: Judicial Influence on Economies and Budgets 231 The Judiciary and the Economy 232 Courts and Public Policy 233 The Judiciary and the Budget 240 Judges, Courts, and Corruption 245 Conclusion 260 Discussion Questions 261 Notes 261 References 263 N I N E The Bureaucracy, Citizens, the Media, and Public Budgets 267 The Budget–Maximizing Bureaucrat 268 Budget Execution Practices 271 Citizens and Budgets 281 Citizen Participation in US State Budgeting 287 The Media and Public Budgets 290 Conclusion 295 Discussion Questions 295 Notes 296 References 298 T E N Budget Mechanics and Reforms 303 Budget Types 304 Budget Cycles and Timelines 309 Best Practices 315 Budget Reforms 320 Conclusion 335 Discussion Questions 335 Notes 336 References 338 E L E V E N Funding with Taxes and Other Revenues 341 Equity 343 Efficiency 345 Adequacy 347 Transparency 348 Collectability 351 Taxes in the United States and Guatemala 358 Intergovernmental Revenues 366 Conclusion 373 Discussion Questions 373 Notes 374 References 375 TWELVE The Results of Government Spending 379 Human Rights Budget Work 380 Government Presence and Prosperity 384 Government Spending by Function 386 Social Indicators: Quality of Life 386 Country Competitiveness 391 Budget Reform in Italy 399 Health Care in Italy: Changing Budget Orientation 404 Budget Institutions, Reform, and Results 408 Conclusion 410 Discussion Questions 411 Notes 412 References 412 List of Abbreviations and Acronyms 415 Index 421

KATHERINE G. WILLOUGHBY, Ph.D, is Professor of Public Management and Policy at the Andrew Young School of Policy Studies at Georgia State University. Dr. Willoughby teaches, writes, and conducts research in the areas of public budgeting, public financial management, public policy analysis and evaluation, strategic management, and organizational decision making. She is a prolific contributor to key scholarly and practitioner journals, including Public Administration Review, Public Performance Management Review , and Public Budgeting & Finance .