Daniel L. Smith

Daniel L. Smith
Associate Professor of Public Budgeting and Financial Management

Dan Smith studies state government budgeting and financial management. His research focuses on the effects of state fiscal institutions, especially balanced budget requirements, and the implications of how states accumulate and use fund balances in state rainy day funds, unemployment trusts, and pension funds. His research appears in Journal of Policy Analysis and ManagementJournal of Public Administration Research and TheoryPublic Administration ReviewPublic Budgeting & Finance, and Public Choice, among others. In addition, he is on four editorial boards, including those of the Journal of Public Administration Research and Theory and Public Administration Review, and is co-author of two textbooks: Financial Management for Public, Health, and Not-for-Profit Organizations (Pearson Prentice Hall, 4th edition), and Government and Not-for-Profit Accounting: Concepts and Practices (Wiley, forthcoming 7th edition). 

Professor Smith is Director of the Finance Specialization at NYU Wagner, and Co-Chairs the Finance and Policy Planning Committee of the NYU Tenured/Tenure-Track Faculty Senators Council. In addition, he is a Marron Fellow at NYU's Marron Institute of Urban Management. Extramurally, he serves on the Governmental Accounting Standards Advisory Council (GASAC), he is the incoming Vice Chair of the Association for Budgeting and Financial Management (ABFM), and for four years he was on the Board of Directors of the New York University Federal Credit Union, where he was also Treasurer and Chair of the Assets and Liabilities Management Committee. 

Professor Smith earned his Ph.D. in Public Administration in the School of Public and International Affairs at The University of Georgia.

Semester Course
Fall 2014 PADM-GP.2143.001 Government Budgeting

This course provides an introduction to government budgeting. The first half of the course consists of lectures, case studies, and memo-writing; the second half consists of a budgeting laboratory in which students work in teams to prepare a budget for a local government. Throughout the course, students will have a chance to apply the tools learned in the core financial management course, such as net present value and variance analysis; acquire additional financial management tools, such as revenue-forecasting techniques; and further develop their Excel skills, particularly the creation and use of pivot tables.


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Fall 2014 CORE-GP.1021.003 Financial Management for Public, Nonprofit, and Health Organizations

In this core course in financial management, students will learn the fundamentals of budgeting and accounting for public, health, and not-for-profit organizations. Through readings, lectures, real-world case studies, and assignments, students will gain an understanding of how to use financial information in organizational planning, implementation, control, reporting, and analysis. In addition, students will have the chance to develop their spreadsheet skills by using Excel to perform financial calculations and create financial documents.

The first half of the course focuses on managerial accounting, a set of tools used by managers for planning, implementation, and control. Topics in this portion of the course include operating budgets, cash budgets, break-even analysis, indirect cost allocation, variance analysis, the time value of money, capital budgeting, and long-term financing.

The second half of the course focuses on financial accounting, a set of tools used by managers and outside observers for reporting on and analyzing an organization’s financial health. Topics in this portion of the course include the preparation and analysis of financial statements (balance sheet, activity statement, and cash flow statement), ethics in financial management, and government accounting and financial condition analysis.


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Spring 2014 PADM-GP.2902.002 Multiple Regression and Intro to Econometrics

Multiple regression is the core statistical technique used by policy and finance analysts in their work. In this course, you will learn how to use and interpret this critical statistical technique. Specifically you will learn how to evaluate whether regression coefficients are biased, whether standard errors (and thus t statistics) are valid, and whether regressions used in policy and finance studies support causal arguments.

In addition, using a number of different datasets, you will compute the statistics discussed in class using a statistical computer package, and you will see how the results reflect the concepts discussed in class. If you choose, you can do a larger data and regression project in a team.


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Fall 2013 CORE-GP.1021.001 Financial Management for Public, Nonprofit, and Health Organizations

In this core course in financial management, students will learn the fundamentals of budgeting and accounting for public, health, and not-for-profit organizations. Through readings, lectures, real-world case studies, and assignments, students will gain an understanding of how to use financial information in organizational planning, implementation, control, reporting, and analysis. In addition, students will have the chance to develop their spreadsheet skills by using Excel to perform financial calculations and create financial documents.

The first half of the course focuses on managerial accounting, a set of tools used by managers for planning, implementation, and control. Topics in this portion of the course include operating budgets, cash budgets, break-even analysis, indirect cost allocation, variance analysis, the time value of money, capital budgeting, and long-term financing.

