A Theory of Participative Budgeting

2013 ◽  
Vol 89 (3) ◽  
pp. 1025-1050 ◽  
Author(s):  
Mirko S. Heinle ◽  
Nicholas Ross ◽  
Richard E. Saouma
Keyword(s):  
Information Asymmetry ◽  
Private Information ◽  
Agency Costs ◽  
Top Down ◽  
Maximal Level ◽  
Bottom Up ◽  
Budgetary Slack ◽  
Participative Budgeting ◽  
And Performance ◽  
Budgeting Process

ABSTRACT This paper complements the ongoing empirical discussion surrounding participative budgeting by comparing its economic merits relative to a top-down budgeting alternative. In both budgeting regimes, private information is communicated vertically between a principal and a manager. We show that top-down budgeting incurs fewer agency costs than bottom-up budgeting whenever the level of information asymmetry is relatively low. Although the choice between top-down and bottom-up budgeting ultimately determines who receives private information within the firm, we find that both the principal and manager's preferences over the allocation of private information remain qualitatively similar across the two budgeting paradigms. Specifically, while the principal always prefers either minimal or maximal private information, the manager prefers an interim or maximal level of private information regardless of who is privately informed. Last, we use our model to address empirical inconsistencies relating the firm's choice of budgeting process, the resulting budgetary slack, and performance.

A study of performance model development and good governance budgeting

2021 ◽  
Vol 63 (3) ◽  
pp. 301-319
Author(s):  
Haliah Haliah
Keyword(s):  
Information Asymmetry ◽  
Local Governments ◽  
Good Governance ◽  
Positive Relationships ◽  
Budgetary Slack ◽  
Content Type ◽  
And Performance ◽  
Relationship Of ◽  
The Relationship ◽  
Structural Coefficient

Purpose The purpose of this study is to empirically examine the influence of politics, culture and regulation on the budgetary slack and its impact on performance. Specifically, the purpose of this study is to analyze the influence of culture, politics and regulation on budgetary slack and performance in local government. Design/methodology/approach Studies to develop model pengangaran good (good governance budgeting). Using the survey method. The total sample is 300 respondents in seven local governments in West Sulawesi. Respondents from the executive and legislative participate in the preparation of budgets in local government. The research instrument in questionnaire is tested using GSCA. Findings The third structural coefficient of the relationship is positive, indicating all three positive relationships. That is, the higher political, cultural, regulatory, will result in the higher budgetary slack. Thus, if one wants to reduce the budgetary slack, then one needs to reduce the problems of politics, culture and regulations. Other results obtained (a) significant political, cultural and regulatory effect on performance either directly or indirectly through budgetary slack. The sixth structural coefficient of the relationship is positive, indicating all six positive relationships. That is, the higher political, cultural and regulatory variables will lead to higher performance either directly or indirectly through budgetary slack; (b) information asymmetry and budgetary slack significantly affect performance. The second structural coefficient correlation is positive, indicating both positive relationships. That is, the higher information asymmetry and budgetary slack will result in higher performance; (c) budgeting participation moderating influence budgetary slack variables that are false and strengthen moderation. That is, the higher the value of participation budgeting (M) affects increasing influence through budgetary slack (Y1) on the performance (Y2). Research limitations/implications The results showed that the political, cultural and regulatory variables significantly affect the budgetary slack. The structural coefficient of the relationship of these three variables had positive-marked, indicating that the relationship of all those three was positive. Thus, the higher political, cultural and regulatory variables will result in higher budgetary slack. Political, cultural and regulatory variables significantly affected the performance both directly and indirectly through budgetary slack. Structural coefficient of the relationship of those six had positive-marked, indicating that the relationship of all those six was positive. Thus, the higher political, cultural and regulatory variables will lead to higher performance both directly and indirectly through budgetary slack. Originality/value This paper conducts a research on mediation effect of budgetary slack in relationship between politics, culture and regulation toward performance; this research retests the research result from Fisher (2002) about information asymmetry and performance, Rubin (1993) about political, budgetary slack and performance, Scott (2000) about regulatory, budgetary slack and performance, Indriantoro (2000) about mediation of budgetary slack in relationship between politics, culture and regulation toward performance and Mardiasmo (2005) about budgetary slack and performance. No studies have examined this kind of relationship simultaneously. location of study (no previous research for this relationship): local governments in West Sulawesi.

