I.

INTRODUTION

Public Fiscal Administration fiscal administration generally refers to the process/es

involved in the revenue generation, allocation, and expenditures of the government.
Public finance belongs to the branch of economics but that was during the earlier times.
With the emergence of the field of public administration, much interest has been directed
towards fiscal administration. Again, this subfield of public administration covers a wide
range of issues and topics affecting government operations like taxation, public
expenditures and borrowing, resource allocation, revenue administration, auditing and
intergovernmental relations. As Briones (1996) puts it, “public fiscal administration
embraces the formulation, implementation, and evaluation of policies and decisions on
taxation and revenue administration; resource allocation, budgeting, and public
expenditure; public borrowing and debt management; and accounting and auditing.”
Through the years, many researches were devoted on these topics and issues; the
government has also introduced reforms like reforms in tax administration, value added
tax (VAT), expanded value added tax (E-VAT), procurement reforms, the medium-term
expenditure framework (MTEF), accounting reforms, re-engineering the bureaucracy
program (REBP), transforming local finance, and many others.

Fiscal administration is the act of managing incoming and outgoing monetary transactions
and budgets for governments, educational institutions, non-profit organizations, and other
public service entities. Each division or department carries responsibility for different
aspects such as budgeting, reporting, collecting revenues in the form of fees and taxes
or purchasing.

Fiscal policy refers to the "measures employed by governments to stabilize the economy,
specifically by manipulating the levels and allocations of taxes and government
expenditures

Fiscal policies are tools for the development of fiscal planning budgets, based on the
receipt of anticipated funding. As fund disbursement in the form of payroll, purchases, or
other expenses occur, management reports appropriate accounting information back to
organizational leaders. Historical data, future revenue projections, and current
budget demands determine needed adjustments. The entire process forms the basis for
future fiscal decision making.
.
Leaders of government, nonprofits, and other public service entities have
a fiduciary responsibility to those who put them in office, individuals better known as
constituents. Effectively managing the fiscal administration of an entity contributes to its
overall financial health and ability to continue serving constituents. As such, laws dictate
much of the particulars with regard to preparing financial statements, recording
transactions, and balancing budgetary demands for such organizations. Fiduciary
responsibility dictates that these reports demonstrate responsible management and
recording of all activities involving monies paid to or spent by the organization.
POLITICS AND FISCAL ADMINISTRATION

A. Fiscal Administration and the General Welfare

Fiscal administration derives its substance and meaning from the concept of general
welfare. For developing countries embarking on a development process, the term
“general welfare” essentially means the welfare of the avowed beneficiaries of
development, the poor.
B. Relationship
Fiscal administration does not operate in vacuum. The formulation and execution of fiscal
policies have to content with the role politics plays in process. The relationship between
fiscal administration and politics is a dynamic interchange of effects and causes. This is
because fiscal administration is done with a political system.
C. A Model
There is no known model of the politics-fiscal administration relationship which can
appropriately be used for purposes of discussing the politics of fiscal administration of
developing countries. Most of the paradigm used are substantially Western. With this
limited literature on fiscal administration for developing countries, it is fortunate that no
explicit model has evolved for fruitful usage.
To understand how the system, some assumptions have to be set.
1. It is assumed that the purpose of fiscal administration is to realize desired objectives
through fiscal policies.
2. Recognize which is obvious: the formulation and execution of such fiscal policies are
done within a political context.
3. Politicalization of fiscal policies is done. This means that there are actors of the process.
4. Process takes place within a system which governs how the process works and how
the actors behave.
5. The system is governed by an ideology which represents a composite of the economic,
political and social values of society.

Due to the influence of political factors on the fiscal process, fiscal policies are often
altered on both intentions and substance, that resulting the fiscal policy may not
effectively address the economic objectives for which it was originally conceived.

We have to identify the constraints of fiscal administration which prevent it from producing
fiscal policies more in consonance with the welfare of its intended beneficiaries, the poor.
Explore the possibility of changes or reforms that can make the relationship more
responsive to development objectives and needs. Determine the alternatives to the
process and how these options can be instituted.

II. The System

The relationship between politics and fiscal administration can be understood with the
following system:
1. The process, made up of the existing institutions (political or non-political) serve as
mechanisms whereby individual preferences and views are expressed, deliberated upon
and translated into the winning combination of issues.
2. The interest groups (formal or informal) which determine the issues and preferences
raised and their strategies of presentation, the conversion of the winning combination or
set of preferences into fiscal decisions, and the extent of implementation of decisions.
3. The ideology or the structure of the distribution of power in a developing country.

Fiscal policies are the outputs of the interactions between politics and fiscal
administration.

A. Process
The whole range of individual preferences affecting budgetary decisions such as:
1. Size of the budget
2. How much benefits should be allocated
3. How much cost should bear

1. Voting

There are two levels of decisions making.

1. Small number situations like in a village meeting or in the legislature where a relatively
small number of actors are involved.
2. Large number situation as in national election where there are almost an unlimited
number of political actors and the range of issues considered is so complex and broad.

2. Vote Maximization

This theory was developed by Schumpeter and Downs. It assumes that political action is
rational such that both politician and individual voters act in their own self-interest. The
politician desires to maximize votes to win an election or stay in power.

Voters will cast their votes in favor of those who best represent their preferences and
interest while politician will offer programs and support legislation which promote the
interest of the voters.