Do state balanced budget requirements matter? Testing two explanatory frameworks

Yilin Hou, Daniel L. Smith

Research output: Contribution to journalArticle

40 Scopus citations

Abstract

Balanced budget requirements (BBRs) affect all aspects of financial operations. Previous studies relied on characterizations that highlight a constitutional-statutory distinction. Hou and Smith (Public Budgeting & Finance 26(3):22-45, 2006) instead propose a political-technical construct. This article uses probit estimation, six measures of balance, and long panels to test which framework offers more explanatory power. The findings suggest that BBRs matter to varying degrees. Technical requirements exert bigger effects than political ones, the effects are more obvious on narrower than broader measures of balance and in the later phases of the budget cycle, and the political-technical construct offers more explanatory power than the constitutional-statutory distinction.

Original languageEnglish (US)
Pages (from-to)57-79
Number of pages23
JournalPublic Choice
Volume145
Issue number1
DOIs
StatePublished - Jan 1 2010
Externally publishedYes

Keywords

  • Balanced budget requirements
  • Budgeting
  • Fiscal policy
  • Institutions

ASJC Scopus subject areas

  • Sociology and Political Science
  • Economics and Econometrics

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