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Federal budget process reform: An economics perspective, with imperfect, “Human” decision‐makers

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  • Marvin Phaup

Abstract

This paper develops and supports the thesis that the performance of the federal budget process would be improved by the criteria of efficiency and stability by the addition of an explicit budget constraint with ex ante budgeting for fiscal shocks. Adding a constraint would nudge policymakers to choose more efficient policies, while reducing the risk of a fiscal crisis. Anticipating and provisioning for shocks in advance of occurrence would avoid undermining the constraint ex post. Both changes could be effected by a behaviorally‐informed version of a proposal originally advanced and endorsed by economists in the 1950s.

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  • Marvin Phaup, 2022. "Federal budget process reform: An economics perspective, with imperfect, “Human” decision‐makers," Public Budgeting & Finance, Wiley Blackwell, vol. 42(3), pages 114-130, September.
    • Handle: RePEc:bla:pbudge:v:42:y:2022:i:3:p:114-130
    DOI: 10.1111/pbaf.12327
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