For a Better Budget, Postpone Local Elections

Holding local elections in autumn, instead of springtime, and devoting one or two mid-year local council sessions to budget revisions would contribute to a more efficient local governments' rebudgeting process in Italy, according to Ileana Steccolini (Department of Policy Analysis and Public Management), Eugenio Anessi-Pessina (Università Cattolica di Roma and Department of Policy Analysis and Public Management) and Mariafrancesca Sicilia (Università di Bergamo and Department of Policy Analysis and Public Management) in Budgeting and Rebudgeting in Local Governments: Siamese Twins? (forthcoming in Public Administration Review).

Italian local governments' rebudgeting is as sizeable as opaque, being the sum of several, small revisions – and grouping them into one or two sessions would increase their visibility. Over the period 2003-2007 the 657 municipalities with a population over 15,000 in the panel used by the authors adjusted current spending upwards, on average, by 4.4%, and capital spending by 16.4%. Adjustments are larger in the last year of the term, because politicians seek reelection increasing public spending, and in the first year because they act under the constraints of a budget prepared by the former administration; elections held later in the year would thus limit the period of mismatch between budget allocations and political priorities.

In the article Steccolini and her colleagues search for the drivers of budget revisions considering budgeting and rebudgeting as a single, year-long process and focusing then on testing the explanatory potential of those variables that have been identified as relevant by the literature on budgeting.

They find that rebudgeting is a way for the municipalities to fill a gap in their initial programming or to adapt their resource allocation to changing political priorities. Thus, when the initial budget is only marginally different from the previous year's (a widespread way to do), revisions will be more frequent.

Furthermore, rebudgeting is a way for politicians to pursue opportunistic goals (like reelection) and for powerful Financial Comptroller Offices to enforce fiscal conservatism in the formulation of the initial budget (if revisions were not possible, the initial budget should be looser).

Finally, rebudgeting is a way for municipalities in dire financial conditions and disadvantaged socio-economic environments to meet changes in the constraints they face, while wealthier municipalities have more leeway in the formulation of the initial budget and less need of later revisions.