The second half of the course focuses on financial accounting, a set of tools used by managers and outside observers for reporting on and analyzing an organization’s financial health. Topics in this portion of the course include the preparation and analysis of financial statements (balance sheet, activity statement, and cash flow statement), ethics in financial management, and government accounting and financial condition analysis.


Download Syllabus
Fall 2012 CORE-GP.1021.001 Financial Management for Public, Nonprofit, and Health Organizations

In this core course in financial management, students will learn the fundamentals of budgeting and accounting for public, health, and not-for-profit organizations. Through readings, lectures, real-world case studies, and assignments, students will gain an understanding of how to use financial information in organizational planning, implementation, control, reporting, and analysis. In addition, students will have the chance to develop their spreadsheet skills by using Excel to perform financial calculations and create financial documents.

The first half of the course focuses on managerial accounting, a set of tools used by managers for planning, implementation, and control. Topics in this portion of the course include operating budgets, cash budgets, break-even analysis, indirect cost allocation, variance analysis, the time value of money, capital budgeting, and long-term financing.

The second half of the course focuses on financial accounting, a set of tools used by managers and outside observers for reporting on and analyzing an organization’s financial health. Topics in this portion of the course include the preparation and analysis of financial statements (balance sheet, activity statement, and cash flow statement), ethics in financial management, and government accounting and financial condition analysis.


Download Syllabus
Fall 2012 CORE-GP.1021.003 Financial Management for Public, Nonprofit, and Health Organizations

In this core course in financial management, students will learn the fundamentals of budgeting and accounting for public, health, and not-for-profit organizations. Through readings, lectures, real-world case studies, and assignments, students will gain an understanding of how to use financial information in organizational planning, implementation, control, reporting, and analysis. In addition, students will have the chance to develop their spreadsheet skills by using Excel to perform financial calculations and create financial documents.

The first half of the course focuses on managerial accounting, a set of tools used by managers for planning, implementation, and control. Topics in this portion of the course include operating budgets, cash budgets, break-even analysis, indirect cost allocation, variance analysis, the time value of money, capital budgeting, and long-term financing.

The second half of the course focuses on financial accounting, a set of tools used by managers and outside observers for reporting on and analyzing an organization’s financial health. Topics in this portion of the course include the preparation and analysis of financial statements (balance sheet, activity statement, and cash flow statement), ethics in financial management, and government accounting and financial condition analysis.


Download Syllabus
Spring 2012 PADM-GP.2902.002 Multiple Regression and Intro to Econometrics

Multiple regression is the core statistical technique used by policy and finance analysts in their work. In this course, you will learn how to use and interpret this critical statistical technique. Specifically you will learn how to evaluate whether regression coefficients are biased, whether standard errors (and thus t statistics) are valid, and whether regressions used in policy and finance studies support causal arguments.

In addition, using a number of different datasets, you will compute the statistics discussed in class using a statistical computer package, and you will see how the results reflect the concepts discussed in class. If you choose, you can do a larger data and regression project in a team.


Download Syllabus
Spring 2012 PADM-GP.2902.003 Multiple Regression and Intro to Econometrics

Multiple regression is the core statistical technique used by policy and finance analysts in their work. In this course, you will learn how to use and interpret this critical statistical technique. Specifically you will learn how to evaluate whether regression coefficients are biased, whether standard errors (and thus t statistics) are valid, and whether regressions used in policy and finance studies support causal arguments.

In addition, using a number of different datasets, you will compute the statistics discussed in class using a statistical computer package, and you will see how the results reflect the concepts discussed in class. If you choose, you can do a larger data and regression project in a team.


Download Syllabus
Fall 2011 CORE-GP.1021.001 Financial Management for Public, Nonprofit, and Health Organizations

In this core course in financial management, students will learn the fundamentals of budgeting and accounting for public, health, and not-for-profit organizations. Through readings, lectures, real-world case studies, and assignments, students will gain an understanding of how to use financial information in organizational planning, implementation, control, reporting, and analysis. In addition, students will have the chance to develop their spreadsheet skills by using Excel to perform financial calculations and create financial documents.

