Determinants of Budgeted Information Technology Expenditures

Information technology expenditures vary across firms and across industries; however, very little empirical research has investigated the factors influencing the level of these expenditures. The object of this paper is to present theory and evidence of the determinants of corporate IT budgets. Using InformationWeek data, we find that budgeted IT expenditures are significantly influenced by the strategic role that IT plays in an industry, and by the level of complexity arising from industry and firm-level factors. The level of concentration within the industry has a significant impact on IT budgets. A number of firm-level factors also affect IT budgets, including prior IT investments, resource availability, business volatility, and the level of diversification. This suggests that managers should adjust for these firm and industry-level factors when comparing their IT spending to selected benchmark firms

Political fragmentation and projected tax revenues: evidence from Flemish municipalities

The level of revenues pocketed by a government during the fiscal year often deviates from that projected by this government in its budget. Despite a flourishing literature on, for example, the technical or procedural determinants of such forecast errors, little is yet known about how political stratagems may affect forecast errors. In the present paper, we analyse whether differences in the level of government fragmentation are useful in explaining local government tax revenue forecast errors – controlling for various other factors. Using data on 242 Flemish municipalities for the period 1992-2002, we find that two-party governments are more optimistic than single-party governments. In contrast to our initial expectations, governments with at least three parties are significantly more careful (or less optimistic) in their revenue projections than single- or twoparty governments. -- Die Einnahmen einer Regierung während eines Steuerjahres weichen oft von den vorherigen Budgetkalkulationen dieser Regierung ab. Diese Prognosefehler sind zwar schon bezüglich ihres technischen und institutionellen Kontextes empirisch erforscht worden, allerdings fehlt es bisher an Kenntnissen, was den Effekt politischer Variablen betrifft. In der vorliegenden Veröffentlichung wird untersucht, ob die politische Fragmentierung der lokalen Regierungen einen wichtigen Faktor zur Erklärung von Prognosefehlern darstellt, dabei immer kontrollierend für verschiedene andere Elemente. Unsere empirische Analyse von 242 der 308 flämischen Gemeinden im Zeitraum 1992-2002 zeigt erstens, dass Regierungen mit zwei Parteien eher optimistisch ihr Budget planen. Sie setzen mehr Einnahmen voraus, als sie während des Steuerjahres bekommen. Im Gegensatz zu unserer Hypothese zeigt die Analyse aber auch, dass ab 3 Parteien in einer Regierung die Überschätzung der Einnahmen geringer wird.Revenue projections,forecast accuracy,local taxation,Flemish municipalities,government fragmentation

What affects the Russian regional governments'propensity to subsidize?

Subsidies funded by Russia's regional governments represented about 5.2 percent of GDP in 1995, almost triple the 2 percent of GDP in subsidies funded by the federal government. Regional policies vary greatly, influenced more by local factors than by the federal government. To find out what affects the regional governments'propensity to subsidize, the authors examined available data for 1992-95, asking: How great is the variation across regions in the incidence of subsidies, and what are recent trends in such variation? What are the relative influences of supply and demand factors in shaping the current levels of subsidy? How do federal budget transfers affect regionally funded subsidies to local enterprises? To what extent are federal transfers distortionary, encouraging subsidies and postphoning the liberalization of local markets? Their findings: 1) Regional wealth and federal budget transfers to regional governments are two of the most important determinants of regional propensity to subsidize. 2) Even when regional budgetary wealth is controlled for, depressed regions (those affected most by industrial decline and unemployment) tend to spend less on subsidies than regions with more favorable economies. 3) Federal budget transfers are quite distortionary, that is, they encourage regional governments to continue subsidy policies and postpone structural reforms. In fact, federal transfers tend to be concerned in regions with the most distortionary policies. 4) Housing receives the lion's share of total regional subsidies, and there are greater disparities in housing subsidies than in agricultural subsidies. 5) Housing and transportation subsidies are strongly counter-equalizing: Households in wealthier regions receive more in housing subsidies and rural populations have less access to those subsidies, so up to 30 percent of regional subsidies are questionable in terms of equity. 6) Federal transfers have less effect on regional subsidies in agriculture, which are influenced more by the region's own tax base and its share of rural population or by such factors as the political influence of local interest groups. 7) To accelerate structural reforms, the federal government might consider reducing the number of recipients of federal budget transfers and changing the rules of allocation of the transfers, in particular by introducing conditional transfers linked to increases in cost recovery.Economic Theory&Research,Banks&Banking Reform,Municipal Financial Management,Public Sector Economics&Finance,Environmental Economics&Policies,Banks&Banking Reform,Municipal Financial Management,Public Sector Economics&Finance,Environmental Economics&Policies,Economic Theory&Research

