Nazarzoda Parviz
ID 1B6048
Course: Public Finance and Budgeting Homework III
Q1) Explain Niskansen’s characterization of bureaucrats as budget maximizing, as well as critiques of that view, in the contexts of your home country’s bureaucracy. How have changes in the current economy and modern public management practices altered the budget behavior of bureaucrats in your home country? (300 words)
Niskanen (1971) analyzes the activities of bureaucratic structures from cost and benefit analysis point of view. In this regard, he pays attention to such traditional issues as:
The output and its volume, the costs of its production;
If conditions change, how does it affect costs and output?
With reference to the bureau, this meant a balance between
…show more content…
It should be noted that this buyer is a group of political officials to whom the bureau delivers public goods. In turn, the bureau also acts as a monopolist (monopoly supplier of its services). There is a situation of a bilateral monopoly, the feature of which is the exchange of promised products for the budget, which is allocated by the bureau. As in the situation of any bilateral monopoly, there is no single equilibrium here. Niskanen’s model speaks of two basic components of the bureau:
(1) For the bureaucrat, the goal is to maximize the budget of his bureau. When maximizing, attention is paid to the conditions of costs and demand, as well as under the constraint that the budget should be equal to or exceed the minimum amount of total costs at an equilibrium
…show more content…
For example, compare a line-item with a performance format in terms of contributing to citizen understanding about government budgeting and services. (300 words)
According to Lim (2017), there is five budget formats: Lump-sum, Line item, Program, Performance and Zero-based (p. 4). Each of these formats has its advantages and disadvantages.
Line-item budgeting. It is good for government to use this format, because Line-item format remains a popular and useful format, because of its easiness of control and clear reports. To the advantages of line-item possible to attribute strict control over the activities of state organs.
The disadvantages include the complexity of comparison with goals. In this type of budget, it is also difficult to compare results with costs.
Performance format also has clear objectives, i.e. strategic plan, not only activities are measured by this format. Performance format comes from flexible execution. It is only then, when a state agency or organ, has showed a good performance, may request more budget. It has good reporting, benchmarks – when it is necessary to set the target. It has performance data with goals and means, i.e. performance
Compares five to seven expense results with budget expectations and describes possible reason for variances and strategies to keep results aligned with expectations
There is a plethora of criticisms about the effectiveness of the Bureaucracy. Even during the 19th century, as Wilson writes, the Post Office “was an organization marred by inefficiency and corruption”. With an appointment standard such as the “spoils system”, where individuals or groups are granted high level positions based on political favors alone, corruption is almost a certainty. The political aspect of the Bureaucracy was prevalent in the military for over 100 years, as Wilson states “the size and deployment of the military establishment in this country was governed entirely by decisions made by political leaders on political grounds”. Political favors and factors plague our government, including the Bureaucracy. A by-product of these political favors and corruptions are stagnancy and mediocrity. An example of this, as
For example interest rates, the cost of raw materials including fuel, the number of sales or orders that we make and in turn all of these rely on other factors. The best therefore that can be done when developing a budget is to look at all the factors that are likely to affect the budget and decide how to take account of each one. If there is a previous budget (last year or last month) then it is sensible to look at how this has been achieved or not as the case may be, and what factors affected the outcome. If we are looking at monthly budgets it might be a better comparison to look at the same month twelve months ago as well as the previous months. The more factors we take into consideration when estimating a budget, the more accurate our budget will be.
In his book, Bureaucracy: What Government Agencies do and why they do it, James Q. Wilson’s main objective is to better define the behavior of governmental bureaucracy, believing traditional organizational and economic theory does not adequately explain their actions. Wilson believes that government agencies are doomed to be perceived as inefficient entities by the public. He gives examples of commonly held perceptions of bureaucracies and reveals how these are mostly misconceptions. He points to the environment of bureaucracy, where rules and procedures, dictate goals, along with context, constraints, values, and norms.
|2.1 Explain the purpose of agreeing the format in which a budget will be presented |Question 1 Page 2 |
The budget process is a powerful planning tool for government to make important resource decisions. According the Carney and Schoenfeld‘s article on How to read a Budget, an operating budget is a reflection of government’s financial plans. When a budget is
This research paper is a brief discussion of budget management analysis. Budgeting is the key to financial management, and is the key to translates an organization goals or plan into money. Budgeting is a rough estimate of how much a company will need to get their work done, and provides the basis for evaluating performance, a source of motivation, coordinating business activities, a tool for management communication and instructions to employees. Without a budget an organization would be like a driver, driving blinded without instructions or any sense of direction, that’s how important a budget is to every organization and individual likewise (Clark, 2005).
