Type of Document Dissertation Author Guo, Hai Author's Email Address hguo1@student.gsu.edu URN etd-10022008-091414 Title Setting Discretionary Fiscal Policy within the Limits of Budgetary Institutions: Evidence from American State Governments Degree Ph.D. Department Public Administration and Urban Studies Advisory Committee
Advisor Name Title Dr. Katherine G. Willoughby Committee Chair Dr. David L. Sjoquist Committee Member Dr. Gordon A. Kingsley Committee Member Dr. Robert J. Eger Committee Member Dr. Sally Wallace Committee Member Keywords
- BBR
- TEL
- budgetary institutions
- discretionary fiscal policy
Date of Defense 2008-06-02 Availability unrestricted Abstract Unanticipated economic fluctuations exert pressure on state governments to adjust their discretionary fiscal policies to accommodate the changing fiscal situation. Even though states adjust fiscal policy as the economy fluctuates, the typical cyclical economic factors are not the sole determinant of such adjustments. State governments budgeting systems in the United States operate under a variety of budgetary institutions. The most prominent state government budgetary institutions include balanced budget rules (BBRs), tax and expenditure limits (TELs), and supermajority voting requirements for tax increases. This dissertation examines how these budgetary institutions affect state government choices of fiscal policy under different economic conditions. To better understand the effect of state level TELs, a stringency index of state level TEL is constructed considering the major structural features. The fixed-effect panel regressions are used for the analysis of impact of TEL and BBR and tax changes and the fixed-effect Tobit is adopted to test the impact of TEL and BBR on spending cuts after the budget is adopted. The result suggests that TEL plays a more important role affecting states discretionary fiscal adjustment from the tax side, while BBR plays a more important role affecting states discretionary fiscal adjustment from the expenditure side. Results of this research show that TEL exerts pressure on states that hinder state ability to deal with volatile fiscal situations, especially in the case of periods of budget crises.Files
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