IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v93y2024ipbp905-918.html
   My bibliography  Save this article

Impact of budget performance management reform on local fiscal relief

Author

Listed:
  • Jiang, Shujun
  • Chi, Yan

Abstract

Budget performance management is crucial for strengthening fiscal revenue and expenditure management, enhancing the efficiency of fiscal fund utilization, and deepening the fiscal and tax system reform. Based on the quasi-natural experiment of budget performance management reform and utilizing data from 30 provinces spanning the years 2001–2021, this study employs a multi-temporal difference-in-differences model to investigate the mechanism and effects of budget performance management reform on local government fiscal pressure from both theoretical and empirical perspectives. The results reveal that budget performance management reform has a significant effect on relieving local fiscal pressure. Parallel trends and series of robustness tests support the results. Budget performance management reform impacts fiscal pressure through fiscal expenditure efficiency, government expenditure scale, and fiscal transparency. The heterogeneity analysis results indicate that the impact advancing budget performance management reform on fiscal pressure is affected by regional environment, fiscal decentralization areas, and municipal debt areas. The research results provide direct evidence of the effect of budget performance management on fiscal pressure, providing policy insights for local governments to alleviate the contradiction between fiscal revenue and expenditure.

Suggested Citation

  • Jiang, Shujun & Chi, Yan, 2024. "Impact of budget performance management reform on local fiscal relief," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 905-918.
    • Handle: RePEc:eee:reveco:v:93:y:2024:i:pb:p:905-918
    DOI: 10.1016/j.iref.2024.05.036
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056024003356
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2024.05.036?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jeffrey B. Liebman & Neale Mahoney, 2017. "Do Expiring Budgets Lead to Wasteful Year-End Spending? Evidence from Federal Procurement," American Economic Review, American Economic Association, vol. 107(11), pages 3510-3549, November.
    2. Ejiogu, Amanze & Ejiogu, Chibuzo & Ambituuni, Ambisisi, 2019. "The dark side of transparency: Does the Nigeria extractive industries transparency initiative help or hinder accountability and corruption control?," The British Accounting Review, Elsevier, vol. 51(5).
    3. Dongsung Kong, 2005. "Performance-Based Budgeting: The U.S. Experience," Public Organization Review, Springer, vol. 5(2), pages 91-107, June.
    4. Sachin S. Kamble & Angappa Gunasekaran, 2020. "Big data-driven supply chain performance measurement system: a review and framework for implementation," International Journal of Production Research, Taylor & Francis Journals, vol. 58(1), pages 65-86, January.
    5. Ren, Meixu & Ke, Konglin & Yu, Xin & Zhao, Jinxuan, 2023. "Local governments' economic growth target pressure and bank loan loss provision: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 87(C), pages 1-14.
    6. Xu Zhang & Tianchu Feng & Chengjun Wang & Chaozhu Li, 2023. "Local Fiscal Pressure and Public Health: Evidence from China," IJERPH, MDPI, vol. 20(6), pages 1-17, March.
    7. Croce, M. & Nguyen, Thien T. & Raymond, S., 2021. "Persistent government debt and aggregate risk distribution," Journal of Financial Economics, Elsevier, vol. 140(2), pages 347-367.
    8. Lars-Erik Borge & Torberg Falch & Per Tovmo, 2008. "Public sector efficiency: the roles of political and budgetary institutions, fiscal capacity, and democratic participation," Public Choice, Springer, vol. 136(3), pages 475-495, September.
    9. Arnold, Markus & Artz, Martin, 2019. "The use of a single budget or separate budgets for planning and performance evaluation," Accounting, Organizations and Society, Elsevier, vol. 73(C), pages 50-67.
