Decentralization, resource splitting and budgetary process: an empirical study

Purpose - This study examines how resource dependency affects municipal budgetary process; specifically, it investigates how politically aligned resource sharing between different levels of government along with clientelism interferes with the budgetary process of municipal organizations in developing countries. Design/methodology/approach - The paper adopts a qualitative approach to study two municipal organizations in Bangladesh. The qualitative data are collected from semi-structured interviews with key organizational members. Besides, the study also relies on various publicly available documents and the Local Government Acts to complement the interview data. Findings - The findings of the study divulge dependence on partisan aligned nonprogrammable government funds poses significant problems for municipal organizations in carrying out their budgetary process. Clientelism and informal negotiations of incumbent political leaders are found to play a vital role in such resource sharing decisions. The consequent uncertainties in getting funds have the potentials of interrupting the budgetary process at the organizational level. In some cases, budgets do not appear to be useful as a management tool for guiding organizational activities. Research limitations/implications - Like other qualitative studies, the results of these case studies are not generalizable because their interpretations are highly dependent on the context of the research sites. Practical implications - Despite the limitation of a case study research, the results of this study are useful to deepen our understanding of how uncertainty in resource sharing creates clientele behavior and interferes with the organizational budget. Such an understanding helps practitioners and policymakers devise a sound resource sharing mechanism for effective delivery of municipal services on a sustainable basis. Originality/value - This study provides insight into how precarious central government transfers and clientelism interfere with local governments' budgetary process.