Do Expiring Budgets Lead to Wasteful Year-End Spending? Evidence from Federal Procurement

Jeffrey Liebman () and Neale Mahoney

No 19481, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Many organizations have budgets that expire at the end of the fiscal year and may face incentives to rush to spend resources on low quality projects at year’s end. We test these predictions using data on procurement spending by the U.S. federal government. Spending in the last week of the year is 4.9 times higher than the rest-of-the-year weekly average, and year-end information technology projects have substantially lower quality ratings. We also analyze the gains from allowing agencies to roll over unused funds into the next fiscal year.

JEL-codes: H0 H5 H56 H57 H61 L0 L2 L24 (search for similar items in EconPapers)
Date: 2013-09
New Economics Papers: this item is included in nep-ppm
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Published as Jeffrey B. Liebman & Neale Mahoney, 2017. "Do Expiring Budgets Lead to Wasteful Year-End Spending? Evidence from Federal Procurement," American Economic Review, vol 107(11), pages 3510-3549.

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Working Paper: Do Expiring Budgets Lead to Wasteful Year-End Spending? Evidence from Federal Procurement (2013)
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