Public Budgeting





Asa field of public administration, public budgeting is determined byits functions, formation and approaches. Over the years, publicbudgeting has instigated major debates, with different scholarspostulating different views on what exactly public budgeting entails.Some of the major proponents of public budgeting include FrederickCleveland, Allen Schick and Richard Musgrave. According to Steiss(2010), public budgeting should be viewed from political, economic,accountant and public manager’s perspective. From the politicalperspective, a politician views public budgeting as a form ofpolitical process that is intended to perpetuate politicalideologies. To the economist, public budgeting entails the allocationof resources based on the opportunity cost. The accountant point ofview focuses on the essence of accountability in the process ofbudgeting. According to the accountant, budgeting should entail afair, transparent and accountable process. As a tool in publicbudgeting, the public manager’s perspective outlines that beforethe implementation of public budgeting process, public policiesshould be first formulated to govern the process.


Thecontroversial nature of public budgeting has elicited major debatesamong legislators on how money should be distributed in both nationaland federal governments. Many authors too have posited theirassertions on the topic of public budgeting. This paper seeks tocritically examine Oates’ assertions in his articles on fiscalfederalism. In his articles, Oates postulates that fiscal federalismis vertical system of public finance where governments provide thepublic with goods and services at different levels. Oates furtherasserts that fiscal federalism is a complex form of public budgetingwhich differs in both decentralized and centralized governments.Oates offers a suitable solution to resource allocation by positingthat decentralized governments are better than centralizedgovernments in enhancing economic stabilization and the equitabledistribution of resources. According to Oates, the decentralizedgovernments can easily maximize fiscal tools such asintergovernmental grants, taxes and the jurisdictions of bordertaxes. Oates further posits that decentralized government systems caneasily stimulate spillover effects and manage resource distributionmore efficiently.

Onthe other hand Oates explores the roles of centralized in fiscalfederalism by postulating that the centralized government is moreeffective in promoting macroeconomic stabilization. The centralgovernment can only achieve macroeconomic stabilization due to thefact that it can easily overcome the problems and issues of citizenmobility. However, the central government cannot achieve economicefficiencies. It is not be in a position to closely monitor fiscalissues such as border taxes, operations of nongovernmentalorganizations as well as other tax nobilities.

However,Oates concludes that both the decentralized and the centralizedgovernment systems are key to ensuring that public budgeting is wellcarried out as stipulated in the constitution. Additionally,stakeholders in the government are obliged to conduct publicbudgeting in a fair and accountable manner.


Inconclusion, it is evident that public budgeting has failed in manynations across the globe, a factor that can be attributed to greed,corruption, poor governance and lack of qualified personnel. In manycountries especially the developing states, corruption has become asocial norm. In such states, legislators usually allocate fundsinappropriately while the citizens do not have power o control theirdecisions. Poor public budgeting is therefore a factor that hasimmensely contributed to poverty and retrogression in the manystates.


Oates,W. (1999). Anessay on fiscal federalism

Steiss,A. (2010). Publicbudgeting and management.Lexington, Mass.: Lexington Books.