Budget preparers’ perceptions and performance-based budgeting implementation

2019 ◽  
Vol 31 (1) ◽  
pp. 137-156 ◽  
Author(s):  
Farzaneh Jalali Aliabadi ◽  
Bita Mashayekhi ◽  
Graham Gal
Keyword(s):  
Design Methodology ◽  
Loose Coupling ◽  
Structured Interviews ◽  
Organizational Processes ◽  
Budgetary Slack ◽  
Content Type ◽  
And Performance ◽  
Practical Implications ◽  
Budgeting Process

PurposeThe purpose of this paper is to examine the reason for the failure of implementing performance-based budgeting (PBB) at Iranian public universities and research institutes (PURI). This examination focuses on the actors participating in the budget processes and their perceptions.Design/methodology/approachThe study uses grounded theory and employs deep semi-structured interviews of budget preparers at Iranian PURI.FindingsThe results indicate a loose coupling between perceived and regulated budgeting process. This leads to budgetary slack as a barrier for authentic information flow and indeed PBB implementation. In the analysis of the results, the authors suggest some ways to improve the current situation of the budgeting processes at Iranian PURI.Practical implicationsPublic organizations that desire to transform their budgeting system need to consider their actors’ perceptions regarding the budgeting process. By explicitly considering their perceptions the organization may be able to solve any loose coupling as a result of internal, external and behavioral conditions.Originality/valueThis research examines issues that arise in the transformation of organizational processes. The focus on budget processes is critical for organizations which receive most, if not all, of their operational funds from a central authority. This research highlights the role of budget actors’ perceptions in transforming the budgeting process. An important result of this analysis is documenting the existence of loose coupling in the current budgeting process at Iranian PURI. This loose coupling results in slack creation and restricts the implementation of a PBB system. Additionally, this loose coupling limits the flow of authentic information.

Budgetary Participation in Turkey: The Effects of Information Asymmetry, Goal Commitment, and Role Ambiguity on Job Satisfaction and Performance

2012 ◽  
Vol 12 (1) ◽  
pp. 29-54 ◽  
Author(s):  
Johnny Jermias ◽  
Fatih Yigit
Keyword(s):  
Job Satisfaction ◽  
Information Asymmetry ◽  
Role Ambiguity ◽  
Goal Commitment ◽  
Institutional Factors ◽  
Budgetary Process ◽  
Budgetary Participation ◽  
And Performance ◽  
The Impact ◽  
Budgeting Process

ABSTRACT This study empirically investigates the antecedent, mediating, and outcome variables of budgetary participation in Turkey. Turkey is an interesting setting to investigate the impact of budgetary participation on job satisfaction and performance because of its unique cultural and institutional factors. We propose that the information asymmetry between superiors and subordinates creates the need for budgetary participation, and the outcomes of budgetary participation (i.e., job satisfaction and performance) will be mediated by goal commitment and role ambiguity. Based on a questionnaire survey of 194 mid-level managers in Turkey, we find that role ambiguity mediates the budgetary participation–job satisfaction and budgetary participation-performance relationships. The results are consistent with the view that the primary benefit of budgetary participation is to decrease role ambiguity, leading to more job satisfaction and better performance. Furthermore, we find that goal commitment mediates the budgetary participation-performance relationship. This result suggests that participation in the budgeting process increases goal commitment, which in turn leads to better performance. This study will be beneficial for companies in general and for organizations in developing countries in particular to realize that budgetary participation alone does not improve job satisfaction and performance. Rather, it is the increased commitment and decreased role ambiguity that results from managers' participation in the budgetary process that improves job satisfaction and performance. JEL Classifications: D21, G32, L1, M41.