    10. Imane Hijal-Moghrabi, 2019. "Why Is it So Hard to Rationalize the Budgetary Process? A Behavioral Analysis of Performance-Based Budgeting," Public Organization Review, Springer, vol. 19(3), pages 387-406, September.
    11. Ilse Schoeman & James Chakwizira, 2023. "Advancing a Performance Management Tool for Service Delivery in Local Government," Administrative Sciences, MDPI, vol. 13(2), pages 1-29, January.
    12. Mads Leth Felsager Jakobsen & Thomas Pallesen, 2017. "Performance Budgeting in Practice: the Case of Danish Hospital Management," Public Organization Review, Springer, vol. 17(2), pages 255-273, June.
    13. Xu, Si & Zhang, You & Chen, Lan & Leong, Lin Woon & Muda, Iskandar & Ali, Anis, 2023. "How Fintech and effective governance derive the greener energy transition: Evidence from panel-corrected standard errors approach," Energy Economics, Elsevier, vol. 125(C).
    14. Mauro, Sara Giovanna & Cinquini, Lino & Pianezzi, Daniela, 2021. "New Public Management between reality and illusion: Analysing the validity of performance-based budgeting," The British Accounting Review, Elsevier, vol. 53(6).
    15. Shuo Sun & Rhys Andrews, 2020. "The determinants of fiscal transparency in Chinese city-level governments," Local Government Studies, Taylor & Francis Journals, vol. 46(1), pages 44-67, January.
    16. Zhang, Yonggang & Dilanchiev, Azer, 2022. "Economic recovery, industrial structure and natural resource utilization efficiency in China: Effect on green economic recovery," Resources Policy, Elsevier, vol. 79(C).
    17. Zhang, Yongxing & Zhao, Yongjie & Sun, Wei & Li, Jiaxuan, 2021. "Ocean wave energy converters: Technical principle, device realization, and performance evaluation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 141(C).
    18. Montes, Gabriel Caldas & Bastos, Júlio Cesar Albuquerque & de Oliveira, Ana Jordânia, 2019. "Fiscal transparency, government effectiveness and government spending efficiency: Some international evidence based on panel data approach," Economic Modelling, Elsevier, vol. 79(C), pages 211-225.
    19. Cheng, Yiran & Zhou, Xiaorui & Li, Yongjian, 2023. "The effect of digital transformation on real economy enterprises’ total factor productivity," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 488-501.
    20. Trevor Shaw, 2016. "Performance budgeting practices and procedures," OECD Journal on Budgeting, OECD Publishing, vol. 15(3), pages 65-136.
    21. Sung-Jin Park & Sungkyu Jang, 2021. "Asymmetric information and excess budget: the influence of performance-based budgeting on budgetary slack in US states," International Review of Public Administration, Taylor & Francis Journals, vol. 26(4), pages 353-372, October.
    22. Vicente Pina & Patricia Bachiller & Lara Ripoll, 2020. "Testing the Reliability of Financial Sustainability. The Case of Spanish Local Governments," Sustainability, MDPI, vol. 12(17), pages 1-22, August.
    23. Simin Zhang & Zhikai Wang, 2023. "Effects of Vertical Fiscal Imbalance on Fiscal Health Expenditure Efficiency—Evidence from China," IJERPH, MDPI, vol. 20(3), pages 1-22, January.
    24. Ringa Raudla, 2022. "Politicians’ use of performance information in the budget process," Public Money & Management, Taylor & Francis Journals, vol. 42(3), pages 144-151, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Florian Dorn, 2021. "Elections and Government Efficiency," ifo Working Paper Series 363, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    2. Hoyong Jung, 2022. "Online Open Budget: The Effects of Budget Transparency on Budget Efficiency," Public Finance Review, , vol. 50(1), pages 91-119, January.
    3. Yao, Ganzhou & Luo, Zirong & Lu, Zhongyue & Wang, Mangkuan & Shang, Jianzhong & Guerrerob, Josep M., 2023. "Unlocking the potential of wave energy conversion: A comprehensive evaluation of advanced maximum power point tracking techniques and hybrid strategies for sustainable energy harvesting," Renewable and Sustainable Energy Reviews, Elsevier, vol. 185(C).
