An econometric analysis of evaluation and improvement of budget performance in local government
Keywords:
Local governments, financial-budget indicators, budget performance, factor analysis, multiple regression analysisAbstract
This paper provides a summary of studies focusing on the use of budget information in performance evaluation and
improvement during budget governance. The survey shows that studies have accepted that this information is used in different
ways. In this case, various factors have been identified for evaluating and improving budget performance in local governments.
Despite this breadth of analysis, a critical review of the literature shows that in recent years local governments need to improve
budget indicators to increase performance. Furthermore, this empirical study tends to guide local governments in choosing the
right methodology for improving and evaluating budget performance. The research was conducted in local governments through
a questionnaire that gave very important recommendations for budget performance.
References
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and Management pages.134-150.
[2]. Kroll, Alexander. & Moynihan, Donald. 2015."Does Training Matter? Evidence from
Performance Management Reforms. “PAR- Public Administration Review Pages 411-420,
https://doi.org/10.1111/puar.12331.
[3]. Mitchell, David. & Thurmaier, Kurt. 2016. "(Re)Defining the Disarticulated Municipality:
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[7]. Anderson, Barry. 2009. "The Changing Role of Parliament in the Budget Process." OECD
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[8]. Anderson, James C. & Gerbing, David W. 1984. "The effect of sampling error on convergence,
improper solutions, and goodness-of-fit indices for maximum likelihood confirmatory factor analysis."
Psychometrical, Volume 49 (2) fq.155-173, 10.1007/BF02294170.
[9]. Bai, Anita., & Hira, Swati. & P. S. Deshpande. 2015. "An Application of Factor Analysis in the
Evaluation of Country Economic Rank." Eleventh International Multi-Conference on Information
Processing-2015 (IMCIP-2015) fq.311 – 317, doi: 10.1016/j.procs.2015.06.036.
[10]. Bailey, Stephen. J. 2004. Strategic Public Finance. New York, N.Y. 10010: First published 2004
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[11]. Bremer, Martina. 2012. "Multiple linear regression-Math 261A." Reliawiki. http://reliawiki.org.
[12]. Campbell, Thomson. 1996. "Investigating structures underlying relationships when variables are
not the focus: Technique and other techniques." Advances in social science methodology (Vol. 4) fq.207-
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[13]. Cleveland, A. Frederic. 1915. Evolution of the Budget Idea in the United States. New York City:
Bureau of Municipal Research, Volume: 62 issue: 1, page(s): 15-35.
[14]. Cretu Carmen-Mihaela et al. 2010. "Budget - Performance Tool in Public Sector." Proceedings of
the 5th WSEAS International Conference on Economy and Management Transformation (Volume I) 360-
368, DOI: 10.13140/2.1.1033.9849.
[15]. Fleischman, Richard. & Marquette, Penny. 1986. "The Origins of Public Budgeting: Municipal
Reformers During the Progressive Era." Public Finance & Budgeting Pages 71-77,
https://doi.org/10.1111/1540-5850.00708, Volume6, Issue1.
[16]. Hallberg Mark., Strauch Rolf., & Hagen Jurgen. 2006. The Design of Fiscal Rules and Forms of
Governance in European Union Countries. London: Pg.338-359, Finance and Capital Markets Series.
Palgrave Macmillan, London. https://doi.org/10.1057/9780230271791_6.
[17]. Henson, Rubin. & Roberts, J. Kyle. 2006. "Use of Exploratory Factor Analysis in Published
Research Common Errors and Some Comment on Improved Practice." Educational and Psychological
Measurement fq.393-416.DOI: 10.1177/0013164405282485.
[18]. Jonson, Richard. & Wichern, Dean. 2007. Applied Multivariate Statistical Analysis. Sixth Edition.
London: Printed in the United States of America.
[19]. Khan, Aman. 2019. Fundamentals of Public Budgeting and Finance. USA: Palgrave Macmillan,
Cham, DOI https://doi.org/10.1007/978-3-030-19226-6, pages.1-438.
[20]. Khan, Aman. & Hildreth, W. Bartley. 2002. Budget Theory in the Public Sector. United States of
America: Praeger, pg. 320, pg.63.
[21]. Kieffer, Kevin. 1999. "An introductory primer on the appropriate use of exploratory and
confirmatory factor." Research in the Schools 75-92, Corpus ID: 142586849.
[22]. Lulaj, Enkeleda. 2019. "The Impact and Effects of Financial Reporting in the Public Accounting,
econometric analysis model: Revenue and Expenditures for period 2007-2017." European Journal of
Economics and Business Studies Articles 46-66, DOI: http://dx.doi.org/10.26417/ejes.v5i1.
[23]. Lulaj, R. Enkeleda. 2019. "Transparency and accountability in the public budget, empirical study
(data analysis) in local governments-municipalities." International Education Research Vol. 7(No. 4)
pages. 69-86.
