Understanding Public Budgeting: A Nation's Economic Regulation

1146 Words3 Pages
bulb-icon

Recommended: Disadvantages of line item budgeting

Chapter I. Public budgeting
The financial mechanism is one of the most important mechanism by which the state implements socio-economic regulation. The financial mechanism is a system of management of public budgeting, the main component of which is the state budget. Budget is a form of creating and spending of funds intended for financial provision of tasks and functions of the state and local government. The public budget plays a significant role in the political and economic life of the country. According to Willoughby, (2014) public budget is a government expenditures and the taxes, which supporting such expenditures. Under the public budget one can understand the budget of Tajikistan and the budgets of its regions. Public budgeting is …show more content…

If Incrementalism is adopted in budget process, it could be appropriate in researching the behaviours and strategy of policy actors; and could be a useful model in the process of administrative reforms. It could also be a good tool in the process of public management. Thus, Incrementalism may answer to key question by using previous historical data of what kind of budget has been used by the country in previous years, but it is not sufficient in the process of adopting new budget to count only on base budget. So, the Incrementalism is using base budget in the process of adopting new budget, and uses only inflationary adjustment from previous years and “the increments: some percentage increase from the base” and it “leads to a focus on micro-budgeting” (Lim, 2017, pp. 17-18). Then, when new budget is adopted, it’s has not too much of differences from previous year’s …show more content…

In 1990s there has been a lot of protesters who conclude that Incrementalism is out of date, and it is in the past. However, there are authors, who thinks that Incrementalism is alive, and in good condition (White, 1985). I think, Incrementalism is a useful theory with a system of realistic views about public budget process, which could influence the process of decision making. Based on understandings of political strategies, people’s and social needs it may excellently explain and predict the budget. That is why, it would be reasonable to improve the Incrementalism (Homework 2).
 Line item budgeting.
Functioning already for a long time type of budgeting Line-item budgeting, is a popular in all state organs. Line-item budgeting is useful and popular, because it has clear reports and easy to control (Lim, 2017, p. 35).
In Line-item budgeting, funds are distributed between certain items or objects of expenditure. Expenses for necessary items for work are calculated for the next year so that the corresponding service has only a limited opportunity, if there is a justification, to increase by a certain amount the amount of expenses provided for under this item in the previous financial year. The main advantage of this system is strict control over the activities of funding

Show More
Related

  • Federal Budget Dbq

    1355 Words  | 3 Pages

    Our Preamble lists five main goals that are required to help create a strong and stable society within our country. However, money is required in order to achieve these goals. We get this money from the Federal Budget which is the yearly amount we receive in order to better our country. The question here is, are we slicing the pie correctly in relation to the federal budget? In each of three budget clusters, the U.S Government should make adjustments in the way it is distributing money by making changes involving the Big Five, the Middle Five, and the Little Guys.

    Read More

  • The Australian Federal Government Budget

    2731 Words  | 6 Pages

    The Australian Budget is an annually published document which details the Federal Government's plans to affect the level of economic activity, resource allocation, and income distribution through the use of fiscal policy. It describes the framework which the government intends to follow during the next financial year which will result in the attainment of their objectives. The budget is a publication of the government's plans regarding the use of fiscal policy, and is published to parliament and the general public on “budget night”, so as to allow open dissemination about the status of public finances and to promote transparency in Australia's fiscal policy.

    Read More

  • Federal Budget Analysis

    551 Words  | 2 Pages

    If the government changes the way they spend the budget, then they can change the way our government is ran. According to document C we spend 83% of the budget on “The Big Five”, which are the five main categories in the budget.We need to take 10%

    Read More

  • The Evolution of the Federal Budget Process

    997 Words  | 2 Pages

    For government budgeting to be effective, the process that guides it must be an evolving one. As the government gets bigger, it will most likely destabilize the existing method. Therefore, it must change to keep pace with the demands and growth of the country. The process must be capable of handling the complexity of our nation and its multifaceted needs so it will always need revisions and restructuring to face these new challenges. Its ultimate goal must be to reinforce the government and strengthen the country.

    Read More

  • Persuasive Essay On Defense Budget

    1588 Words  | 4 Pages

    Budgeting is a familiar term to most American families. Dictionary.com defines budgeting as an estimate, often itemized, of expected income and expense for a given period in the future. In order to avoid debt, bankruptcy, or overspending it is common to create a spreadsheet of some sort tracking your spending and income. On a grander scheme, the Unites States has to budget as well.

    Read More

  • Essay On Government Spending

    1956 Words  | 4 Pages

    Government has filled a spot in the American Society that once belonged to the churches. People regularly attended church throughout American history and use the church as a place of instruction, guidance, support, and charity. The government now fills a larger role in American’s lives and at the same time church attendance is diminishing. The government is growing at a rapid pace and the expanded social programs have more influence on Americans than the church. America is a nation of immigrants which most fled from large governments (sometime oppressive) and now the American government is poised to grow larger than ever. The ideas behind the growth of government can have noble intentions, but more often than not results in wasted money and harm to the peoples it intends to help, and is replacing the roles churches once filled as a guiding and supportive structure in peoples lives.

