Article Analysis: The Local Government Budget Process
For the article analysis assignment, I will be reviewing and critiquing “To Increase Trust
in Government, Reinvent the Local Government Budget”. It is important to understand the way
the local government prepares its budget. The effectiveness of a properly prepared budget has
many benefits including trust in local government, community engagement and cooperation, and
promotion of new principles. To achieve this, there must be a different approach than the current
one being used to prepare the local government budget.
Summary
The article “To Increase Trust in Government, Reinvent the Local Government Budget”
expresses the importance of reinventing the local government budget process. It states that to
gain trust in the local government, a different approach must be taken. The current approach to
the budget process is described as traditional. The traditional approach is utilizing an incremental
budget process. There are advantages that are described which at some point in time were useful
for certain conflicting issues. However, with the severity of some of the same issues found today,
the old system is not effective. Changes like adopting new mental models, technology, and
geographic systems can help shape a new local government budget process. Comprehension of
how people make decisions, increasing awareness of equity issues, the framework for finances,
and community values reflected in the allocation of resources are other topics discussed in the
article.
Suggested Changes. Mental models have a lot of influence on general financial actions,
especially in the budgetary process. “A mental model is a tool that helps us make sense of the
world and manage complexity and large amounts of information” (Simplifying Complexity, n.d.-
b). The traditional budget approach uses mental models that do not provide fair outcomes. “For
example, a zero-sum game is often a mental model for traditional budgeting. But assuming that
someone’s gain has to be balanced by another’s loss leads to certain predictable and undesirable
behaviors” (Morril, 2021). GFOA’s Financial Foundation for Thriving Communities utilizes a
mental model called common pool resource thinking. According to Morril, “. . .the mental model
for GFOA’s Financial Foundations for Thriving Communities—suggests different, more
adaptive behaviors. Common pool resource theory identifies eight design principles to promote
sustainability of a shared common resources like fisheries or public grazing lands” (Morril,
2021).
The eight principles that pertain to common pool resource thinking can provide
significant changes to the local government budget process. The eight principles of this mental
model include clearly defined boundaries, proportional equivalence between benefits and costs,
collective-choice arrangements, monitoring, graduated sanctions, conflict resolution
mechanisms, minimal recognition of rights to organize, and lastly, for groups that are part of
larger social systems, there must be appropriate coordination among relevant groups (Robert et
al., 2021). Replacing old or current models can provide relief in many aspects of the budget
process. “GFOA found that these principles could be adapted to the local government budget—a
shared financial resource” (Morril, 2021).
Other important things to consider are technology including smartphones and the use of
geographic information systems. “Technology has grown in power and availability over the
years, and with it the ability to provide interactive simulations, which can open the budget
process to the entire community” (Morril, 2021). Complicated situations that occur in the process
of putting together the budget can be more easily overcome by having interactions through social
media or any other means of technology. Geographic information systems also contribute to
improving the local government budget. “GIS could be especially useful for addressing past
equity. For example, visually displaying infrastructure investments by neighborhood can quickly
help decision-makers and the community identify balances” (Morril, 2021).
Implementing new financial foundations in the government can help gain public trust and
support. “Organized into five pillars, the framework provides finance officers with guidance on
ways to improve their governments’ financial positions now and how to create a strong
foundation for a thriving community over the long term” (Morril, 2021). Elinor Ostrom is
responsible for creating this foundational framework that allows governments to succeed
successfully. “Each pillar includes leadership strategies and institutional design principles”
(Morril, 2021). Leadership is an important aspect when it comes to governance. “Leaders can
never lead by themselves; rather, they must convince others to help them achieve their goals”
(Leadership in Local Government, Part 1: What Is Leadership? What Makes an Effective
Leader?, 2021b). In order to achieve this, the government should consider adopting the
recommended foundational framework. The five pillars of financial foundations include:
establishing a long-term vision, building trust and open communication, using collective
decision-making, creating clearer rules, and treating everyone fairly (Morril, 2021).
Thoughts that Add
This week's reading is about the local government and its budgeting process. Although
there are similarities in the overall process of the federal and local budgets, there are many
differences in the preparation process. Understanding the local government budget process is
important because the public can have a lot more influence over it than people realize. Rubin
states, “Because the budget process is such an important part of governance if there is public
participation in and control over the budget, there is likely to be public control over government
more broadly” (Rubin, 2019, pg. 81). There are also many different attributes that are utilized in
planning the budget that can help obtain certain goals. “For example, if elected officials feel the
need to build public trust, then the budgeters can solicit public opinion and demonstrate that
public priorities have been followed and that the programs are well managed and effective”
(Rubin, 2019, pg. 81). The article is precisely about the government gaining public trust. It
emphasizes the importance of community involvement for the public to gain trust, as well as new
mechanisms in an effort to meet that goal. Morril states, “This new approach to budgeting will
not only better serve communities but also increase trust between local governments and their
citizens, which is so necessary in these increasingly uncertain times” (Morril, 2021).
