Public Budget Ratcheting: Do Malaysia Federal Government Agencies Adjust Their Budgets Based on Expenditure Variances?
Public budget is an important role in achieving a country’s economic and social development goals. It essentially requires that an entire government budget be managed effectively and efficiently to ensure attainment of those goals as well as well-being of the citizens. Therefore, it is necessary...
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| Main Authors: | , , , , |
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| Format: | E-Article |
| Language: | English |
| Published: |
Universiti Malaysia Sarawak, (UNIMAS)
2016
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/13691/1/Public%20Budget%20Ratcheting%20%28abstract%29.pdf http://ir.unimas.my/id/eprint/13691/ http://publisher.unimas.my/ojs/index.php/URAF/article/view/289/pdf9 |
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| Institution: | Universiti Malaysia Sarawak |
| Language: | English |
| Summary: | Public budget is an important role in achieving a country’s economic and social development
goals. It essentially requires that an entire government budget be managed effectively and
efficiently to ensure attainment of those goals as well as well-being of the citizens. Therefore, it
is necessary to examine government spending behaviour and the process of budget preparation.
This study looks into the relationship between changes in current budget and expenditure
variances, in particular, operating expenditure of the Malaysia federal government. The
influence of expenditure variances (overspending/ under spending) on current budget changes is
examined to determine if prior year expenditure variances cause non-symmetry changes in
current budget so as to identify the presence of budget ratcheting. Dynamic Panel Regression
Analysis is used to examine the data from forty four government agencies/programs, covering
the period from 2010 until 2014. The findings reveal that there is a significant positive
association between changes in current budget with prior year overspending by agency/program.
However, the relationship between changes in current budget with prior year underspending by
agency/program is not significant. The contribution of the research highlights that the presence
of budget ratcheting among the federal government agencies/programs of public organisations
needs to be indicated to enhance budget administration regarding ratcheting. |
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