The first half of the course focuses on managerial accounting, a set of tools used by managers for planning, implementation, and control. Topics in this portion of the course include operating budgets, cash budgets, break-even analysis, indirect cost allocation, variance analysis, the time value of money, capital budgeting, and long-term financing.

The second half of the course focuses on financial accounting, a set of tools used by managers and outside observers for reporting on and analyzing an organization’s financial health. Topics in this portion of the course include the preparation and analysis of financial statements (balance sheet, activity statement, and cash flow statement), ethics in financial management, and government accounting and financial condition analysis.


Download Syllabus
Fall 2011 CORE-GP.1021.003 Financial Management for Public, Nonprofit, and Health Organizations

In this core course in financial management, students will learn the fundamentals of budgeting and accounting for public, health, and not-for-profit organizations. Through readings, lectures, real-world case studies, and assignments, students will gain an understanding of how to use financial information in organizational planning, implementation, control, reporting, and analysis. In addition, students will have the chance to develop their spreadsheet skills by using Excel to perform financial calculations and create financial documents.

The first half of the course focuses on managerial accounting, a set of tools used by managers for planning, implementation, and control. Topics in this portion of the course include operating budgets, cash budgets, break-even analysis, indirect cost allocation, variance analysis, the time value of money, capital budgeting, and long-term financing.

The second half of the course focuses on financial accounting, a set of tools used by managers and outside observers for reporting on and analyzing an organization’s financial health. Topics in this portion of the course include the preparation and analysis of financial statements (balance sheet, activity statement, and cash flow statement), ethics in financial management, and government accounting and financial condition analysis.


Download Syllabus
Spring 2011 PADM-GP.2902.002 Multiple Regression and Intro to Econometrics

Multiple regression is the core statistical technique used by policy and finance analysts in their work. In this course, you will learn how to use and interpret this critical statistical technique. Specifically you will learn how to evaluate whether regression coefficients are biased, whether standard errors (and thus t statistics) are valid, and whether regressions used in policy and finance studies support causal arguments.

In addition, using a number of different datasets, you will compute the statistics discussed in class using a statistical computer package, and you will see how the results reflect the concepts discussed in class. If you choose, you can do a larger data and regression project in a team.


Download Syllabus
Spring 2011 PADM-GP.2902.003 Multiple Regression and Intro to Econometrics

Multiple regression is the core statistical technique used by policy and finance analysts in their work. In this course, you will learn how to use and interpret this critical statistical technique. Specifically you will learn how to evaluate whether regression coefficients are biased, whether standard errors (and thus t statistics) are valid, and whether regressions used in policy and finance studies support causal arguments.

In addition, using a number of different datasets, you will compute the statistics discussed in class using a statistical computer package, and you will see how the results reflect the concepts discussed in class. If you choose, you can do a larger data and regression project in a team.


Download Syllabus
Fall 2010 CORE-GP.1021.001 Financial Management for Public, Nonprofit, and Health Organizations

In this core course in financial management, students will learn the fundamentals of budgeting and accounting for public, health, and not-for-profit organizations. Through readings, lectures, real-world case studies, and assignments, students will gain an understanding of how to use financial information in organizational planning, implementation, control, reporting, and analysis. In addition, students will have the chance to develop their spreadsheet skills by using Excel to perform financial calculations and create financial documents.

The first half of the course focuses on managerial accounting, a set of tools used by managers for planning, implementation, and control. Topics in this portion of the course include operating budgets, cash budgets, break-even analysis, indirect cost allocation, variance analysis, the time value of money, capital budgeting, and long-term financing.

The second half of the course focuses on financial accounting, a set of tools used by managers and outside observers for reporting on and analyzing an organization’s financial health. Topics in this portion of the course include the preparation and analysis of financial statements (balance sheet, activity statement, and cash flow statement), ethics in financial management, and government accounting and financial condition analysis.


Download Syllabus
Fall 2010 CORE-GP.1021.002 Financial Management for Public, Nonprofit, and Health Organizations

In this core course in financial management, students will learn the fundamentals of budgeting and accounting for public, health, and not-for-profit organizations. Through readings, lectures, real-world case studies, and assignments, students will gain an understanding of how to use financial information in organizational planning, implementation, control, reporting, and analysis. In addition, students will have the chance to develop their spreadsheet skills by using Excel to perform financial calculations and create financial documents.

