Gloria A. Grizzle

Political and organizational influences on the accuracy of forecasting state government revenues

Abstract This paper tests a general theory of the factors influencing the accuracy of state government revenue forecasts. Besides the more familiar hypotheses on forecasting techniques and randomness of dependent variable time series, our theory includes hypotheses on the political environment and organizational procedures used in forecasting. The primary data are from three surveys of state governments and include percentage forecasts errors for total and sales tax revenues. The analysis uses two measures of forecast accuracy, the mean and median absolute percentage errors. These are estimated in a linear model that uses ordinary least squares and least absolute value regressions. The results confirm most parts of the theoretical model, subject to the caveats of field data. Forecast accuracy increases when there are independent forecasts from competing agencies. It increases even more when formal procedures exist to combine competing forecasts. It decreases when outside expert advisors are used and when there is a dominant political party or ideology. Finally, it increases when simple regression models and judgmental methods are used as opposed to univariate time series methods or econometric models.

Implementing Performance-Based Program Budgeting: A System-Dynamics Perspective

The article proposes a model for evaluating budget reforms that combines insights from budgeting, policy implementation, and system-dynamics literatures. System-dynamics modeling combines both quantitative and qualitative research techniques to provide a new framework for applied research; its use is illustrated using performance budgeting as an example. Applied to the implementation of Floridas performance-based program budget, the model identifies actions in the short run that will increase the reforms likelihood of success: providing clear communications; facilitative budget and accounting routines; reliable performance information. The model also identifies critical legislative behaviors that influence executive implementation: how the legislature in the long-run uses performance information to inform resource allocation and how it applies incentives or sanctions to programs that achieve or fail to achieve their performance standards. The legislature has the opportunity to use program reviews prepared by legislative staff to invigorate the executive branchs resolve to continue implementing the reform.

Does Budget Format Really Govern the Actions of Budgetmakers

For well over half a century students of budgeting have assumed that the format into which a budget is cast influences budget decisions. Yet as late as 1980 Haves stated that “there is little or no material on the factors affecting outcomes in the budget process and, indeed, little basis for any judgment as to whether the character of the process has any significant impact on the results obtained.... The fundamental need is for analyses of exerience.” Since that time, several studies have analyzed budget outcomes quantitatively and related them to the budget formats used. This article provides a framework for integrating the results of these studies with earlier case descriptions of budget reforms. It then identifies an area that still needs exploring and presents the results of one study that addresses this need.

A Manager's Guide to the Meaning and Uses of Performance Measurement

ment means obtaining information useful to someone in assessing how well an organization or program is working. A difficult but essential task in developing a performance measurement system is deciding what ought to be measured. Several questions need to be answered before deciding what information should be used to measure performance. These questions include: 1. What is the entity (e.g. program, activity, organizational unit) whose performance is to be measured? 2. Who will use the performance information? 3. For what purposes will performance information be used? Once the entity whose performance will be measured and the purposes and the users of performance measurement have been established, the manager charged with the task of developing a performance measurement system is ready to turn to the growing literature on performance measurement for help in deciding what to measure. The manager delving into this literature may become more confused than enlightened as he moves from one reading to another. This paper seeks to alleviate that confusion by reviemng the various aspects of perfor-

Making government efficient: How much waste can be cut from public programs?

The public administrator should be concerned with waste due to implementing programs inefficiently, not with waste due to implementing the wrong programs. Based upon a synthesis of efficiency studies using frontier analysis, the mean inefficiency of public programs is estimated at five percent. Efficiency gains beyond this level ordinarily require advances in technology, or changes in what constitutes best practice. While greater efficiency is a desirable goal, efficiency gains achieved through forced spending reductions need to be weighed against possible concomitant reductions in a programs quality of service, benefit to society, and cost-effectiveness. An efficiency analysis of an emergency medical service program illustrates the sort of information required to identify improvements in efficiency within this broader context.

Illicit Drug Availability

The effect of a local drug enforcement program on the availability of illicit drugs is evaluated. Using a variety of data-collection techniques, change in drug availability is measured and linked to the direct outputs of the enforcement program. Factors other than the program that might have caused changes in availability are considered.

Evaluating Multidimensional Performance: A Social Judgment Theory Approach.

Social judgment theory (SJT) is a method for eliciting opinions about the relative importance of multiple objectives or attributes. When SJT is used to elicit the opinions of individuals who form a group, one must consider by what method these individual opinions can be aggregated to represent the groups opinion. This article suggests a functional form for analyzing opinions elicited by SJT and a method for combining individual opinions. It then applies the proposed model to the problem of establishing relative weights for six performance dimensions for a public sector agency. Analysis of data for individuals in two groups indicates that both interaction and quadratic terms are important in describing how individuals evaluate agency performance. Further, individ ual methods of agency evaluation are so diverse that a random coefficient model of valuation for the group as a whole is more appropriate than the traditional fixed coefficient model.

Plural Policy-Making Bodies Decision Strategies

Plural decision-making bodies often face constraints that make impractical the pure rational decision model. These bodies can develop their own practical decision strategies that adapt the pure rational model to fit their specific decision situations. Choosing an appropriate strategy requires considering the stages in the policy process at which strategy options exist, the nature of the policy issue, the nature of the policy-making body, and the environment within which it operates. Two such strategies are suggested.