Academic journal article Public Administration Quarterly

Ethics in Local Government Budgeting: Is There a Gap between Theory and Practice?

Academic journal article Public Administration Quarterly

Ethics in Local Government Budgeting: Is There a Gap between Theory and Practice?

Article excerpt


The original question underscoring this research is: What role do ethics play in the budgetary decision-making in Oklahoma's local government? To answer this question, this article presents an overview of the budget process and the roles of key actors. Then it describes typical day-to-day dilemmas local budget actors face. By examining how city managers and chief financial officers respond and the sources of guidance they turn to, the authors are able to construct an operational definition of ethics-in-action. Using the information from this analysis, they then compare what occurs in practice with what is expected and is prescribed in the literature. One conclusion to be drawn from this research is that a gap exists in that the literature does not adequately consider the roles that individual value and preferences play when resolving budgetary dilemmas.


The budgetary process is often seen as a highly technocratic exercise where each step is clearly defined in terms of content, process, results, and authority. The various budgeting techniques are all designed to rationalize and objectify the grounds upon which financial resources are allocated. For cities, the budgeting process starts with the political body outlining, in broad strokes, the policy parameters for the next fiscal year. The various department heads identify their future needs on the basis of the past as well as on an assessment of future needs. These requests are forwarded to the chief financial officer (CFO) whose task it is to balance the departmental budgets. Then the city managers (CM) reconcile the bureaucracy's desire with political desires. The managerial phase of the budgetary process ends with the CFO and CM and the political process starts there.

At any phase in the budgetary process, there are many dilemmas present. Decisions are made that favor some values such as efficiency, political responsiveness, preserving the public interest over others. It is not a simple matter of determining what constitutes a right versus a wrong allocation decision, instead choices must be made between competing "right" choices.

An anecdote related by a chief financial officer illustrates this point. In a recent budget request, one of the city's departments requested new funds and additional employees to purchase a piece of equipment necessary to offering one of the city's services. After the request was approved by the city council, it was discovered that, even though the service was designed primarily to assist individual property owners and residents, in practice commercial firms requested the same service at no cost as well. Prior to this, private companies would have had to use and pay for the services of another private firm. Now they could just request that the city department handle the matter. In the budget request there was no provision for a charge to be assessed by the city for that service.

When describing this problem, the CFO lamented, "It really was a whole expansion of service and it was dumb the way they pitched it. There was a cost increase without a corresponding increase in revenue. The (the city department) were giving away service free to commercial firms ... It was just a bonehead thing that someone wanted to do for environmental reasons and ultimately got their way. This year I have been able to convince the management team to charge the commercial firms for this service. This will raise a few thousand (dollars) per year." In this example, we can conclude that dilemmas such as this one have no easy answer. Should the expansion of service decision be based on cost, political will, legal guidelines, consideration of the public interest or promotion of good economic relations with local firms? Attempts to formulate a choice between multiple choices such as these reflect what the authors term ethics-in-action in public budgeting.

This research explores the utility of ethics literature in addressing the day-to-day budget dilemmas faced by local budgeters. …

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