The first half of the course focuses on managerial accounting, a set of tools used by managers for planning, implementation, and control. Topics in this portion of the course include operating budgets, cash budgets, break-even analysis, indirect cost allocation, variance analysis, the time value of money, capital budgeting, and long-term financing.

The second half of the course focuses on financial accounting, a set of tools used by managers and outside observers for reporting on and analyzing an organization’s financial health. Topics in this portion of the course include the preparation and analysis of financial statements (balance sheet, activity statement, and cash flow statement), ethics in financial management, and government accounting and financial condition analysis.


Download Syllabus
Spring 2010 CORE-GP.1011.001 Statistical Methods for Public, Nonprofit, and Health Management

This course introduces students to basic statistical methods and their application to management, policy,
and financial decision-making. The course covers the essential elements of descriptive statistics,
univariate and bivariate statistical inference, and introduces multivariate analysis. In addition to
covering statistical theory the course emphasizes applied statistics and data analysis, using the software package, SPSS.

The course has several "audiences" and goals. For all Wagner students, the course develops basic skills
and encourages a critical approach to reviewing statistical findings and using statistical reasoning in
decision making. For those planning to continue studying statistics (often those in policy and finance
concentrations) this course additionally provides the foundation for that further work.


Download Syllabus
Spring 2010 CORE-GP.1011.003 Statistical Methods for Public, Nonprofit, and Health Management

This course introduces students to basic statistical methods and their application to management, policy,
and financial decision-making. The course covers the essential elements of descriptive statistics,
univariate and bivariate statistical inference, and introduces multivariate analysis. In addition to
covering statistical theory the course emphasizes applied statistics and data analysis, using the software package, SPSS.

The course has several "audiences" and goals. For all Wagner students, the course develops basic skills
and encourages a critical approach to reviewing statistical findings and using statistical reasoning in
decision making. For those planning to continue studying statistics (often those in policy and finance
concentrations) this course additionally provides the foundation for that further work.


Download Syllabus
Fall 2009 CORE-GP.1021.001 Financial Management for Public, Nonprofit, and Health Organizations

In this core course in financial management, students will learn the fundamentals of budgeting and accounting for public, health, and not-for-profit organizations. Through readings, lectures, real-world case studies, and assignments, students will gain an understanding of how to use financial information in organizational planning, implementation, control, reporting, and analysis. In addition, students will have the chance to develop their spreadsheet skills by using Excel to perform financial calculations and create financial documents.

The first half of the course focuses on managerial accounting, a set of tools used by managers for planning, implementation, and control. Topics in this portion of the course include operating budgets, cash budgets, break-even analysis, indirect cost allocation, variance analysis, the time value of money, capital budgeting, and long-term financing.

The second half of the course focuses on financial accounting, a set of tools used by managers and outside observers for reporting on and analyzing an organization’s financial health. Topics in this portion of the course include the preparation and analysis of financial statements (balance sheet, activity statement, and cash flow statement), ethics in financial management, and government accounting and financial condition analysis.


Download Syllabus
Fall 2009 CORE-GP.1021.003 Financial Management for Public, Nonprofit, and Health Organizations

In this core course in financial management, students will learn the fundamentals of budgeting and accounting for public, health, and not-for-profit organizations. Through readings, lectures, real-world case studies, and assignments, students will gain an understanding of how to use financial information in organizational planning, implementation, control, reporting, and analysis. In addition, students will have the chance to develop their spreadsheet skills by using Excel to perform financial calculations and create financial documents.

The first half of the course focuses on managerial accounting, a set of tools used by managers for planning, implementation, and control. Topics in this portion of the course include operating budgets, cash budgets, break-even analysis, indirect cost allocation, variance analysis, the time value of money, capital budgeting, and long-term financing.

The second half of the course focuses on financial accounting, a set of tools used by managers and outside observers for reporting on and analyzing an organization’s financial health. Topics in this portion of the course include the preparation and analysis of financial statements (balance sheet, activity statement, and cash flow statement), ethics in financial management, and government accounting and financial condition analysis.


Download Syllabus
Spring 2009 CORE-GP.1011.001 Statistical Methods for Public, Nonprofit, and Health Management

This course introduces students to basic statistical methods and their application to management, policy,
and financial decision-making. The course covers the essential elements of descriptive statistics,
univariate and bivariate statistical inference, and introduces multivariate analysis. In addition to
covering statistical theory the course emphasizes applied statistics and data analysis, using the software package, SPSS.