    Read More

  • Budget Analysis

    1842 Words  | 4 Pages

    p. 496). See also p. 495. The budget process, according to Marshall, is to "develop and communicate" how an organization's economic, industry, and organizational strategies will be effected within the budgeted time frame. People within the organization, from planners, economists, and managers, contribute to facets of the strategic budget process in order to meet organizational needs. Upper management then typically approves those budgets....

    Read More

  • NM Budget Analysis

    555 Words  | 2 Pages

    It is of utmost importance that NM understands the finances, materials, and human resource management, aside from the regular knowledge of quality, patient safety, and clinical practices. The three types of budgets that a NM should be familiar with in preparing for fiscal planning are personnel budget, operating budget, and capital budget (Marquis & Huston, 2015). The personnel budget is the largest spending which accounts for the salary expense of the productive and non-productive time of employees (Marquis & Huston, 2015, p. 228). Meanwhile, the operating budget discloses the expenses that change in response to the volume of service provided such as electricity, supplies, repairs, and maintenance (Marquis & Huston, 2015, p. 214). In addition, the capital budget refers to the purchase of buildings or major equipment (Marquis & Huston, 2015, p.228).

    Read More

  • The Pros and Cons of Participative Budgeting

    1276 Words  | 3 Pages

    Participative budgeting has the advantage of transferring information from the subordinate to their superior This knowledge is likely to be more reliable and accurate as the subordinate has direct contact with the activity and therefore is in the best position to make budget estimates. Participative Budgeting also gives subordinates the opportunity to discuss organisational issues with superiors, in which an exchange of information and ideas can help to solve problems and agree future actions (Nouri & Parker 1998). This transferral of information is important particularly when dealing with a matter of high task difficulty as, the more difficult a task, the greater the need for consultation with subordinates. Participative budgeting has a higher performance rate when dealing with more difficult and more volatile tasks than non consultative budgeting (Lau & Tan 1998)

    Read More

  • Essay On Beyond Budgeting

    1789 Words  | 4 Pages

    Traditional Budgeting is still a very popular technique and is widely used by the organizations across the globe.(Dugdale & Lyne, 2006).Environment is changing and hence the budgets should promote the innovations and keeping key employee need rather than restricting them (Daum, 2002).

    Read More

  • The Advantages And Disadvantages Of Line-Item Budgeting

    840 Words  | 2 Pages

    Line item budgeting categorizes various expenses and places them in list format on a document for budgetary purposes. This type of budgeting is considered the heartbeat of budgeting due to the systematic method by which it controls revenue and expenses, this is made evident when Tyer and Willand (1992), pointed out “Statutory or administrative controls could be imposed on the transfer of funds from one-line item to another, or between broad categories of expenditure.” According to Schick (1971), “line item budgets were attractive to legislative officials because they did not focus explicit attention on substantive policy issues or choices.”

    Read More

  • Municipal Budgeting and Revenue

    2489 Words  | 5 Pages

    Every government entity has a primary goal, which is to be as efficient and effective as possible while expending the smallest amount of resources. In addition, the resources expended cannot be more than the resources received as revenues. The budgeting process is a tool that assists government entities in being both efficient and effective. Before a budget can be adequately prepared, you must first understand the budgeting concept and secondly be knowledgeable of budget types.

    Read More

  • The Importance Of Economics On Personal Life

    1804 Words  | 4 Pages

    It requires an adequate and sound organizational structure, that is, there must be a definite assignment of responsibility for each function of the enterprise. Budgeting compels all the members of management, from the top to bottom to participate in the establishment of goals and plans. Budgeting compels departmental managers to make plans in harmony with the other departments and of the entire enterprise. Budgeting helps the management to put down in figures what is necessary for a satisfactory performance. Budgeting helps the management to plan for the most economical use of labor, material and capital. Budgeting tends to remove the cloud of uncertainty that exists in many organizations, especially among lower levels of management, relative to basic policies and objectives. Budgeting promotes an understanding among members of management of their co-workers' problems. Budgeting force management to give adequate attention to the effects of general business conditions. Budgeting aids in obtaining bank credit as banks commonly require a projection of future operations and cash flows to support

    Read More

  • Importance Of Financial Policies

    2443 Words  | 5 Pages

    4. A budget is a plan of action: A budget is a plan because it concerns actions to be taken rather than a passive acceptance of future trends. Planning is the establishment of objectives and the formulation, evaluation and selection of the policies, strategies, tactics and action required to achieve the objectives. Like all plans, budgets seldom turn out to be totally correct predictions of the future. Conditions may change during the budget period, which renders the budget to be inaccurate. Even so, budget is useful in guiding the actions of

    Read More

  • The Roles of the National Budget

    624 Words  | 2 Pages

    The national budget is the main instrument through which governments collect resources from the economy, in a sufficient and appropriate manner; and allocate and use those resources responsively, efficiently and effectively (Todorovic & Djordjevic, 2009). The work of public budget has increased extremely more complicated, abstruse and worrying (Hou, 2006, p.730).

    Read More

More about Understanding Public Budgeting: A Nation's Economic Regulation

Open Document