Article Abstract:
This article calls for reform of the U.S. Federal budget from two perspectives, preparation and content. The first aspect of reform proposes to amend the Budget and Accounting Act of 1921 by eliminating the requirement for an executive budget. It proposes replacing the executive budget submission with a budget prepared by a joint executive-legislative council. While the decision-making process for approval of the budget would remain the same, the council-proposed budget would eliminate several time consuming issues of disagreement such as whose economic estimates are used. The second aspect of reform proposes an examination of the contents of the budget. The current budget focuses on agency appropriations and the debt/surplus figure. Many more issues such as unfunded pension liabilities, true costs of credit, value of government-owned assets and the number of appropriations are largely neglected. This aspect of the budget should be examined by a non-partisan group of experts to make recommendations for an improvement in the informational content of the budget. Improved information could help support sound decision-making. The article contends that we can preserve the constitutional separation of powers dealing with the budget while we simply improve the methods used to prepare the document itself, and once the document is prepared it would be structured so it can be examined in a meaningful manner by interested citizens in order to ascertain the financial conditions of the country. (Reprinted by permission of the publisher).
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Article Abstract:
Viewing budgets as contracts, transaction cost theory focuses on the costs of negotiating and enforcing the myriad political agreements by which policymakers allocate the government's resources. This essay provides an overview of transaction cost theory and its implications for the design of budgeting institutions. It contrasts the behavioural premises (bounded rationality and opportunism) of the transaction cost approach with those of more traditional budgetary theories, and examines whether commitment and agency costs have structured budget actors' institutional choices. Investigation of the usage of key budget instruments - entitlements, multi-year appropriations, and tax expenditures - suggests that Congress has been more discriminating in its institutional choices than is commonly supposed. Sensitivity to the importance of transaction costs would increase the effectiveness of budget reforms. (Reprinted by permission of the publisher).
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Article Abstract:
This article explores how to answer the normative question: 'What is a good budgetary process?' It proposes that a deliberative process involving practitioners and academics could identify and justify achievably ambitious standards for budgetary processes, and the best practices for attaining those standards. In hopes of beginning that deliberation, the article sets out a prototype model, and then applies the model to the federal budgetary process. (Reprinted by permission of the publisher).
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