The course has several "audiences" and goals. For all Wagner students, the course develops basic skills
and encourages a critical approach to reviewing statistical findings and using statistical reasoning in
decision making. For those planning to continue studying statistics (often those in policy and finance
concentrations) this course additionally provides the foundation for that further work.


Download Syllabus
Spring 2009 CORE-GP.1011.002 Statistical Methods for Public, Nonprofit, and Health Management

This course introduces students to basic statistical methods and their application to management, policy,
and financial decision-making. The course covers the essential elements of descriptive statistics,
univariate and bivariate statistical inference, and introduces multivariate analysis. In addition to
covering statistical theory the course emphasizes applied statistics and data analysis, using the software package, SPSS.

The course has several "audiences" and goals. For all Wagner students, the course develops basic skills
and encourages a critical approach to reviewing statistical findings and using statistical reasoning in
decision making. For those planning to continue studying statistics (often those in policy and finance
concentrations) this course additionally provides the foundation for that further work.


Download Syllabus
Date Publication/Paper
2013

Smith, Daniel L., and Yilin Hou. 2013. Balanced Budget Requirements and State Spending: A Long-Panel Study Public Budgeting & Finance 33(2): 1-18.
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Abstract

This study tests the effects of balanced budget requirements on three measures of state expenditure using data on 48 states for the years 1950 to 2004. We find that the following rules are effective in constraining expenditures: 1) requiring that the governor submit a balanced budget; 2) placing controls on supplemental appropriations; and 3) prohibiting the carry-over of a deficit from one fiscal year or biennium into the next. The latter two rules exert larger individual effects than the first. All else equal, states can best improve their prospects of reigning in spending by instituting technical rules that govern budgetary outcomes, as opposed to political rules that dictate how the budget is assembled and approved. 

Smith, Daniel L., and Jeffrey B. Wenger. 2013. State Unemployment Insurance Trust Solvency and Benefit Generosity Journal of Policy Analysis and Management 32(3): 536-53.
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Abstract

This paper employs panel estimators with data on the 50 American states for the years 1963 to 2006 to test the relationship between Unemployment Insurance (UI) trust fund solvency and UI benefit generosity. We find that both average and maximum weekly UI benefit amounts, as ratios to the average weekly wage, are higher in states and in years with more highly solvent trust funds. This result holds after controlling for state-level unemployment rate, Gross Domestic Product (GDP), population growth, legislative political ideology, partisan control of the executive and legislative branches, and gubernatorial election year across multiple specifications, including fixed-effects and dynamic panel estimators. We propose a theory of moderate coupling as the causal mechanism, whereby UI program benefits and financing are directly related but are not as tightly linked as in other social insurance programs, such as Medicaid. The findings have important policy implications for the funding of states’ UI systems. As a consequence of moderate coupling, the countercyclicality of the UI program is dampened. 

2012

Finkler, Steven A., Robert M. Purtell, Thad D. Calabrese, and Daniel L. Smith. 2012. Financial Management for Public, Health, and Not-for-Profit Organizations 4th ed. Upper Saddle River, NJ: Pearson Prentice Hall.
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Rose, Shanna, and Daniel L. Smith. 2012. Budget Slack, Institutions, and Transparency Public Administration Review 72(2): 187-95
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Abstract

Economic theory suggests that it is optimal for governments to use precautionary saving as a countercyclical tool. However, the availability of surplus funds often triggers political pressure for tax cuts and spending increases. Mechanisms for alleviating that pressure include limiting the transparency of slack resources and limiting politicians' discretion to use slack resources for purposes other than stabilization. This article investigates the extent to which these two mechanisms are substitutes. In particular, the authors examine whether the widespread adoption of budget stabilization funds (BSFs) in the U.S. states over the past several decades has been accompanied by a decline in conservative revenue forecast bias. Using panel data from 47 states over a 22-year period, they find that the adoption of a BSF reduces revenue underestimation by approximately two-thirds; however, the size of the effect depends in part on how much a state saves in the BSF and the rules governing BSF deposits and withdrawals. The results suggest that BSFs have the unintended effect of increasing fiscal transparency.