Critique
The main strength of the article was how it emphasized the importance of reevaluating
the local government budget process in order to gain the public’s trust. “A well-functioning
democracy requires citizens’ trust in their governmental institutions. In times of crisis, when
state and local governments need community support to respond effectively, trust becomes even
more critical” (Morril, 2021). Trust is the basis of everything, especially in the government. The
local government cannot keep utilizing the same approaches in preparing their budget because
the lack of trust will continue or worsen. “Without earning that trust, communities cannot
succeed in addressing the impact of the COVID 19 pandemic, economic uncertainty, systemic
racism, increasing severe weather events, and the growing list of other crisis” (Morril, 2021).
Another advantage of this article is the thorough description of the ways that the
government can work on increasing public trust. The article states the advantages of
implementing a new mental model. The suggested mental model is entirely explained and its
advantages as well. The way technology can boost more public involvement is discussed and
how in doing so, the government gains more of the public trust. The article analyzes the use of
geographic information systems that help contribute to the more effective functioning of the
budget process. The focus on equity and the comprehension of how to handle conflict is another
topic that the article goes into detail about. Finally, the article provides a thorough explanation of
the new framework that the local government should consider implementing.
A weakness of the article is the absence of details as to why traditional budgeting is not
as effective as rethinking budgeting. The article provides the basics, vaguely discussing the
consequences of the continuous use of traditional budgeting. For example, the article states,
“Traditional budget processes do not fully incorporate community needs or address past
inequities” (Morril, 2021). There needs to be more detail and more explanation of the approaches
that are taken when utilizing the traditional budget system, which provides many disadvantages.
“The traditional budget process is plagued by a collective action problem that results in overuse
of public resources. This leads to ongoing financial stress” (Government Finance Officers
Association, n.d.). It is important to understand the weaknesses of the traditional budget system
to appreciate the advantages of adopting a rethinking budget system in the local government. A
recent article states, “. . Traditional budgeting should be abolished due to fundamental flaws in
the budgeting process” (Usman et al., 2023).
Effectiveness
This article proved to be effective because it provided significant information about the
positive outcomes that can occur if the local government reinvents its budgetary system. I was
able to better understand the flaws that using a traditional budget system has. In understanding
those flaws, I was able to comprehend the advantages of a rethinking budget system. I was also
surprised to know that the rethinking budget system is already doing its work. The article
effectively discussed in detail the new foundations of the rethinking budget system. The focus of
the article showed that its intention lies in the hope of the public gaining trust in the government,
at least at the local level. The Lord constantly reminds us of the importance of trust in him. If we
do not trust the Lord with all our hearts, then how are we supposed to trust others? Much less,
trust the government Proverbs 3:5-6 talks about the importance of trusting the Lord, and how in
doing so, we can have better trust in others (New International Bible, 1978/2011). Some changes
will take longer to see its positive effects, but I feel it will be worth it. I believe this is a good
article that many government officials should read and consider to gain the trust that has been
lost from the public.
References
Leadership in Local Government, Part 1: What is leadership? What makes an effective leader?
(2021b, January 1). icma.org. https://icma.org/articles/pm-magazine/leadership-local-
government-part-1-what-leadership-what-makes-effective-leader
Morrill, C. (2021). To Increase Trust in Government, Reinvent the Local Government Budget.
State & Local Government Review, 53(1), 10–13. https://www.jstor.org/stable/48636787
New International Bible. (2011). The NIV Bible. https://www.thenivbible.com/Links to an
external site. (Original work published 1978)
Robert, G., Williams, O., Lindenfalk, B., Mendel, P., Davis, L. M., Turner, S., Farmer, C., &
Branch, C. (2021). Applying Elinor Ostrom’s Design Principles to Guide Co-Design in
Health(care) Improvement: A Case Study with Citizens Returning to the Community
from Jail in Los Angeles County. International Journal of Integrated Care, 21(1), 7.
https://doi.org/10.5334/ijic.5569
Rubin, I. S. (2019). The Politics of Public Budgeting (9th ed.). SAGE Publications, Inc. (US).
https://libertyonline.vitalsource.com/books/9781544357836
Simplifying complexity. (n.d.-b). https://www.gfoa.org/materials/simplifying-complexity
Usman, A., Mediaty, Fadilla, A., M., Y., & Herman, N. M. (2023). Sustainable Financial
Transformation: A comparison of beyond budgeting and traditional budgeting approaches
in the context of management accounting. In Faculty of Business & Economics,
Hasanuddin University, Journal of Research in Humanities and Social Science (Vol. 11,
Issue 12, pp. 64–68) [Research Paper]. Quest Journals.
https://www.questjournals.org/jrhss/papers/vol11-issue12/11126468.pdf
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