Book Description

Dominated by multiple, competing, and occasionally overlapping theories, the act of budgeting is by no means a staid, dispiriting task. Kahn, Hildreth and their group of scholars and practitioners show that budgeting is an institutional process, an incremental decision-making tool, and when correctly applied becomes a tribute to managerial and administrative efficiency. Taken together, the chapters provide an unusually coherent conceptual foundation for budgeting as a legitimate field of study, and demonstrate yet again that in its current state the field is truly eclectic but compartmentalized. They also show why it is so difficult to come up with one unified theory of budgeting--and that is one of the book's major benefits. It opens new areas of inquiry that, in the opinion of Khan, Hildreth, and others, will generate renewed interest in probing the field's theory and applications. Understandable and readable for those with limited knowledge of the subject but needing a sufficiently useful grasp of its various issues and problems, the book is both an important reference work for scholars in the field and a practical guide for students of administration, their teachers, and for managers throughout the public sector. ... Read more

Book Description

Kessler provides a detailed case study of Mexican financial policy reform as well as a comparison of financial collapse in other emerging markets. He shows how political challenges can distort the economic liberalization process in developing countries and how those choices undermine the economic stability achieved by genuine reform. ... Read more

Reviews (1)

What makes financial liberalization tough?
This book offers a timely and compelling explanation that will allow the reader to understand why Mexico, a country that became the darling of the international financial community after following orthodox liberalization policies, ended up in 1995 with the most dramatic recession in its modern history and cuased the Tequila Effect, which threatened the stability of the world's financial system.

The author shows how political considerations played a key role in the direction of the liberalization process of Mexico's financial system.The author argues that liberalization led to inconsistent and unsustainable patterns of financial policy, which contributed to Mexico's 1995 deep recession and the consequent bank bailout. The author argues that although market reform has been promoted in developing countries to improve economic efficiency and stimulate growth, in Mexico financial liberalization provided rent-seeking opportunities for privileged groups and increased the states' ability to finance politically inspired obligations.

The book examines four periods: the populist administrations of Presidents Luis Echeverria (1970-1976) and José Lopez Portillo (1976-1982), during which the foundations of modern financial markets were paradoxically laid; the debt-crisis years of Miguel de la Madrid's adminsitration (1982-1988), who reversed his party's political strategy by favoring the business class with financial opportunities; the economic transformation undertaken by Carlos Salinas (1988-1994), who mixed genuine reform with destabilizing anti-market measures; and the political watershed of the Zedillo administration (1994-2000), whose unpopular bank rescue gave opposition parties unprecedented power within Mexico's policy making process.

The author also offers a comparative perspective of financial liberalization in two other emerging markets, South Korea and Russia, which also underwent financial crisis in the late 90s, and examines the political roots of crisis in both countries. By providing a comparative analysis the author derives some lessons from financial liberalization in developing countries. He concludes by suggesting how greater attention to questions of power, social organization, and challenges to state authority can help the policy-making community avoid giving well-meaning advice that is unlikely to be implemented in a sustainable way.

The book should be read by those interested in development and economic policy reform as well as those following policy making processes.This book is certainly a contribution to understanding a period of profound changes in Mexico's history and its process of economic reforms. ... Read more

Book Description

Everything You Need to Streamline Agency Costs and Expenditures

You've heard about the enormous savings potential of Activity-Based Cost Management (ABC/M) - now it's time to put this powerful system to work in your organization. Get started today with the advice and strategies you'll find in Management Concepts' newest book, Activity-Based Cost Management in Government.

This 400+ page book guides you through every phase of activity-based accounting: from setting up a basic system through its organizational implementation. In one concise resource, you now have everything you need to streamline all aspects of your organization's costs and expenditures.

