Modern budgeting in the public sector: Treasury rules in a comparative context.

• Author: Kumar, Vani
• Position: Review

Barrell, Ray and Hubert, Florence, eds.

London, UK: National Institute of Economic and Social Research, 1999. (192 pp)

In this new policy environment, as changes in technology increase international competition, public-sector management has made a parallel shift towards deregulation and privatization. Modern budgeting in the public sector: Treasury rules in a comparative context compares budgeting methods used in the United Kingdom to those of five developed nations: France, Germany, the Netherlands, New Zealand, and the United States. This book presents case studies illustrating the need to reform and decentralize the public-sector system of the United Kingdom and also provides descriptive observations from other countries.

The book is divided into nine chapters. After an introductory chapter, chapters two and three examine the United Kingdom, and chapters four through eight each focus on a different country. The first chapter summarizes key public finance reforms in the United Kingdom, including increased transparency, decentralization of the government, and a move from an obligations-based to an objective-based state. An objective-based state focuses on outcomes and follows fewer constraints rather than being guided by strict rules as in an obligations-based state. The authors argue that a lack of long-term commitment and a very centralized government explain the low levels of investment in the United Kingdom. The book implies that greater long-term investment will result in providing both a voice and more control to local needs. By managing budgets at the local level, budget officials can better understand the priorities of their cities and regions and can better allocate resources. Acknowledging that greater monitoring will be necessary to achieve increased local control, the authors also note the benefits of transparency. Monitoring by Parliamentary committees, the Audit Commission, and new institutions are proposed. With the adoption of accounting principles used in private-sector businesses, greater efficiency also is predicted.

In addition, the first chapter briefly introduces the government structure and budgeting methods of France, Germany, the Netherlands, New Zealand, and the United States and presents observations addressed in later chapters. For instance, the local and state Dutch governments operate relatively independently and follow accounting principles used in the private sector. Subsequent chapters further discuss...