The international situation vis-á-vis the adoption of accrual budgetingCortes, Josep L.
doi: 10.1108/JPBAFM-18-01-2006-B001pmid: N/A
In this paper an analysis is made of significant accounting and budgetary reforms that have recently been introduced within the framework of a broader reform called New Public Management. These reforms have led to the adoption of the accrual basis in accounting in many developed countries (i.e. the effects of transactions or events are recognized when they take place, irrespective of the moment when cash is paid or received). However, in 2003 it has only been adopted in budgeting by three of them: New Zealand, Australia and the United Kingdom. In this paper the international situation is analyzed with a view to the future adoption of the accrual basis in budgeting.
Fiscal decentralization and fiscal equalization within regions: the case of RussiaBahl, Roy; Wallace, Sally
doi: 10.1108/JPBAFM-18-01-2006-B002pmid: N/A
The impact of fiscal decentralization on equalization between regions has received significant attention but there has been much less research of the impact of decentralization on equalization within regions. Theory suggests that the tradeoff between local fiscal autonomy and equalization ought to be most pronounced at the sub-region level where rural-urban disparities in the level of development are substantial. This paper is an empirical analysis of the impact of fiscal decentralization on equalization within one Russian region, Leningrad (State). We show that the regional government uses a mixture of fiscal instruments to strike a balance between giving more budgetary autonomy to local governments and eliminating the disparities among them. We also develop a method for studying this tradeoff between decentralization and equalization when only limited data are available. Finally, we argue and demonstrate that without a detailed understanding of the institutional arrangement for intergovernmental fiscal relations, one cannot evaluate the equalization or decentralization implications.
Consistent underestimation bias, the asymmetrical loss function, and homogeneous sources of bias in state revenue forecastsVoorhees, William R.
doi: 10.1108/JPBAFM-18-01-2006-B003pmid: N/A
One component of revenue forecast error has been attributed to the phenomena of consistent underestimation bias due asymmetrical loss. Because underestimation of revenue forecast results in less loss to forecasters than overestimations, there appears to be a bias for forecasters to underestimate revenue forecasts. This paper confirms this hypothesis. Additionally, with the greater usage of national forecasting organizations that provide economic forecasts on which revenue forecasts are based, a secondary source of forecaster bias may be present in many state level forecasts. This hypothesis is supported by the increase in number of states using such organizations and a decrease in the standard deviation of the annual mean percentage state forecast error.
Revenue forecasting accuracy in Ohio local governmentsBeckett-Camarata, Jane
doi: 10.1108/JPBAFM-18-01-2006-B004pmid: N/A
Fiscal stress has forced Ohio local governments to pay increasing attention to the importance of revenue forecasting. This paper identifies and examines two Ohio local governments’ revenue forecasting approaches and forecasting accuracy using the case study method. It compares the differences in forecasting methods used. This research finds that informal forecasting methods are used by the county and formal forecasting methods are used by the city, that forecast accuracy varies by level of revenue aggregation using the informal method, and that depending on the revenue source, simple methods are more appropriate than complex methods.
Sources of error in state revenue forecasts or how can the forecast possibly be so far offStinson, Thomas F.
doi: 10.1108/JPBAFM-18-01-2006-B005pmid: N/A
State and federal revenues fell well short of projections in 2002. While revenues normally turn down in a recession, those revenue shortfalls were much greater than would have been expected given how mild the 2001 recession turned out to be. This paper examines some of the reasons for the large forecast variances observed in recent years using specific examples from forecasts made for the state of Minnesota. Key factors identified include inaccurate forecast for U.S. economic growth; inadequate, untimely and inaccurate data; imperfect models; and unrecognized changes in the structure of the economy. These factors came together and reinforced each other, ultimately producing a larger reduction in state revenues than could have been anticipated in advance.