Written in easy-to-understand language and clearly illustrated, Gary Cokins' Activity-Based Cost Management in Government provides the financial techniques to:

-Determine the true and actual costs of services and cost rates
-Implement process improvements departmentally and organization-wide
-Evaluate the pros and cons of outsourcing and privatization decisions versus internal delivery
-Align financial and budgetary activities to the organization's mission and strategic plan ... Read more

Reviews (10)

The leading resource in the ABC/ABM field
Gary Cokins does an excellent job explaining Activity Based Costing and Activity Based Management from beginning to end. By reading the first chapter alone, one can tell he is an expert in his field. He begins explaining the subject matter with the basics and continues through using an easy to follow logic. For public sector organizations that are considering ABC/M, or already using it, this book is a master guide for its methodology. It has very helpful charts which the author uses in his explanation of the material, making it easy for the reader to follow.

I have spent over 30 years in government, and the one aspect always apparent is that the government is always trying to improve performance with fewer resources, and therefore recognizes the need for activity based costing. This book is, by far, the leading reference to refer to for guidance on how to implement ABC/M. The reader does not have to be a cost accountant to comprehend the methodology or technique used to implement ABC/M. The author cites actual cases in the public sector where federal or local agencies have implemented this technique and the successes made. He begins with the issue or problem and cites the solution, the model structure used, the results, and the lessons learned. These actual case examples help show how ABC/M can resolve problems in the real world.

Overall, I found this book to be an excellent resource in its field, as it is easily understood, yet comprehensive. I strongly recommend it to any government manager that wants to help their organization excel.

A MUST HAVE
I have an earlier book written by this author entitled, "Activity-based Cost Management, Making It Work" that was written during earlier days of implementing activity-based costing. Cokins' new book, while it addresses activity-based functionality for government, also presents some "matured" thinking and advice on ABC/M which I found to be extremely helpful in validating some of my own observations and learnings from implementing ABC/M. For a newcomer to ABC/M, the book presents the case for why government entities can profit from using ABC/M, how to get an implementation going, critical factors for success and some case studies of actual government implementations. But, it also gets into more advanced applications such as using ABC/M to support performance measurement, supply chain management, and budgeting. These chapters are not as easily digested, but they are a rich source of reference for those planning to broaden the use of activity-based cost/management.

COST MANAGEMENT IN GOVERNMENT
Activity based cost management is increasingly taking hold in government and is helping many organizations make dramatic improvements in their understanding of costs. Gary Cokins, a widely respected cost management craftsman and teacher, has made an outstanding contribution to the advancement cost management in his book "Activity-Based Cost Management in Government." He does a great job covering a wide range cost topics in a clear and coherent manner; and he consistently reinforces - through relevant concepts, examples and quotations - the pragmatic value of cost information to support fact based decision making.

Very Informative
Gary's book sheds light on a subject that I have heard a great deal about but had no practical experience in. The use of ABC/M tools and techniques is growing rapidly in the federal government. This book is an essential primer for managers within the Federal government as well as government consultants. I particularly enjoyed reading about the example projects in Chapter 18.

Finally an ABC book that addresses both Why and How
I have read most of the ABC books published since the topic first surfaced in the mid-1980s. Some books have covered how to build ABC models in detail, providing a wealth of direction as a guide book to implementation. Others have dwelled on the theory of strategic cost measurement and management, backing up their obsevations with case studies in a variety of industries. Gary has tackled the most difficult of application areas in his new book, that of government and public sector.
Reading through this book will build a sound knowledge of why a government organization should implement ABC, how to go about it, and how to avoid the problems that pioneering government organizations have already discovered and learned to avoid.
After gaining that understanding,you will use this book as a reference for how to address model building issues and questions, how to answer the questions and biases of managers and executives who must understand ABC to have it affect their decision making, and how to build onto what is learned in your organization from ABC to implement performance measurment and improvement. Performance improvement is what these system exist to support, and ABC concepts and systems work well to integrate scorecard, process reengineering, continuous improvement, and other managment tools and decision support systems that are all to often implemented independently. That is the viewpoint that Gary has used to guide this book.
Gary's book is one that I pick up to get a trusted viewpoint when I have an difficult issue to address implementing ABC and performance measurement. ... Read more