Lower Order Cities and National Urbanization Policies: China and India

1984 ◽  
Vol 16 (4) ◽  
pp. 487-512 ◽  
Author(s):  
T Banerjee ◽  
S Schenk
Keyword(s):  
Developing Countries ◽  
Lower Order ◽  
National Development ◽  
Spatial Development ◽  
Top Down ◽  
Bottom Up ◽  
China And India ◽  
Effective Role ◽  
Rapid Pace ◽  
And Performance

In this paper, we examine the urbanization history and policies of China and India with a special emphasis on the lower order cities. We consider the proposition that, as the developing countries continue to urbanize at a rapid pace, the lower order cities can play a potentially effective role in guiding future urbanization and in securing a balanced economic and spatial development. Through an examination of the urbanization records, policies, and performance of the lower order cities in these two countries we discuss the ‘top-down’ versus the ‘bottom-up’ approaches to urbanization strategy and national development. We conclude by discussing the nature of the differences between the urbanization policies of China and India and the transferability of the Chinese experience to other contexts.

scholarly journals Analisis Proses Perencanaan dan Penganggaran APBD (Studi Kasus pada Pemerintah Kabupaten Bolaang Mongondow)

2017 ◽  
Vol 8 (1) ◽  
Author(s):  
Amna Paputungan ◽  
Ventje Ilat ◽  
Jenny Morasa
Keyword(s):  
Local Government ◽  
State Government ◽  
Financial Management ◽  
Government Regulation ◽  
Local Governance ◽  
Case Study Research ◽  
Top Down ◽  
Bottom Up ◽  
Government Planning ◽  
Budgeting Process

Abstract. Local Government Financial Management is a subsystem of State Government Financia Management. It is also a substantial element in operating local governance effectively, efficiently and economically by fulfilling main pillars of government operation. Those main pillars are transparency, accountability, and participative. These pillars are determined by the Indonesian Government Regulation Number 58 year 2005 and Permendagri Number 13 year 2006. The stages include planning and budgeting process, starting from absorption of people’s aspiration, setting up and the implementation of detailed planning and budgeting as regulated by constitutions. There are obstacles in the planning and budgeting process in Local Government of Bolaang Mongondow. Those obstacles are in Musrenbang stage, Local Government Budgeting Team, process of setting up KUA-PPAS and RKA-SKPD, budget discussion between DPRD members and APBD budgeting staff. This research also discusses their efforts to overcome the obstacles in the process of planning and budgeting of Local Government of BolaangMongondow APBD. This is a qualitative case study research. Data were collected by interviews and observation. Respondents are staff involving in the process of planning and budgeting. They are Government employees and members of DPRD in the Local Government of Bolaang Mongondow. This study undertook more than 2 months for collecting its data.  Results indicate that the process planning and budgeting of APBD in the Local Government of Bolaang Mongondow has not fulfilled yet the regulations. Results also show that transparency is not yet conducted sufficiently and people’s aspirations have not been absorbed optimally, either bottom up or top down approach.  It is, thus, efforts are needed to overcome such obstacles in the process of planning and budgeting of APBD in the Local Government of BolaangMongondow. Keywords: Local government planning and budgeting, people’s aspiration, Permendagri Number 58 year 2005, Permendagri Number 13 year 2006 Abstrak. Pengelolaan Keuangan Daerah merupakan sub system dari Pengelolaan Keuangan Negara serta merupakan elemen pokok dalam penyelenggaraan Pemerintahan Daerah dalam rangka pengelolaan Keuangan Negara dan Daerah yang efektif, efisien dan ekonomis melalui tata kelola pemerintahan yang memenuhi pilar utama yaitu transparansi, akuntabilitas, dan partisipatif. Yang telah diatur dalam Peraturan Pemerintah Nomor 58 Tahun 2005 dan Permendagri Nomor 13 Tahun 2006. Dimana tahapan proses perencanaan dan penganggaran dimulai dari penyerapan aspirasi masyarakat, waktu penyusunan, sampai pada tata cara pelaksanaan perencanaan dan penganggaran sudah diatur sedetail mungkin dalam peraturan perundang-undangan.Proses perencanaan dan penganggaran di Pemerintah Kabupaten Bolaang Mongondow terdapat kendala-kendala dalam hal ini dimulai dari tahapan Musrenbang, peran Tim Anggaran Pemerintah Daerah, proses penyusunan KUA-PPAS, proses penyusunan RKA-SKPD, pembahasan anggaran dengan pihak DPRD dan penetapan anggaran APBD. Sehingga dalam penelitian ini ada upaya untuk mengatasi kendala yang terjadi dalam proses perencanaan dan penganggaran APBD di Pemerintah Kabupaten Bolaang Mongondow. Penelitian ini menggunakan pendekatan kualitatif metode studi kasus, pengumpulan data dilakukan melalui observasi dan wawancara dengan orang-orang yang terkait dalam proses perencanaan dan penganggaran yang berasal dari Aparatur Sipil Negara dan anggota DPRD Pemerintah Kabupaten Bolaang Mongondow. Penelitian ini difokuskan pada Proses Perencanaan dan Penganggaran di Pemerintah Kabupaten Bolaang Mongondow, dengan waktu penelitian kurang lebih 2 bulan. Hasil penelitian menunjukkan bahwa perencanaan dan penganggaran APBD di Pemerintah Kabupaten Bolaang Mongondow belum mematuhi peraturan perundang-undangan yang ada serta belum memaksimalkan transparansi dan keterlibatan masyarakat dalam hal ini pendekatan Bottom Up dan Top Down belum berjalan secara optimal. Sehingga harus ada upaya dalam menghadapi kendala dalam proses perencanaan dan penganggaran APBD di Pemerintah Kabupaten Bolaang Mongondow. Kata Kunci :  Perencanaan dan Penganggaran Daerah, Partisipasi Masyarakat,  Permendagri Nomor 58 Tahun 2005 Permendagri Nomor13 Tahun 2006