How the Chinese system of charges and subsidies affects pollution control efforts by China's top industrial polluters

There have been extensive theoretical studies of firms'responses to environmental regulations ad enforcement but few empirical analyses of firms'expenditures on pollution abatement in response to different regulations and enforcement strategies. The authors empirically analyze the pollution abatement efforts of Chinese industrial firms under a system combining pollution charges and abatement subsidies. Using data on China's top industrial polluters and on regional development in China, they find that the combination of charges and subsidies used in china has provided effective incentives for the most heavily polluting industrial firms to abate pollution. Chinese industries operate under a unique pollution control system, a market-based instrument combining emissions charges and abatement subsidies. This combination of charges and subsidies has given firms incentive to invest in wastewater treatment facilities. The pollution levy, although low, has significantly improved investments in abatement. The authors found that the more pollution a firm generates, the more likely it is to invest in pollution abatement. This study was only of top polluters, which are closely monitored by environmental agencies, so the results may not be valid for other sources of industrial pollution.Sanitation and Sewerage,Environmental Economics&Policies,Pollution Management&Control,Public Health Promotion,Water and Industry,Water and Industry,Environmental Economics&Policies,Pollution Management&Control,TF030632-DANISH CTF - FY05 (DAC PART COUNTRIES GNP PER CAPITA BELOW USD 2,500/AL,Sanitation and Sewerage

Planning and Financing Sustainable Education Systems in Sub-Saharan Africa

Teaching/Communication/Extension/Profession,

The cost of poverty alleviation transfer programs

"A common criticism of antipoverty programs is that the high share of administrative (nontransfer) costs substantially reduces their effectiveness in alleviating poverty. Yet there is surprisingly little hard empirical evidence on such programs' costs. A recent international review of targeted poverty alleviation programs in less developed countries found cost information which was rarely comparable between studies for fewer than one-third of the programs examined. Improved information and a better understanding of the costs of such programs are crucial for effective policymaking. This study proposes and implements a methodology for a comparative analysis of the level and structure of costs of three similar poverty alleviation programs in Latin America, in order to assess their cost-efficiency. The findings underscore that any credible assessment of cost-efficiency requires a detailed analysis of program cost structures that goes well beyond simply providing aggregate cost information." Authors' AbstractPoverty alleviation ,Human capital ,cost benefit analysis ,

Fiscal risks and the quality of fiscal adjustment in Hungary

The government of Hungary has contained the main fiscal risks of the transition to a market economy. It has paid off and resolved most problems in the banking and enterprise sectors. Since 1995 it has implemented fiscal adjustment with the objective of long-term fiscal stability rather than an immediate deficit target. The main result has been pension reform, which has raised temporary deficits but reduced the long-term public liability. Only the health sector awaits the reform needed for long-term fiscal stability. Levels of government spending, budget deficits, and public service remain high, but the government has made great progress toward rationalizing public spending and improving the management of budget and off-budget fiscal risks. In the transition, the government has taken on new fiscal risks--mainly state guarantees and growing programs of credit and guarantee agencies (operating on behalf of the government) organized after privatization to support, first, industries and, later, exporters. The government has dealt with these new programs of contingent government support prudently and transparently, with reasonable ceilings on (and reporting of) risks. Hungary is likely to face pressure for additional spending. Priorities in fiscal policy should include reforming health financing, establishing checks on hidden subsidies in guarantee programs, and determining the government's optimal exposure to risk. In terms of institutions, the government should aim to create a more flexible, responsive budget process and greater capacity to analyze medium-term fiscal risks, to build a more results-oriented budget management system, and to improve mechanisms for sharing risk between the public and private sectors under government programs.Insurance&Risk Mitigation,Banks&Banking Reform,International Terrorism&Counterterrorism,Payment Systems&Infrastructure,Financial Crisis Management&Restructuring,Banks&Banking Reform,National Governance,Insurance&Risk Mitigation,Municipal Financial Management,Financial Crisis Management&Restructuring