Book Description

This is a wide-ranging survey of the theory and evidence on public goods. Its four parts present the main literature on public goods, both theoretical and empirical, in a systematic manner. Moreover, the authors extend the existing literature in numerous ways. Each section of the book includes a discussion of the main results, emphasizing the innovations and new outcomes. The main strength of the book is the breadth and depth of its coverage. The organization of topics covered by the book follows the recent literature and the presentation is written for a broad audience. Where technical material is presented, it is done in a way that is generally well explained and easy to follow. The book is thus suitable as a textbook for graduate and upper level undergraduate public finance courses as well as for researchers interested in the field. ... Read more

Book Description

How can a municipal investment pool, which is supposed to be safe, lose billions of dollars? What are derivatives and how did they contribute to this tragedy?
In December 1994, Orange County became the largest municipality in U.S. history to become bankrupt. By borrowing heavily and placing the wrong bets, Orange County Treasurer Robert Citron lost $1.7 billion of Orange County's $7.4 billion investment portfolio.
Big Bets Gone Bad: Derivatives and Bankruptcy in Orange County is the first detailed description of the Orange County bankruptcy. Author Philippe Jorion, the only professor in Orange County who teaches and researches derivatives, is uniquely placed to understand the technical details of the portfolio and climate in the Orange County municipal government that encouraged the decisions that led to the bankruptcy.
Big Bets Gone Bad provides an introduction to the U.S. bond market and details Federal Reserve Chairman Greenspan's efforts to tighten credit. Its description of the $35 trillion derivatives market makes the losses of Barings Bank, Kashima Oil, West Virginia, and Metallgesellschaft more understandable. Big Bets Gone Bad explains what everyone should know about tax monies and public investments. Because nobody likes to lose $1.7 billion. ... Read more

Reviews (4)

Risk Management, emphasis on management
Jorion gives a good text book account of the Orange County debacle, concluding that this was a gross but purely human error, and not a failure of the financial system or the derivatives market.

The first part of the book introduces the problem quickly then proceeds to give the reader a crash course in risk management theory, explaining among other things the concept of Value-at-Risk (VaR). Many types of derivatives are described and their proper use explained. We are given a manager's working knowlege of finance.

Jorion then moves to the Orange County debacle proper and his conclusion is frighteningly simple: the financial managers of Orange County, entrusted with billions, did not know what they were doing. They were ignorant of what we learned in the first few chapters. They were amateur money managers playing roulette.

The book is still topical. The Basel II banking agreements mandate strict capital reserve requirements for a variety of risks, such as market and liquidity risk, so that understanding the concept of VaR is more important than ever. Most importantly however, Basel II requires preparation and reserves for operation risk, which most often has to do with the people side of finance rather than the mathematical vality of the models used. Jorion's book is thus also a good introduction to the human side of risk.

Excellent explanation.
This book tells the story of a 1.4 billion$ financial loss by the Orange County municipality.
The author explains very clearly what happened.
The municipality, through its treasurer, speculated that interest rates would stay the same or fall. Into the bargain, he leveraged his position with a factor 3. The means for the speculation were repos on bonds.

When the interest rates went through the roof (from 5,25% to 8% = + 52%), the value of the collateral (the bonds) for his position fell (with a factor 3). He got a margin call, but couldn't pay it. The biggest part of the investment (held by FBCS) was liquidated with a phenomenal loss. Only Merrill Lynch didn't cover their position.

The author gives excellent explanations on some very specialized investments like reverse floaters and other high tech financial operations of which the value can only calculated by partial integrals.

Food for investment bankers.

