Capital Budgeting and Management Practices: Smoothing Out Rough Spots in Government Outlays

Abstract

Public capital budgeting and management literature recommends long‐term capital and fiscal planning practices to prevent large fluctuations in outlays caused by fiscal stresses. This study extends the literature by examining the effects of long‐term capital planning and management practices such as the use of a capital budget, separate impact analyses, and the use of bond financing and dedicated revenue sources on capital spending volatility. The empirical results confirm that several of these practices smooth out state government capital outlays that vary because of socio‐economic and financial factors.

Don’t Pass Deferred Maintenance Costs to the Next Generation! The Effects of Politics on State Highway Maintenance Spending

“…In the context of U.S. subnational governments, specifically, state highway spending is higher in pre-election and election years under spoils system, or political patronage; yet civil service reforms smooth U.S. state highway spending over the gubernatorial electoral cycle (Bostashvili & Ujhelyi, 2019). In addition, while Wang and Hou’s (2009) empirical examination of the effect of a gubernatorial election year on U.S. state capital outlay volatility is positive but not statistically significant over the 1989–2004 period, Srithongrung’s (2018) research shows that it is negative and significant over the 1988 to 2012 period.…”

Aplikasi Capital Asset Pricing Model dalam Evaluasi Kelayakan Investasi Daerah

“…Dalam konteks pemerintah, termasuk pemerintah daerah, investasi menjadi salah satu sarana untuk meningkatkan pertumbuhan ekonomi daerah (Buana et al, 2018), yang pada gilirannya akan bermanfaat bagi kesejahteraan masyarakat umum (Purnamasari, 2017). Perencanaan penganggaran modal oleh pemerintah yang dilakukan secara baik akan bermanfaat untuk menjaga keuangan pemerintah ketika terjadi guncangan krisis (Srithongrung, 2018).…”

“…Hasil analisis mendukung pernyataan (Srithongrung, 2018) bahwa perencanaan penganggaran modal pemerintah yang dilakukan secara komprehensif bermanfaat untuk menjaga keuangan pemerintah ketika terjadi guncangan krisis. Selain itu, analisis mendukung penelitian terdahulu tentang CAPM yang menemukan bahwa pendekatan CAPM dinilai lebih baik digunakan dibanding metode lain karena kesederhanaan penggunaannya (Afzal & Haiying, 2020;Mehta & Afzelius, 2017).…”

35 Years of Public Capital Budgeting: A Review and Future Research Agenda

“…Many scholars suggest the normative model of rational capital management practices, including multi-year capital planning, project management, and infrastructure assessment programs to improve efficiency and effectiveness in public investment (Aronson and Schwartz, 2004;Dupont-Morales and Harris, 1994;Ermasova, 2012Ermasova, , 2013Frankel and Wachs, 2017;Jacobs, 2008;Srithongrung, 2008Srithongrung, , 2018Srithongrung, Ermasova, and Yusuf, 2019;Yusuf and Srithongrung, 2017). Based on author's definition of capital budgeting and the normative model of rational capital management practices, this study proposes Strategic Capital Budgeting and Management Model (Figure 2).…”

“…Many scholars highlight the importance of capital budgeting research (Bozeman, 1984;Chen, 2016Chen, , 2018Pagano and Perry, 2008;Srithongrung, Ermasova and Yusuf, 2019;Steiss, 2005;van der Hoek, 1996;Wie and Srithongrung, 2017). Recent notable studies (e.g., Chen, 2016Chen, , 2017Chen, , 2018Srithongrung, 2018;Srithongrung, Ermasova, and Yusuf, 2019) provide new dimensions to capital budgeting issues in public budgeting research. However, the researchers need to pay more attention to some unexplored areas in capital budgeting field.…”