The Financial State of Local Communities: A Comparative Research of Ukraine and the Czech Republic

The article describes the specific details of local communities functioning in Ukraine and the Czech Republic. It has been examined that Ukraine and the Czech Republic have similar, but not identical systems of local governance. We conducted a comparative analysis of the financial state of local communities in both countries by five indicators. Indicator 1 (total income per capita) characterises the community’s financial potential and reveals that Ukraine’s local communities have fewer financial resources to use. Indicator 2 (total expenditures per capita) describes the ability to provide residents with the resources generated in their community and Czech communities have a higher value of this indicator. Indicator 3 (share of the administrative expenditures) shows the effectiveness of money spent, and local communities in both Ukraine and the Czech Republic spend particularly the same part of their total expenditures on administrative needs. Indicator 4 (capital expenditures per capita) demonstrate how the money generated is spent on urgent capital investments and Ukraine’s communities have much lower capital expenditures per capita than Czech ones. Indicator 5 (the share of capital expenditures in total expenditures) reflects how local communities perceive the importance of investments in capital projects and Ukraine’s communities spend fewer financial resources for capital needs than Czech ones.

Political Budget Cycles In Municipalities: Evidence From Indonesia

This study aims to examine the presence of politically induced and electorally motivated economic policy in local government budget. Further, the study examine the presence of pre-electoral manipulation through the behavior of budget balance, total expenditures, investment expenditures, and other administrative expenditures including donations, social assistance, and financial assistance expenditure during election year. Samples of the study consists of 451 district municipalities in Indonesia which held direct local elections over the period 2010-2014. The result of the study shows an opportunistic PBC pattern in the budget balance, total expenditures, donation expenditures, and financial assistance expenditures. The result suggest that there is an increase in local budget deficit in election years.Total expenditures also seem to increase duringthe election year, along with donation and financial assistance expenditures. This result supports the notion that elections have a positive effect on the government expenditures through the increase of municipal expenditures, especially expenditures thatare highly visible to electorate.

Compensation Committees' Treatment of Earnings Components in CEOs' Terminal Years

ABSTRACT Compensation committees face special difficulties when setting pay in the last years of a CEO's tenure. For example, incentives to manipulate earnings for the purpose of enhancing earnings-based compensation are greater in CEOs' terminal years. We predict that compensation committees are aware of these incentives and adjust the relative weights placed on earnings components in the cash compensation function to mitigate the problem. Consistent with our prediction, we find that in CEOs' terminal years, positive changes in discretionary accruals receive significantly less weight than other income components in determining cash compensation. This provides new evidence that not all gains flow through to compensation. We also find that in non-terminal years, managers' compensation is partially shielded from the negative effects of selling, general, and administrative expenditures (SG&A), but this effect reverses in the terminal period, consistent with the compensation committee discouraging investment in legacy assets by outgoing CEOs. Overall, our findings suggest that compensation committees treat components of earnings differently when setting pay in the terminal period. JEL Classifications: M41; J33.

Where Has the Money Gone? An Analysis of School District Spending in New York

An important, but infrequently discussed, aspect of whether “money matters” concerns how school district expenditures have been allocated. New York state school districts spent $12 billion more on public K–12 education in 1991–1992 than in 1979–1980. School districts increased real expenditures per pupil by 46% over the 1980–92 period. A surprisingly large portion of the additional spending has gone to students designated as disabled, whereas the share of the new money to nondisabled students has substantially decreased. Other findings address the growth in administrative expenditures, district responses to changing enrollments, and increased compensation for teachers.