Understanding Public Budgeting: A Nation's Economic Regulation

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Chapter I. Public budgeting
The financial mechanism is one of the most important mechanism by which the state implements socio-economic regulation. The financial mechanism is a system of management of public budgeting, the main component of which is the state budget. Budget is a form of creating and spending of funds intended for financial provision of tasks and functions of the state and local government. The public budget plays a significant role in the political and economic life of the country. According to Willoughby, (2014) public budget is a government expenditures and the taxes, which supporting such expenditures. Under the public budget one can understand the budget of Tajikistan and the budgets of its regions. Public budgeting is …show more content…

If Incrementalism is adopted in budget process, it could be appropriate in researching the behaviours and strategy of policy actors; and could be a useful model in the process of administrative reforms. It could also be a good tool in the process of public management. Thus, Incrementalism may answer to key question by using previous historical data of what kind of budget has been used by the country in previous years, but it is not sufficient in the process of adopting new budget to count only on base budget. So, the Incrementalism is using base budget in the process of adopting new budget, and uses only inflationary adjustment from previous years and “the increments: some percentage increase from the base” and it “leads to a focus on micro-budgeting” (Lim, 2017, pp. 17-18). Then, when new budget is adopted, it’s has not too much of differences from previous year’s …show more content…

In 1990s there has been a lot of protesters who conclude that Incrementalism is out of date, and it is in the past. However, there are authors, who thinks that Incrementalism is alive, and in good condition (White, 1985). I think, Incrementalism is a useful theory with a system of realistic views about public budget process, which could influence the process of decision making. Based on understandings of political strategies, people’s and social needs it may excellently explain and predict the budget. That is why, it would be reasonable to improve the Incrementalism (Homework 2).
 Line item budgeting.
Functioning already for a long time type of budgeting Line-item budgeting, is a popular in all state organs. Line-item budgeting is useful and popular, because it has clear reports and easy to control (Lim, 2017, p. 35).
In Line-item budgeting, funds are distributed between certain items or objects of expenditure. Expenses for necessary items for work are calculated for the next year so that the corresponding service has only a limited opportunity, if there is a justification, to increase by a certain amount the amount of expenses provided for under this item in the previous financial year. The main advantage of this system is strict control over the activities of funding

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