 Putting it off for laterEdinburgh School of Economics Discussion Paper Series from Edinburgh School of Economics, University of Edinburgh Abstract: Many government departments around the world exhibit heightened end of scal year spending. The UK and Northern Ireland governments are no exception spending around 1.91 and 3.06 times more on capital in the final month of the fiscal year than the average month. These spending spikes present a problem for policy makers due to their tendency to result in lower quality spending. A model is presented with procrastination as the driver of heightened end of year spending. Departmental performance is measured on a fiscal year basis and hence there is an incentive to delay spending effort in spending money until later in the fiscal year. A new technique of time variant budgetary taxes are suggested for disincentivising heightened end of year spending and increasing spending efficiency. The model is calibrated to Northern Ireland government spending data with the finding that time variant budgetary taxes can improve the value of government spending by more than 10%. Keywords: Government spending; fiscal year distortions (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:edn:esedps:260 Access Statistics for this paper More papers in Edinburgh School of Economics Discussion Paper Series from Edinburgh School of Economics, University of Edinburgh 31 Buccleuch Place, EH8 9JT, Edinburgh. Contact information at EDIRC. |
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