Smith, Daniel L. 2012. An Empirical Framework for Public Finance and Financial Management Public Administration Review 72(6): 934-37.
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2011

Smith, Daniel L. 2011. Federalist No. 7: Is Disunion among the States a Hidden Source of Strength? Public Administration Review 71(S1): s15-s21.
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Abstract

Federalist Nos. 6 and 7 address the problems of disunion that led the founders to imagine a stronger national government, arguing that the states were and would continue to be a source of unyielding conflict without national supremacy. This essay asks how the states have adjusted to the Constitution under the Tenth Amendment and posits that the states are a hidden source of energy toward good government in their own right.

Miller, Lawrence J., and Daniel L. Smith. 2011. The Great Recession's Impact on New York City's Budget Municipal Finance Journal 32(1): 89-113.
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Abstract

Strong property tax growth and proactive policies - including beginning the recession with a substantial surplus of $5.3 billion (9 percent of revenues) - offset a severe contraction in income tax receipts, protecting the City's budget such that it never contracted in absolute terms during or immediately following the Great Recession. Policymakers increased property and sales tax rates, utilized fund balances, cut agency budgets repeatedly, and re-appropriated retiree health benefits in response to the fiscal challenges brought about by the Great Recession. Whether one attributes it to compliance with a strong, state-mandated, balanced budget rule or adept leadership, New York City certainly appears to be dealing effectively with the Great Recession's impact on its budget. However, City leaders have asked lower income residents to bear a substantial portion of the burden by favoring more regressive tax policies and by cutting the social service agency's budget substantially. With forecast budget gaps of $3 billion and $4 billion in FY 2012 and FY 2013, the long-term impact of the Great Recession on New York City's budget remains an open question.

Kioko, Sharon N., Justin Marlowe, David S.T. Matkin, Michael Moody, Daniel L. Smith, and Zhirong (Jerry) Zhao. 2011. Why Public Financial Management Matters Journal of Public Administration Research and Theory 21(S1): i113-i124.
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Abstract

Public administration and management (PAM) scholars have long recognized that financial resources are the lifeblood of public organizations. Less appreciated is how the study of public financial management (PFM) can inform the theory, research, and practice of PAM broadly. In this article, we argue that PFM research brings a variety of conceptual, analytical, and empirical insights to bear on some of public administration and management's timeless questions. To illustrate this claim, we synthesize findings from a variety of research across the PFM subfield.

2010

Marlowe, Justin, and Daniel L. Smith. 2010. Adding Value in a World of Diffuse Power: Reintroducing Public Management and Public Financial Management The Future of Public Administration Around the World: The Minnowbrook Perspective, pp. 221-232. Rosemary O'Leary, David M. Van Slyke, and Soonhee Kim (Eds.). Georgetown University Press.
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Abstract

Questions of how public organizations control and manage resources have been relegated to an insular subfield of contemporary public management. This is both unfortunate and unnatural because insights from the study of budgeting and financial management have traditionally been a driving force of public management's conceptual and empirical development. In this paper we seek to address this problem by reconnecting contemporary findings from the budgeting and financial management subfield to broader concerns in public management. We focus our discussion on the centrality of management technique in contemporary public management, and we argue that research in select areas of contemporary public budgeting and financial management has and will continue to illuminate the implications of reform and innovation in management technique, particularly in our current environment of amorphous institutional arrangements and diffuse, shared power.

Hou, Yilin, and Daniel L. Smith. 2010. Do State Balanced Budget Requirements Matter? Testing Two Explanatory Frameworks Public Choice 145(1-2): 57-79.
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Abstract

Balanced budget requirements (BBRs) affect all aspects of financial operations. Previous studies relied on characterizations that highlight a constitutional-statutory distinction. Hou and Smith (Public Budgeting & Finance 26(3):22–45, 2006) instead propose a political-technical construct. This article uses probit estimation, six measures of balance, and long panels to test which framework offers more explanatory power. The findings suggest that BBRs matter to varying degrees. Technical requirements exert bigger effects than political ones, the effects are more obvious on narrower than broader measures of balance and in the later phases of the budget cycle, and the political-technical construct offers more explanatory power than the constitutional-statutory distinction.

