Using policy diffusion to understand budgetary outcomes around the globe
Evidence from around the globe indicates that many countries are suffering from financial crisis. This period of economic instability has been heightened in recent years as financial markets in Asia, Europe and the United States have declined. Market failure has forced many governments and NGOs to abandon capitalistic models in order to salvage the private sectors markets.
Given these fiscal crisis, it is important that countries examine the behavior of other countries, as they strive to improve economic stability. Hence, in this research we develop a comprehensive comparative approach to examining budget outcomes that emanates from the policy diffusion literature (Berry and Berry 1992). That is, countries should examine the policies of other countries and utilize policies and processes as they make budgetary decisions. In so doing, we developed an interactive comparative budget model that used three constructs: instrumental, structural and procedural. The constructs contained 4, 3 and 3 factors respectively. We then used data that was collected on eighteen countries around the globe to assess the factors within each construct (Menifield 2011). Given the various clusters that we found within each construct, we argue that not only have countries exhibited this sort of behavior in the past (performance budgeting), but that they should do so more often as evidence of success is achieved. That is, when a country is successful in improving its economy, other countries should mimic their behavior. Last, we created a list of best budgetary practices based on the data collected.