Chapter 2 Public Budgeting and Finance

 political (political science)  economic (economics)  accountability/control (business)  managerial/administrative (public administration)  organizational (organization theory)

 line item -- emphasize control ◦ pushes policy into background ◦ minimizes conflict  program budget -- emphasize policy ◦ what should government do ◦ requires more analysis  performance budget -- emphasize management ◦ productivity of specific tasks, not overall goals ◦ administrative outcomes

 Federal: ◦ economic and political perspectives ◦ expenditure driven ◦ entitlements ◦ defense  State/Local: ◦ organizational and administrative perspectives ◦ revenue driven ◦ more unified executive control ◦ more issues concerning citizen input

Tensions:  politics v administration in public administration theory ◦ role of citizens is unclear  representation v direct participation ◦ low trust in government  call for participation ◦ public interest or special interests?  bureaucratic expertise v access to government ◦ budgeting is technical and complex ◦ role of information and education

 Theory: a framework for accumulating knowledge  Normative, descriptive, positive ◦ normative -- what should be ◦ descriptive -- what is ◦ positive -- what will be (predictions) “On what basis should it be decided to allocate X dollars to activity A instead of B”

◦ normative theory impossible -- utopian ◦ descriptive theory: incrementalism  how decisions are made (process or outcome?)  how strategies selected  main theory today but partially discredited  Rubin: field lacks good theory ◦ need to merge political and technical ◦ recognize importance of process ◦ complexity of disciplines

 how much can revenue estimates be politicized before other means are found?  how much of the political can be treated technically without loss of political accountability?  how does the political or technical become more dominant at one stage or another or in various circumstances?  when does executive v legislative have upper hand?  does citizen participation in resource allocation increase support for government?

The New Public Management:  Accountability for outcomes  Flexibility  Decentralization  Deregulation  Performance Measurement

Traditional  focus on control  centralized  private exercise of admin power  line item format  formulas  minimal flexibility for managers  accountability for inputs Contemporary  Focus on policy/performance  decentralized  public sharing of information  program format  priorities  maximum flexibility for managers  accountability for outcomes

 Technical aspects of budgeting ◦ withhold or distort information  Political aspects of budgeting ◦ political ethics issues—who benefits? who pays?  Traditional budgetary ethics ◦ appropriate use of funds  Contemporary budgetary ethics ◦ appropriate use of discretion ◦ ethical use of information for accountability

 End of Chapter 2  By ; Munawar Hameed