Modern Budget Forecasting in the American States: Precision, Uncertainty, and Politics

This book, by Michael J. Brogan, examines government budgeting through the lens of public budget forecast errors. In examining this aspect of the budgetary process, Brogan helps readers understand levels of political and financial risk that policymakers are willing to accept in estimating the likelihood of accurate budget projections. This title is noteworthy in its innovative, accessible approach to examining the budget process through an analysis of forecast errors. Unlike most public budgeting books, which focus primarily on the technical aspects of budgeting or on the politics of the budget process, this book bridges the technical and political aspects of budgeting, thereby providing a more comprehensive analysis of contemporary issues and research in public budgetary matters. In light of the current financial crisis in the United States, this book is crucial for providing readers with a comprehensive review of the limits of budget projections and how political forces shape the forecasting process. Throughout the text, readers are presented with relevant state-specific mini cases. The mini cases highlight some of the difficulties in projecting future revenue and spending patterns, as well as the political conflict that can ensue. The empirical findings, mini cases, and arguments presented throughout this book are intended to empower readers, giving them the expertise needed to better understand how uncertainty in public budget forecasts affects the budget process. Ultimately, this knowledge can help citizens connect the financial management of a state with its governing patterns.

Table of Contents:
Preface Chapter 1: Introduction to the Public Budgeting Forecast Process Chapter 2: The Process and Politics of Generating Budget Forecast Errors Chapter 3: Inter-Temporal Variation, Fiscal Uncertainty and State-level Long-Term Revenue Budget Forecasts Errors Chapter 4: Projecting Expenditures: Revenue Uncertainty, Public Choices, Political Institutions, Elections and Forecast Errors Chapter 5: Interpreting Budget Forecast Errors: Fiscal Shirking, Financial Uncertainty and Public Opinion Chapter 6: The Financial Consequences of State-Level Budget Forecast Errors Chapter 7: The Electoral Consequences of Budget Forecast Errors Chapter 8: Budget Forecasting in the States—Reforms, Institutions, Politics and Uncertainty Bibliography

About the Author :
Michael J. Brogan is associate professor of political science at Rider University.

Review :
Brogan provides a focused, thoughtful introduction to the budget forecasting process. The author divides the book into two sections. The first section introduces the reader to the methodology of budget forecasting. While these chapters include a great deal of technical information, Brogan does a good job of making the material accessible. Moreover, his use of mini-cases helps to illustrate his points through real-world examples. The second section examines the degree to which incumbent politicians are held accountable for inaccurate budget forecasts. This part of the book should be of greater interest to economists teaching courses in public economics. Chapter 7, looking at whether or not there are direct consequences at the polls for politicians who oversee inaccurate budget forecasts, is particularly noteworthy; the chapter includes a mini-case on the 2010 gubernatorial election, which is fascinating. Brogan suggests that this is a volume well suited to practitioners and graduate students, and that is certainly the case. Summing Up: Recommended. Graduate students, researchers/faculty, and professionals/practitioners. The politics and technical methods of fiscal forecasting play a critical, yet often underappreciated, role in the budgetary process. Spending and revenue decisions, compliance with procedural rules, and the evaluation of credit ratings are all tied to forecasting. Michael Brogan’s book is an excellent introduction to forecasting that should be read by scholars and practitioners interested in budgetary policy at the state level of government. Brogan makes what is generally a dry subject interesting and enlightening, writing in a way that makes budget forecasting accessible to students, practitioners, and the public. The mini-case studies of various state government practices illustrate the importance of understanding the ways in which forecasting errors and inaccuracies impact policy making. If anyone ever thought that economic forecasts are reliable and valid, or worse, could be scientific, and that politics should be divorced from budget forecasting and allocation, they should read this book on the experiences of several states.