    4. Qiuxia Yang, 2020. "Fiscal Transparency and Public Service Quality Association: Evidence from 12 Coastal Provinces and Cities of China," JRFM, MDPI, vol. 14(1), pages 1-14, December.
    5. Freddy Semuel Kawatu & Cecilia Lelly Kewo, 2019. "The Factors Influencing Managerial Performance and their Effect on Financial Accountability," International Journal of Economics and Financial Issues, Econjournals, vol. 9(5), pages 135-139.
    6. Ma, Hongchao & Zhang, Haonan, 2024. "Can green energy expansion develop the mineral resource market in East Asia?," Resources Policy, Elsevier, vol. 90(C).
    7. Guo, Jiaqi & Wang, Qiang & Li, Rongrong, 2024. "Can official development assistance promote renewable energy in sub-Saharan Africa countries? A matter of institutional transparency of recipient countries," Energy Policy, Elsevier, vol. 186(C).
    8. Xing Zhao & Yifan Guo & Zhen Liu & Anteng Xiu, 2023. "Boosting green recovery: the impact of green fiscal policy on green total factor productivity," Economic Change and Restructuring, Springer, vol. 56(4), pages 2601-2619, August.
    9. Zhenjie Guo & Norita. E. Manly, 2024. "Unlocking the Economic Potential of Sports Lottery in China: A Knowledge-Based Economy Perspective Enhanced by Artificial Intelligence," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 12919-12945, September.
    10. Matilde Cappelletti & Leonardo M. Giuffrida, 2024. "Targeted Bidders in Government Tenders," CESifo Working Paper Series 11142, CESifo.
    11. Wang, Mangkuan & Shang, Jianzhong & Luo, Zirong & Lu, Zhongyue & Yao, Ganzhou, 2023. "Theoretical and numerical studies on improving absorption power of multi-body wave energy convert device with nonlinear bistable structure," Energy, Elsevier, vol. 282(C).
    12. Govindan, Kannan & Kannan, Devika & Jørgensen, Thomas Ballegård & Nielsen, Tim Straarup, 2022. "Supply Chain 4.0 performance measurement: A systematic literature review, framework development, and empirical evidence," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    13. Christl, Michael & Köppl-Turyna, Monika & Kucsera, Dénes, 2018. "Public sector efficiency in Europe: Long-run trends, recent developments and determinants," Working Papers 14, Agenda Austria.
    14. Suriyan Jomthanachai & Wai Peng Wong & Khai Wah Khaw, 2024. "An Application of Machine Learning to Logistics Performance Prediction: An Economics Attribute-Based of Collective Instance," Computational Economics, Springer;Society for Computational Economics, vol. 63(2), pages 741-792, February.
    15. Fu, Shuke & Ge, Yingchen & Hao, Yu & Peng, Jiachao & Tian, Jiali, 2024. "Energy supply chain efficiency in the digital era: Evidence from China's listed companies," Energy Economics, Elsevier, vol. 134(C).
    16. Chenglong Guo & Wanan Sheng & Dakshina G. De Silva & George Aggidis, 2023. "A Review of the Levelized Cost of Wave Energy Based on a Techno-Economic Model," Energies, MDPI, vol. 16(5), pages 1-30, February.
    17. Zhao, Xing & Guo, Yifan & Feng, Tianchu, 2023. "Towards green recovery: Natural resources utilization efficiency under the impact of environmental information disclosure," Resources Policy, Elsevier, vol. 83(C).
    18. Hu, Nan & Zheng, Bing, 2023. "Natural resources, education, and green economic development," Resources Policy, Elsevier, vol. 86(PB).
    19. Julia Eichholz & Nicole Hoffmann & Anja Schwering, 2024. "The role of risk management orientation and the planning function of budgeting in enhancing organizational resilience and its effect on competitive advantages during times of crises," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 35(1), pages 17-58, March.
    20. Arnt Hopland, 2014. "Voter information and electoral outcomes: the Norwegian list of shame," Public Choice, Springer, vol. 161(1), pages 233-255, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:93:y:2024:i:pb:p:905-918. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.