scholarly journals Kohesivitas Kelompok Sebagai Pemoderasi Pengaruh Partisipasi Penganggaran, Asimetri Informasi, dan Self Esteem Pada Senjangan Anggaran

2019 ◽  
pp. 55
Author(s):  
Nyoman Putra Yuna Aditya ◽  
Made Gede Wirakusuma
Keyword(s):  
Information Asymmetry ◽  
Sampling Technique ◽  
Self Esteem ◽  
Study Group ◽  
Group Cohesiveness ◽  
Budgetary Slack ◽  
Analysis Technique ◽  
Budgetary Participation ◽  
The City ◽  
Budgeting Process

Budgeting activities are carried out as a measure of manager's performance, there tends to be a discrepancy between the budgeted and realized as stated by several BPR leaders in the city of Denpasar. The purpose of this study was to obtain empirical evidence of the influence of group cohesiveness in moderating the effect of budget participation, information asymmetry, and self esteem on budgetary slack. The population in this study were all officials or employees involved in the budgeting process for 21 BPR in Denpasar City. Samples were taken using purposive sampling technique. The analysis technique used is Moderated Regression Analysis (MRA). Based on the results of the study, group cohesiveness was not able to moderate the effect of budgetary participation on budgetary slack, but group cohesiveness was statistically able to moderate the influence of information asymmetry and self esteem on budgetary slack in rural banks throughout the city of Denpasar. Keywords: Budget participation, information asymmetry, self esteem, budgetary slack.

scholarly journals Pengaruh Partisipasi Anggaran, Asimetri Informasi, Ketidakpastian Lingkungan, Budaya Organisasi, dan Komitmen Organisasi pada Senjangan Anggaran

2018 ◽  
pp. 2098
Author(s):  
Anak Agung Gde Wimba Wardhana ◽  
Gayatri Gayatri
Keyword(s):  
Organizational Culture ◽  
Organizational Commitment ◽  
Information Asymmetry ◽  
General Hospital ◽  
Environmental Uncertainty ◽  
Budgetary Slack ◽  
Negative Effect ◽  
Budgetary Participation ◽  
Positive Effect ◽  
Budgeting Process

Budgetary slack is a budgeting process that found intentional distortion by lowering budgeted revenues and increasing budgeted costs. This study aims to determine the effect of budgetary participation, information asymmetry, environmental uncertainty, organizational culture and organizational commitment on budget slack at State General Hospital Jembrana District. This research was conducted on the authorized personnel in budget preparation at RSU Negara as many as 40 people. The result of hypothesis testing shows that budget participation variable has positive effect on budget slack, information asymmetry has positive effect on budget slack, environmental uncertainty has positive effect on budget slack, organizational culture has negative effect on budget slack, and organizational commitment has negative effect on budget slack. Keywords: budgetary participation, information asymmetry, environmental uncertainty, organizational culture, organizational commitment, budgetary slack

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