Biased Budgeting in the Public Sector: Evidence from Italian Local Governments

Eugenio Anessi Pessina, Mariafrancesca Sicilia, Maria Francesca Sicilia

Risultato della ricerca: Contributo in rivistaArticolo in rivistapeer review

16 Citazioni (Scopus)


The purpose of this paper is to analyse, in terms of presence, determinants and purposes, the misrepresentation of expected revenues during budget formulation and the misrepresentation of actual revenues during budget execution. To this end, we use six- year panel data from Italian municipalities with populations above 15,000. Our results suggest that overestimations of current revenues are more frequent than underestimations, during both budget formulation and budget execution. In terms of determinants, our results highlight the impact on revenue misrepresentation of both political orientation and fiscal stress. Finally, in terms of purposes, we show that revenue underestimation during budget formulation and revenue overestimation during budget execution may contribute to the formation of surpluses. The former, in particular, may allow mayors to create a ‘war chest’ in non-election years, which can then be used to increase net borrowing on the eve of elections.
Lingua originaleEnglish
pagine (da-a)819-840
Numero di pagine22
RivistaLocal Government Studies
Stato di pubblicazionePubblicato - 2015


  • bilancio di previsione
  • budgeting
  • earnings management
  • enti locali
  • local governments
  • politiche di bilancio


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