Ethical Norms in Public Budgeting: Evolution or Devolution?

Article excerpt

ABSTRACT. Public budgeting has always been identified with the norms of technical expertise, neutral competence and professionalism. Although the field of public budgeting remains wedded to these norms, the field has evolved over the course of the 20^sup th^ century. This paper discusses the role of "budgeteers" and their evolution from accountants to budget processors. The budget processor of the year 2003 has the skills to craft efficient and responsive budgets, but is constrained by the limitations of surplus or deficit scenarios, an unpredictable economy, budget politics and tax avoidance syndrome. This article posits five ethical norms that can be used to explain how public budgeting evolved in the 20^sup th^ Century and where it may he headed in the next.

INTRODUCTION

Public budgeting as a field, inclusive of the budgeteers who produce public budgets, has always been strongly identified with the norms of specialization, technical expertise, neutral competence and professionalism. Ever since the advent of strong executive budget systems dating from the 1920s, budgeting at the federal and state levels has been viewed as a scientific/rational process of sorts. Budgeteers add the numbers, balance the books, efficiently allocate public resources and generally keep an eye on the public's purse.

Although the field of public budgeting remains wedded to these norms, the field certainly has evolved over the course of the 20^sup th^ century well beyond these narrow parameters. Indeed, public budgeting and budget staffs have become de facto and sometimes de jure policymakers.

Budgeteers are routinely involved in substantive policy negotiations, play a big part in the political wrangling over limited public funds and are often involved in implementation that determines the delivery of public services. The evolving norms evoke images of policymaker, manager and even politician. These labels are often shunned by budget practitioners, but nonetheless constitute the job of the modern day budgeteer.

As the field and profession enter the 21^sup st^ century, it is important to recognize an evolution of roles from the emerging accountant, to the scientific neutral competent, to policy maker, then defacto politician, and finally "budget processor." The budget processor of the year 2003 has the requisite financial and political skills to craft both efficient and responsive budgets, but is constrained by the limitations of surplus or deficit scenarios, an unpredictable economy, divided government syndrome or, at minimum, divisive budget politics, cutback management, performance mania, and tax avoidance syndrome. Hence from a normative perspective, evolution has become devolution and the budgeteer of the 21^sup st^ century has come full circle back to a more narrow and mechanistic role in the field of public budgeting.

Accordingly, this paper looks back in order to look forward. The lenses to gaze in both directions are the ethical norms associated with specific periods in the history of public budgeting. First and foremost, this paper is about ethics in public budgeting, but it also offers a retrospective on the entire field. The ethical norm for the budgeteer circa 1921 to 1960 can be described as a preoccupation with honesty in the presentation of financial information and integrity in the accountability of public resources. Although there are certainly exceptions, this brand of ethics can be characterized as deontological - where principle mattered. The ethics was in the process and mechanisms of budgeting, albeit a cost-centered, accounting-type function.

From 1961 through 1973, budgeting embraced a rational approach to resource allocation. The use of sophisticated budgetary systems and forecasting models solidified the role of the budgeteers as master technicians. The ethical implications extended well beyond previous norms. For example, neutral competence took a back seat to strategic presentation of numbers supporting one position or another, application of flexible modeling assumptions which could vary the level of available revenues, or specification of what project costs and benefits were to be counted, and how much should they be weighted. …