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Bargaining Strength in Budgetary Processes

Author

Listed:
  • Terje P. Hagen
  • Rune J. Sørensen
  • Øyvind Norli

Abstract

Studies of government budget-making recurrently describe it as a bargaining process between `guardians' and `advocates'. Yet this observation has not been implemented in formal modelling of budgetary processes. This paper employs a Nash model to analyse local government budgeting. The model is implemented by assuming two different sets of assumptions about the conflict points. The paper evaluates the explanatory power of the two interpretations by estimating the models on a cross-sectional time-series dataset from Norwegian counties. Finally, we examine the impact of institutional procedures on bargaining power. The paper defines the bargaining parameters of an asymmetrical Nash model as endogenous variables, and estimates the impact of election years, long-term budgeting and the managerial style of budget-making. It is found that budgetary procedures and election cycles affect the bargaining strength of the negotiators.

Suggested Citation

  • Terje P. Hagen & Rune J. Sørensen & Øyvind Norli, 1996. "Bargaining Strength in Budgetary Processes," Journal of Theoretical Politics, , vol. 8(1), pages 41-63, January.
    • Handle: RePEc:sae:jothpo:v:8:y:1996:i:1:p:41-63
    DOI: 10.1177/0951692896008001003
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    References listed on IDEAS

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    8. A. J. Auerbach & M. Feldstein (ed.), 1987. "Handbook of Public Economics," Handbook of Public Economics, Elsevier, edition 1, volume 2, number 2.
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    Cited by:

    1. Per Tovmo, 2007. "Budgetary Procedures and Deficits in Norwegian Local Governments," Economics of Governance, Springer, vol. 8(1), pages 37-49, January.
    2. Schmidt, Torsten, 2001. "Finanzreformen in der Bundesrepublik Deutschland: Analyse der Veränderungen der Finanzverfassung von 1949 bis 1989," RWI Schriften, RWI - Leibniz-Institut für Wirtschaftsforschung, volume 67, number 67.
    3. Søren Serritzlew, 2005. "The Perverse Effect of Spending Caps," Journal of Theoretical Politics, , vol. 17(1), pages 75-105, January.

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