Sustainable budgeting and financial balance: Which lever will you pull?
European Journal of Operational Research
; 2023.
Article
in English
| Scopus | ID: covidwho-2240041
ABSTRACT
During the past few decades, countries have experienced a remarkable increase in local expenditure levels to address rising local needs. However, the limited availability of financial resources, exacerbated first by the 2008 financial crisis and then by Covid19 crisis, has called for budget restrictions usually imposed by higher levels of government. In this paper, we evaluate the impact of a balance budget rule enforcement, exploring its effect on the local government cost efficiency and, in particular, considering the complex trade-off between efficiency and equity. Specifically, our identification strategy considers the exogenous introduction of a new budget balance rule that requires local governments to respect both an annual and a longer-term equilibrium criterion. The difference-in-differences analysis builds on a rich panel dataset covering all the public functions. We find that, on average, the budget rule enforcement exerted a positive effect on local government efficiency. © 2023 Elsevier B.V.
Full text:
Available
Collection:
Databases of international organizations
Database:
Scopus
Language:
English
Journal:
European Journal of Operational Research
Year:
2023
Document Type:
Article
Similar
MEDLINE
...
LILACS
LIS