Hou, Yilin, and Daniel L. Smith. 2010. Informal Norms as a Bridge between Formal Rules and Outcomes of Government Financial Operations: Evidence from State Balanced Budget Requirements Journal of Public Administration Research and Theory 20(3): 655-78.
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Abstract

Both formal rules and informal norms guide government operations; formal rules often function through informal norms. Balanced budget requirements (BBRs) are formal rules, but they are implemented via the intermediary of informal norms—interpretation of BBRs by state officials. This article examines the fiscal implications of informal norms that govern budgetary balance. We propose that informal norms have substantive implications in policy making and implementation. To test the proposition, we obtain state self-reported, time-varying data on balanced budget provisions as observations of informal norms, compare them against formal, codified balanced budget requirements from recent research to identify gaps between rules and norms, and decompose the gaps using two categories—“interpretations” and “reverse interpretations” of formal balanced budget requirements. We then conduct probit estimation to obtain the effects of informal norms as well as the interpretations and reverse interpretations on two measures of budgetary balance. Results show that informal norms do affect outcomes of government financial operations; the two-step decomposition of the gaps between formal rules and informal norms provides further information on the locus of these effects. The article identifies the interpretation of formal rules as a new research area, thus contributing to the budgetary institutions and policy implementation literatures.

2008

Smith, Daniel L. 2008. The Global Public Service: Taking on the Challenges of the 21st Century
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Abstract

This paper's first goal is to evaluate the evolution and state of scholarship in public administration. It begins with a question: How far have public administration theory and research advanced since 1940, when the self-aware study of public administration, as a field if not a discipline, took root in the United States? This paper argues that scholars of public administration in the U.S. and abroad continuously advance the scientific rigor of research and are cognizant of the real-world challenges faced by policymakers and public servants of all sorts. Nonetheless, it is further argued, there remains room for improving our scientific understanding of the public service in the twenty-first century. Turning to practice, the second section identifies how we might better link our scientific findings to the lessons we provide in the classroom. Finally, the paper concludes with a discussion on preparing the public service of the twenty-first century and beyond to manage some of the considerable challenges it will encounter.

2007

Smith, Daniel L. 2007. Rules, Participants, and Executive Politics in State Tax Revenue Forecasting Journal of Public Budgeting, Accounting & Financial Management 19(4): 472-87.
Abstract

This study examines whether rules, particular participants, and executive politics in state tax revenue estimation exert measurable influences on forecast error. Fixed-effects estimation using data from states’ respective fiscal years 1994 to 2003 indicates that all impact state tax revenue forecast accuracy in varying ways, and results suggest that policy can be crafted to effectively mitigate forecast error. Further examination of the quality of participation in tax revenue forecasting as well as the mechanisms of political involvement in this arena is suggested.

2006

Hou, Yilin, and Daniel L. Smith. 2006. A Framework for Understanding State Balanced Budget Requirement Systems: Reexamining Distinctive Features and an Operational Definition Public Budgeting & Finance 26(3): 22-45.
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Abstract

Studies of state fiscal and budgetary policies often use balanced budget requirements (BBRs) as explanatory variables. While current measures laid the crucial groundwork for a basic understanding of state BBRs, their lack of comprehensiveness threatens the validity of empirical work. Based on comprehensive legal research, this article offers a framework for analyzing state requirements: each state's BBRs form a coherent system for achieving budget balance through budget cycles; a fully developed BBR system offers a three-line construct against imbalance; and the more complete, developed, and explicit a BBR system is, the more stringent it will be in achieving budgetary balance.

Justice, Jonathan B., James Melitski, and Daniel L. Smith. 2006. E-Government as an Instrument of Fiscal Accountability and Responsiveness: Do the best practitioners employ the best practices? The American Review of Public Administration 36(3): 301-22.
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Abstract

Fiscal transparency and citizen participation in budgeting processes are widely promoted as means toward the ends of democratic accountability and responsiveness in the allocation and use of public funds. In the past decade, academics and practitioners enthusiastic about e-government have emphasized the potential for using information technology to enhance democratic governance. Putting these two streams of public administration theory and practice together, the authors developed criteria for assessing e-budgeting efforts and applied them to a sample of Web sites operated by state and local governments. Although practitioners are ahead of academics in exploring the potential of e-government for improving fiscal accountability and responsiveness, practice lags behind the relevant basic recommendations of the Government Finance Officers Association. This finding leads to research and practice agendas aimed at enhancing the use of e-government to enhance fiscal transparency and participation.