Budget processes and commitment to fiscal discipline

Hagen, Jürgen von; Harden, Ian

doi:10.1016/0014-2921(94)00084-d

Cited by 468 publications

(311 citation statements)

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“…Concerns over the sustainability of fiscal policy were in evidence prior to the Global Financial Crisis [57][58][59], but the deficits and debts that followed, provided a platform for raising questions of fiscal discipline [60,61]. Accounting for the increase in public debt, drawing on public choice theories, what have been described as notions of democratic failure [62], resulting from a combination of political distortions and weak public financial management were cited as drivers behind a rise in government deficits and debt [63,64].…”

Section: Independent Fiscal Councils (Ifcs)mentioning

confidence: 99%

An examination of independent fiscal councils and their orientation to the future and policy making

Connor

2017

Eur J Futures Res

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The aim of this paper is to review the rationale, nature and operation of independent fiscal councils (IFCs) in order to gain insights into how futures are being configured at executive levels of government and to examine how futures could be incorporated in policy making. The emphasis IFCs have placed on non-partisanship, transparency and forecasting is viewed as reflecting a particular understanding of the problem of public debt and a limited understanding of the future and policy making. Located within the context of increasing technocratic tendencies, it is argued that IFCs can be seen as part of efforts to secure the depoliticisation of policy making. Attempts to secure the de-politicisation of policy making may at best, be considered laudable, but naïve, and at worst, represents an ideological sleight of hand in attempts to colonise the future. Moving forward, it is argued that strategic foresight can make a vital contribution to an open form of policy making that deepens and extends an understanding of what the future could be -the necessary ficta of policy making.

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Section: Independent Fiscal Councils (Ifcs)mentioning

confidence: 99%

An examination of independent fiscal councils and their orientation to the future and policy making

Connor

2017

Eur J Futures Res

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“…In presidential systems, the budget process is modeled as the sequential assignment of policy decisions (first, size, and then allocation of the budget across sectors or projects) to different government 6 In this short paper we do not dedicate much space to the very prolific and influential literature on the role of budget institutions in fiscal outcomes, even though it has provided the inspiration and conceptual framework for the work we develop here. Among some of the most influential works see von Hagen (1991), Alesina and Perotti (1995), von Hagen and Harden (1995), Alesina et al (1999), Hallerberg et al (2007), Hallerberg, Strauch and von Hagen (2009), and Blume and Voigt (2013). branches (the executive and the legislature), 7 or to different committees within the legislature. 8 This results in "separation of powers" during the approval stage.…”

Section: Political Regimes Separation Of Powers and The Budget Processmentioning

confidence: 99%

The Economic Effects of Constitutions: Do Budget Institutions Make Forms of Government More Alike?

Ardanaz

Scartascini

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. Terms of use: Documents inThe unauthorized commercial use of Bank documents is prohibited and may be punishable under the Bank's policies and/or applicable laws. Copyright ©Inter-American Development Bank. This working paper may be reproduced for any non-commercial purpose. It may also be reproduced in any academic journal indexed by the American Economic Association's EconLit, with previous consent by the Inter-American Development Bank (IDB), provided that the IDB is credited and that the author(s) receive no income from the publication. According to an influential theoretical argument, presidential systems tend to present smaller governments because the separation between those who decide the size of the fiscal purse and those who allocate it creates incentives for lower public expenditures. In practice, forms of government vary greatly, and budget institutions-the rules according to which budgets are drafted, approved, and implemented-are one (of many) drivers of such variation. This paper argues that under more hierarchical budget rules, presidential and parliamentary systems generate a similar incentive structure for the executive branch in shaping the size of government. This hypothesis is tested on a broad cross-section of countries, presidentialism is found to have a negative impact on government size only when executive discretion in the budget process is low (that is, in a context of separation of powers). However, the negative effect of presidentialism on expenditures vanishes or is even reversed when the executive's discretion over the budget process is higher. Hence, budget institutions that impose restrictions on the legislature's ability to amend budget proposals can make political regimes look more alike in terms of fiscal outcomes. Cataloging-in-Publication JEL classifications: D72, D78, H61

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“…As a result, assuming universalistic logrolls, 'the degree of inefficiency in project scale… is an increasing function of the number of districts ' (p. 654). Von Hagen and Harden (1995) explore the fiscal impact of different cabinet structures. Amongst others, they show that a process where spending ministers independently develop their spending plans results in a budget that is larger than optimal for the government as a whole.…”

Section: Background and Hypothesesmentioning

confidence: 99%

“…Their operationalisation of this variable is based on counting a selection of sectoral portfolios plus finance ministers and related positions, such as ministers responsible for the budget (p. 219). The inclusion of the latter does not make theoretical sense, since a central role of finance ministers is to safeguard fiscal discipline vis-à-vis spending ministers (e.g., Von Hagen & Harden 1995;Schick 2001;Jensen et al 2003). I discuss this issue in detail in the following section.…”

Section: Background and Hypothesesmentioning

confidence: 99%

“…We cannot simply assume that seat shares translate into portfolio shares in quite such mechanical ways elsewhere (Amorim Neto 2006;Cheibub 2007). 5 In addition, the model by Von Hagen and Harden (1995) shows that the fiscal effect of an increase in the number of spending ministers depends upon the strategic power of the finance minister in the budget process. Unfortunately, I have insufficient institutional data on the balance of power between the finance minister and spending ministers to test this prediction.…”

Section: Background and Hypothesesmentioning

confidence: 99%

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