Budgetary Institutions & Levels of Expenditure Outcomes in Australia & New Zealnd

Abstract

In recent years, there has been heightened concern about poor fiscal outcomes in both developed and developing countries. Governments have had to reduce aggregate public spending and deficits due to serious macroeconomic imbalances. At the same time, governments have had to focus attention on the composition of spending in deciding where to cut expenditures, i.e. allocative efficiency. Moreover, many have recognized the need to address often serious problems with technical inefficiency in the use of budgeted resources (World Bank 1992). But while policy makers and researchers have recognized these three basic problems, for the most part they have not addressed them in an integrated manner. In particular, the interrelationships among these problems have not been systematically examined. Macroeconomists have focussed the control of aggregate spending and the deficit. Experts in public administration have worked predominantly on improving technical efficiency. And, fiscal economists have concentrated on issues of allocative efficiency.