ANALYTICAL TOOLS AND DECISION RULES: CREDIT BUDGETING AND TAX EXPENDITURES
McClarin, Elizabeth Anne
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Numerous reforms have improved the supply and quality of federal financial, budget, and performance information. Debate persists, however, about the value of information and how to best use it to improve decisions and outcomes. To make information more powerful, some reforms move beyond enriching information to using it as the basis of decision rules that dictate or constrain decisions, actions, or outcomes. A motivation behind decision rules is the concern that information alone does not suffice, but decision rules raise fresh challenges and disagreements. The dissertation’s case studies examine the emergence and evolution of federal budget decision rules. The first case – the Federal Credit Reform Act of 1990 (FCRA) - examines a budget decision rule that has been sustained for almost three decades. The second case - budgeting for tax expenditures – examines reforms that resulted in more analytical information but stopped short of a tax expenditure specific budget decision rule. In both cases, concerns emerged decades ago about a lack of budget oversight and control; analytical tools were improved; and budget decision rules were proposed. By juxtaposing a “successful” reform (i.e., enacted and sustained) and an “unsuccessful” reform (i.e. non-enacted) the dissertation examines the factors and conditions influencing whether analytical information is reformatted into a workable and sustained budget decision rule. The case study experiences suggest a cautioned approach to the establishment of federal budget decision rules with a first principle of avoiding overloading the budget and budget processes, especially when existing budget processes are not fully functioning. While sound budget principles and technical expertise help shape budget decision rules, the quest for analytical improvement must be balanced with political, institutional, and implementational realities. The case studies indicate that analytical tools and budget decision rules matter, but that those seeking to establish new budget decision rules should consider the fragile role they play, and avoid overpromising benefits and underestimating the need for careful design and continued oversight and refinement.