Budget theory is the academic study of political and social motivations behind government and civil society

budgeting A budget is a calculation plan, usually but not always financial plan, financial, for a defined accounting period, period, often one year or a month. A budget may include anticipated sales volumes and revenues, resource quantities including tim ...

. Classic theorists in Public Budgeting include Henry Adams, William F. Willoughby, V. O. Key, Jr., and, more recently, Aaron Wildavsky. Notable recent theorists include Frank R. Baumgartner, Bryan D. Jones, Richard Fenno, Allen Schick, Dennis Ippolito, Naomi Caiden, Irene Rubin, James D. Savage, Thomas Greitens, Gary Wamsley, and Usman W. Chohan. Budget theory was a central topic during the

Progressive Era The Progressive Era (1890s–1920s) was a period in the United States characterized by multiple social and political reform efforts. Reformers during this era, known as progressivism in the United States, Progressives, sought to address iss ...

and was much discussed in municipal bureaus and other academic and quasi-academic facilities of that time such as the nascent

Brookings Institution The Brookings Institution, often stylized as Brookings, is an American think tank that conducts research and education in the social sciences, primarily in economics (and tax policy), metropolitan policy, governance, foreign policy, global econo ...

. The executive budget in United States was a financial innovation designed to empower city mayors and city managers with the capacity to implement needed policy reforms in the

. Since that time, the executive budget has become a tool by which the president of the United States has been able to substantively shape policy and draw power to the president from Congress, which was originally charged with "holding the purse" (and still is constitutionally, as there is no federal-legislative authority to change the constitution outside the amendment process or for congress to legislate away their authority). This has resulted in an ever increasing role and power base for what is now called the

Office of Management and Budget The Office of Management and Budget (OMB) is the largest office within the Executive Office of the President of the United States (EOP). The office's most prominent function is to produce the president's budget, while it also examines agency pro ...

Budget, Civil society and Constitutional economics

Constitutional economics Constitutional economics is a research program in economics and constitutionalism that has been described as explaining the choice "of alternative sets of legal-institutional-constitutional rules that constrain the choices and activities of econom ...

is a field of

economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...

and

constitutionalism Constitutionalism is "a compound of ideas, attitudes, and patterns of behavior elaborating the principle that the authority of government derives from and is limited by a body of fundamental law". Political organizations are constitutional to ...

which describes and analyzes the specific interrelationships between constitutional issues and functioning of the economy including budget process. The standards of constitutional economics when used during annual

budget A budget is a calculation plan, usually but not always financial plan, financial, for a defined accounting period, period, often one year or a month. A budget may include anticipated sales volumes and revenues, resource quantities including tim ...

planning, as well as the latter's transparency to the society, are of the primary guiding importance to the implementation of the

rule of law The essence of the rule of law is that all people and institutions within a Body politic, political body are subject to the same laws. This concept is sometimes stated simply as "no one is above the law" or "all are equal before the law". Acco ...

. Also, the availability of an effective court system, to be used by the

civil society Civil society can be understood as the "third sector" of society, distinct from government and business, and including the family and the private sphere.government A government is the system or group of people governing an organized community, generally a State (polity), state. In the case of its broad associative definition, government normally consists of legislature, executive (government), execu ...

spending and executive impoundment of any previously authorized appropriations, becomes a key element for the success of any influential civil society. The term “constitutional economics” was used by American economist – James M. Buchanan – as a name for a new academic sub-discipline that in 1986 brought him the Nobel Prize in Economic Sciences for his “development of the contractual and constitutional bases for the theory of economic and political decision-making.” Buchanan rejects “any organic conception of the state as superior in wisdom, to the individuals who are its members.” This philosophical position is, in fact, the very subject matter of constitutional economics. Buchanan believes that a constitution, intended for use by at least several generations of citizens, must be able to adjust itself for pragmatic economic decisions and to balance interests of the

state State most commonly refers to: * State (polity), a centralized political organization that regulates law and society within a territory **Sovereign state, a sovereign polity in international law, commonly referred to as a country **Nation state, a ...

and society against those of individuals and their constitutional rights to personal freedom and private happiness. The Russian school of constitutional economics was created in the early 21st century with the idea that CE allows for a combined economic and constitutional analysis in the legislative, first of all, budget process, thus helping to overcome arbitrariness in the economic and financial decision-making and to open entrance to civil society into budget process. This model of CE is based on the understanding that it is necessary to narrow the gap between practical enforcement of the economic, social and political rights granted by the constitution and the annual (or mid-term) economic policy, budget legislation and administrative policies conducted by the government. In 2006, the

Russian Academy of Sciences The Russian Academy of Sciences (RAS; ''Rossíyskaya akadémiya naúk'') consists of the national academy of Russia; a network of scientific research institutes from across the Russian Federation; and additional scientific and social units such ...

has officially recognized constitutional economics as a separate academic sub-discipline. Constitutional economics studies such issues as the proper national

wealth Wealth is the abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions. This includes the core meaning as held in the originating Old English word , which is from an ...

distribution including the government spending on the judiciary, which in many transitional and developing countries is completely controlled by the executive. The latter undermines the principle of powers' “

checks and balances The separation of powers principle functionally differentiates several types of state power (usually law-making, adjudication, and execution) and requires these operations of government to be conceptually and institutionally distinguishabl ...

”, as it creates a critical financial dependence of the judiciary. It is important to distinguish between the two methods of

corruption Corruption is a form of dishonesty or a criminal offense that is undertaken by a person or an organization that is entrusted in a position of authority to acquire illicit benefits or abuse power for one's gain. Corruption may involve activities ...

of the

judiciary The judiciary (also known as the judicial system, judicature, judicial branch, judiciative branch, and court or judiciary system) is the system of courts that adjudicates legal disputes/disagreements and interprets, defends, and applies the law ...

: the state (through budget planning and various privileges – being the most dangerous), and the private. The state corruption of the judiciary makes it almost impossible for any business to optimally facilitate the growth and development of national

market economy A market economy is an economic system in which the decisions regarding investment, production, and distribution to the consumers are guided by the price signals created by the forces of supply and demand. The major characteristic of a mark ...

.Peter Barenboim, Defining the rules, The European Lawyer, Issue 90, October 2009

Budget, Civil society and Constitutional economics

See also