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Endogenous public sector budgeting: to centralize or not?

Endogenous public sector budgeting: to centralize or not? In this paper the impact of budget size on a government's choice to centralize or decentralize the budgetary process is investigated using asymmetric information, differing preferences, and endogenous budgetary arrangements. The central government chooses between a budgetary process that excludes the regional board (centralization) and one that includes the board (decentralization) in the determination of program budget levels. It is predicted that the central government will decentralize the budgetary process at low and centralize at high overall budget levels. Switching from decentralization to centralization is predicted to result in a reduction in the budget allocated to the regional board. JEL Classification: H3, C7 http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Canadian Journal of Economics/Revue Canadienne D'économique Wiley

Endogenous public sector budgeting: to centralize or not?

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References (27)

Publisher
Wiley
Copyright
Copyright © 2001 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0008-4085
eISSN
1540-5982
DOI
10.1111/0008-4085.00086
Publisher site
See Article on Publisher Site

Abstract

In this paper the impact of budget size on a government's choice to centralize or decentralize the budgetary process is investigated using asymmetric information, differing preferences, and endogenous budgetary arrangements. The central government chooses between a budgetary process that excludes the regional board (centralization) and one that includes the board (decentralization) in the determination of program budget levels. It is predicted that the central government will decentralize the budgetary process at low and centralize at high overall budget levels. Switching from decentralization to centralization is predicted to result in a reduction in the budget allocated to the regional board. JEL Classification: H3, C7

Journal

Canadian Journal of Economics/Revue Canadienne D'économique – Wiley

Published: May 1, 2001

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