[24]. Moynihan, Donald. & Beazley, Ivor. 2016. Toward next-generation performance budgeting:
lessons from the experiences of seven reforming countries. Washington, D.C.: World Bank Group,
http://documents.worldbank.org/curated/en/356081478497402740/Toward-next-generation-performance-
budgeting-lessons-from-the-experiences-of-seven-reforming-countries, Pg.1-187.
[25]. O’Rourke, Nrom. & Hatcher, Larry. 2013. A Step-by-Step Approach to Using SAS® for Factor
Analysis and Structural Equation Modeling, Second Edition. Copyright © 2013, SAS Institute Inc., Cary,
NC, USA.
[26]. OECD. 2002. OECD Best Practices for Budget Transparency. Paris: OECD Publications Service,
Pg.1-10.
[27]. Rencher, Alvin M. 2002. Methods of Multivariate Analysis, Second Edition. New York: Printed
in the United States of America.
[28]. Robinson, Marc. 2007. Performance Budgeting- Linking Funding and Results. New York:
International Monetary Fund, DOI 10.1057/9781137001528.
[29]. Rubin, Irene. 1996. "Budgeting for Accountability: Municipal Budgeting for the 1990s." Public
Budgeting & Finance Pages 112-132, https://doi.org/10.1111/1540-5850.01071.
[30]. Schick, Allen. 1966. "Th e Road to PPB: The Stages of Budget Reform." Public Administration
Review 26(6): 243–58.
[31]. Shah, Anwar. 2007. Participatory Budgeting. Public Sector Governance and Accountability.
Washington, DC: © World Bank, https://openknowledge.worldbank.org/handle/10986/6640 License: CC
BY 3.0 IGO.
[32]. Smith, W. Robert. & Lynch, D. Thomas. 2003. Public Budgeting in America (5th Edition).
Florida: Pearson; 5 edition, 320 pages.
[33]. Thompson, Bruce., & Daniel, Larry. 1996. "Factor analytic evidence for the construct validity of
scores: A historical overview and some guidelines. “Educational and Psychological Measurement, 56(2)
fq.197-208, https://aquila.usm.edu/fac_pubs/5558.
[34]. Tyer, Charlie. & Willand, Jennifer. 1997. Public budgeting in America: a twentieth century
retrospective. Columbia, S.C: Institute for Public Service and Policy Research.
performance of county government of Nakuru, Kenya." International Journal of Economics, Commerce
and Management pages.134-150.
[2]. Kroll, Alexander. & Moynihan, Donald. 2015."Does Training Matter? Evidence from
Performance Management Reforms. “PAR- Public Administration Review Pages 411-420,
https://doi.org/10.1111/puar.12331.
[3]. Mitchell, David. & Thurmaier, Kurt. 2016. "(Re)Defining the Disarticulated Municipality:
Budget Accountability for Networked Governance." Public Budgeting & Finance Pages 47-67,
Volume36, Issue1, https://doi.org/10.1111/pbaf.12087.
[4]. Musgrave, A. Richard. & Musgrave, B. Peggy.1989. Public Finance in theory and practice.
California: Exclusive rights by McGraw-Hill Book Co- Singapore, pages. 1-650.
[5]. Wildavsky, Aaron. 1965. The Politics of the Budgetary Process. Boston: The Yale Law Journal
Company, Inc. pages.
[6]. Adongo, K. Odour. & Jagongo, Ambrose.2013. "Budgetary Control as a Measure of Financial
Performance of State Corporations in Kenya." International Journal of Accounting and Taxation, Vol. 1
No. 1, December 2013 pages.38-57, www.aripd.org/ijat.
[7]. Anderson, Barry. 2009. "The Changing Role of Parliament in the Budget Process." OECD
Journal on Budgeting Volume 2009/1, Pg.1-11, https://www.oecd.org/.
[8]. Anderson, James C. & Gerbing, David W. 1984. "The effect of sampling error on convergence,
improper solutions, and goodness-of-fit indices for maximum likelihood confirmatory factor analysis."
Psychometrical, Volume 49 (2) fq.155-173, 10.1007/BF02294170.
[9]. Bai, Anita., & Hira, Swati. & P. S. Deshpande. 2015. "An Application of Factor Analysis in the
Evaluation of Country Economic Rank." Eleventh International Multi-Conference on Information
Processing-2015 (IMCIP-2015) fq.311 – 317, doi: 10.1016/j.procs.2015.06.036.
[10]. Bailey, Stephen. J. 2004. Strategic Public Finance. New York, N.Y. 10010: First published 2004
by Palgrave Macmillan, Pg.1-285, https://link.springer.com/book/10.1007/978-1-4039-4394-1.
[11]. Bremer, Martina. 2012. "Multiple linear regression-Math 261A." Reliawiki. http://reliawiki.org.
[12]. Campbell, Thomson. 1996. "Investigating structures underlying relationships when variables are
not the focus: Technique and other techniques." Advances in social science methodology (Vol. 4) fq.207-
218.
[13]. Cleveland, A. Frederic. 1915. Evolution of the Budget Idea in the United States. New York City:
Bureau of Municipal Research, Volume: 62 issue: 1, page(s): 15-35.
