The heart of NYU Wagner's programs is our faculty. An amalgam of full-time, clinical/research/visiting, and adjunct professors, they are outstanding teachers, expert researchers and committed practitioners.
Smith, Daniel L., and Yilin Hou. 2013. Balanced Budget Requirements and State Spending: A Long-Panel Study. Public Budgeting & Finance 33(2): 1-18.
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.
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.
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.
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. 2011. Federalist No. 7: Is Disunion among the States a Hidden Source of Strength? Public Administration Review 71(S1): s15-s21.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.