The fifth narrative “Street-Level Bureaucracy: The Critical Role of Street-Level Bureaucrats written by Michael Lipsky in 1980 whose ideas can be observed in the Reforming the Government School of though. The reading analyzed the significance of the actions of public workers to determine discretionary judgement when delivering services to the public. Government workers are the face of the government and the representation of the conditions of policy to the people. The problem that government workers face is the constant changed in policies and procedures that tend to directly affect the demands of citizens and services. Lipsky argued, “They are constantly torn by the demands of service recipients to improve effectiveness and responsiveness to improve effectiveness and responsiveness and by the demands of citizen groups to improve the efficacy and efficiency of government services” (p. 402). The function of government workers is usually questioned by citizens since they feel that any decision of street-level bureaucrats scan affect the stability of the people’s lives. In addition to the problems in relationships with clients, the increased in administrative cost for the government’s services was questioned and placed under scrutiny.
A company's budget serves as a guideline in planning and committing costs in order to meet tactical and strategic goals. Tactical goals such as providing budgetary costs for daily operations, and strategic objectives that include R&D, production, marketing, and distribution are all part of the budgeting process. Serving as a guideline rather than being set in stone, the budget is a snapshot of manager's "best thinking at the time it is prepared." (Marshall, 2003, p.496) The budget is a method in which to reign-in discretionary spending, and will likely show variances between what costs have been anticipated and what costs are actually incurred.
The word “bureaucracy” has a negative connotation to many people. The fact is that our current system of government would not be able to survive without bureaucracies. The bureaucracy has become the “fourth branch” of the government, it has quasi-legislative and judicial powers and in it’s own field its authority is rarely challenged. The presence of these large, inefficient structures is necessary if the American people want to continue receiving the benefits that they expect.
Americans depend on government bureaucracies to accomplish most of what we expect from government, and we are oftentimes critical of a bureaucracy’s handling of its responsibilities. Bureaucracy is essential for carrying out the tasks of government. As government bureaucracies grew in the twentieth century, new management techniques sought to promote greater efficiency. The reorganization of the government to create the Department of Homeland Security and the Bush administration’s simultaneous push to contract out jobs to private employers raises the question as to whether the government or the private sector can best manage our national security. Ironically, the criticism of the bureaucracy may be a product
The Development of a country to a large extent depends on how the bureaucracy of that country functions. As bureaucracy gives input in policy making, implements those and evaluate outcome of an implemented policy,
All organizations strive to streamline operations, which in turn should lead to saving money. Fighting the wasting of resources should be a top priority for any government entity and particularly for supervisors, managers, and executives. In the public sector this is particularly true because the citizens in effect supply the resources wasted. The public trust should not be abused by careless or needless spending. However, because of the bureaucratic nature of any government agency, some waste cannot readily be avoided. The laws and regulations that have been duly enacted to secure justified expenditures in and of themselves can cause waste.
Budget is time-consuming, especially if it involves a poorly managed company. The budget only pays attention to the quantitative aspect of business while neglecting the qualitative aspects. It does not consider the quality of services or goods and therefore inconsiderate of customers’ satisfaction. Another disadvantage of a budget is that it is inaccurate. A firm rarely “makes budget.” The hope is that the business activity will be close to the budget, but it could be off considerably and lead to bad hiring, spending and production decisions. This is because budget preparation is based on assumptions and thereby changes in the business environment could lead to unachievable
Budgetary control is part of overall organisation control and is concerned primarily with the control of performance. The use of budgetary control in performance management has of late taken on greater importance especially as a more integrative control mechanism for the organisation. Discuss.