[14]. Cretu Carmen-Mihaela et al. 2010. "Budget - Performance Tool in Public Sector." Proceedings of
the 5th WSEAS International Conference on Economy and Management Transformation (Volume I) 360-
368, DOI: 10.13140/2.1.1033.9849.
[15]. Fleischman, Richard. & Marquette, Penny. 1986. "The Origins of Public Budgeting: Municipal
Reformers During the Progressive Era." Public Finance & Budgeting Pages 71-77,
https://doi.org/10.1111/1540-5850.00708, Volume6, Issue1.
[16]. Hallberg Mark., Strauch Rolf., & Hagen Jurgen. 2006. The Design of Fiscal Rules and Forms of
Governance in European Union Countries. London: Pg.338-359, Finance and Capital Markets Series.
Palgrave Macmillan, London. https://doi.org/10.1057/9780230271791_6.
[17]. Henson, Rubin. & Roberts, J. Kyle. 2006. "Use of Exploratory Factor Analysis in Published
Research Common Errors and Some Comment on Improved Practice." Educational and Psychological
Measurement fq.393-416.DOI: 10.1177/0013164405282485.
[18]. Jonson, Richard. & Wichern, Dean. 2007. Applied Multivariate Statistical Analysis. Sixth Edition.
London: Printed in the United States of America.
[19]. Khan, Aman. 2019. Fundamentals of Public Budgeting and Finance. USA: Palgrave Macmillan,
Cham, DOI https://doi.org/10.1007/978-3-030-19226-6, pages.1-438.
[20]. Khan, Aman. & Hildreth, W. Bartley. 2002. Budget Theory in the Public Sector. United States of
America: Praeger, pg. 320, pg.63.
[21]. Kieffer, Kevin. 1999. "An introductory primer on the appropriate use of exploratory and
confirmatory factor." Research in the Schools 75-92, Corpus ID: 142586849.
[22]. Lulaj, Enkeleda. 2019. "The Impact and Effects of Financial Reporting in the Public Accounting,
econometric analysis model: Revenue and Expenditures for period 2007-2017." European Journal of
Economics and Business Studies Articles 46-66, DOI: http://dx.doi.org/10.26417/ejes.v5i1.
[23]. Lulaj, R. Enkeleda. 2019. "Transparency and accountability in the public budget, empirical study
(data analysis) in local governments-municipalities." International Education Research Vol. 7(No. 4)
pages. 69-86.
[24]. Moynihan, Donald. & Beazley, Ivor. 2016. Toward next-generation performance budgeting:
lessons from the experiences of seven reforming countries. Washington, D.C.: World Bank Group,
http://documents.worldbank.org/curated/en/356081478497402740/Toward-next-generation-performance-
budgeting-lessons-from-the-experiences-of-seven-reforming-countries, Pg.1-187.
[25]. O’Rourke, Nrom. & Hatcher, Larry. 2013. A Step-by-Step Approach to Using SAS® for Factor
Analysis and Structural Equation Modeling, Second Edition. Copyright © 2013, SAS Institute Inc., Cary,
NC, USA.
[26]. OECD. 2002. OECD Best Practices for Budget Transparency. Paris: OECD Publications Service,
Pg.1-10.
[27]. Rencher, Alvin M. 2002. Methods of Multivariate Analysis, Second Edition. New York: Printed
in the United States of America.
[28]. Robinson, Marc. 2007. Performance Budgeting- Linking Funding and Results. New York:
International Monetary Fund, DOI 10.1057/9781137001528.
[29]. Rubin, Irene. 1996. "Budgeting for Accountability: Municipal Budgeting for the 1990s." Public
Budgeting & Finance Pages 112-132, https://doi.org/10.1111/1540-5850.01071.
[30]. Schick, Allen. 1966. "Th e Road to PPB: The Stages of Budget Reform." Public Administration
Review 26(6): 243–58.
[31]. Shah, Anwar. 2007. Participatory Budgeting. Public Sector Governance and Accountability.
Washington, DC: © World Bank, https://openknowledge.worldbank.org/handle/10986/6640 License: CC
BY 3.0 IGO.
[32]. Smith, W. Robert. & Lynch, D. Thomas. 2003. Public Budgeting in America (5th Edition).
Florida: Pearson; 5 edition, 320 pages.
[33]. Thompson, Bruce., & Daniel, Larry. 1996. "Factor analytic evidence for the construct validity of
scores: A historical overview and some guidelines. “Educational and Psychological Measurement, 56(2)
fq.197-208, https://aquila.usm.edu/fac_pubs/5558.
[34]. Tyer, Charlie. & Willand, Jennifer. 1997. Public budgeting in America: a twentieth century
retrospective. Columbia, S.C: Institute for Public Service and Policy Research.
Published
2021-02-01
How to Cite
Lulaj, E., & Muthmainnah. (2021). An econometric analysis of evaluation and improvement of budget performance in local government: Array. Acta Universitatis Danubius. Œconomica, 17(1). Retrieved from https://dj.univ-danubius.ro/index.php/AUDOE/article/view/798
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Business Administration and Business Economics
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