Interesting and informative read
Readable account of the Orange County financial blow-up. Particularly interesting is the description of Robert Citron, the hapless college dropout who controlled billions of dollars of public money. Also fascinating are the prescient comments of the obscure accountant who ran against unbeatable Citron in the election prior to the disaster. Jorion manages to educate the reader, in a very painless way, about the institutions of the bond market (such as repos).

On the minus side, the book is not particularly well documented (in terms of, for example, the graphs and the sources of the data) and some chapters seem suspiciously like lecture notes, hastily adapted to a book format. Still, an enjoyable trip to the dark side of financial market.

Profiteering without Prudence or Oversight
Jorion should be commended for his insightful, first-class treatment of this history making event. Big Bets... is a fast, fluid read that is devoid of technical terms and is written in an active, conversational and explanatory voice that the typical layman can readily understand. In this book, which reads more like gripping fiction, we are treated to an excellent character sketch of the key culprit in the Orange county financial fiasco, Robert L. Citron, his rise to power, the environment he worked in, the exotic financial tools he carelessly wielded, an unforgettable cast of financial hucksters and ill-advised power wielding greedy misfits, and the ultimate downfall of the Orange county financial safety net and its after-effects.

From this book, we learn that Robert L. Citron was head of a large portfolio, had no oversight, and an inflated ego. His superiors and fellow investment participants (such as the county school district) knew full well what he was doing, but allowed him to continue unsupervised because of his past stellar performance- much of which was due to pure luck and favorable market conditions. We also learn that Citron, much like Nicholas Leeson, the orchestrator of the fall of Barings, was a financial neophyte. While on the one hand believing that he was fully invested in bonds, Citron had taken a heavily leveraged position in very exotic derivative securities, proving to Jorion's point that he really did not have a clue as to what he was doing.

We also learn that Citron (nor the people above him and his investment participants), who had no real background in finance, did not know the difference between market price and face value, nor did he know the difference between an option on an asset and the outright ownership of an asset. Based on one very bad bet on the movement of interest rates, Citron fully invested Orange County's finances in derivative securities that he did not understand at all, and compounded the problem by leveraging his position (basically using a little money to borrow a lot of money) to the extreme.

After reading this book, those of us who believe that our investments, from the retirement funds managed for us by fund advisors and our places of work to our bank accounts and our kids' education funds, are safe should have our heads examined. People such as Citron were not financial gurus, that is certain, but as the more recent derivative led failures at hedge fund Long Term Capital Management (which included the two Nobel laureates who literally wrote the book on derivative pricing on its stellar team of rocket scientists) and Bank of America demonstrate, no one is truly safe. ... Read more

Book Description

The global market for inflation-indexed securities has ballooned in recent years, and this trend is set to continue. This book examines the rationale behind issuance and investment decisions, and details the issues facing anyone who designs indexed securities, illustrating them wherever possible with actual examples from the international capital markets. In particular, an extensive review of indexed debt markets throughout the world is provided - including for the first time, a comprehensive and consistent set of cash flow and price-yield equations for the instruments already in existence in the major bond markets - forming an important reference for those already experienced in the field, as well as practitioners and academics approaching the subject for the first time.

The book also provides unique insight into the development of inflation-indexed derivative products, and the analytical tools required to value such instruments.
... Read more

Reviews (1)

Great overview on Inflation based products
wow, incredible improvement to the first edition. coverage of all important aspects (i can think of) on inflation. history, example issues, purpose of use from investor & issuer as well as technical points regarding calculation and pricings. ... Read more

Book Description

Despite the increasing trend towards deregulation, the public regulation of private activities remains a common phenomenon in industrialized countries. However, it is frequently claimed that slow and costly regulatory licensing procedures impede economic growth. This book investigates the strategic and adaptive interaction between citizen-applicants and administrators in regulatory licensing bodies, and studies the effects of policies to accelerate and simplify these processes.

Based on a variation and extension of the enforcement game, the author demonstrates that amendments to procedural rules which aim to speed-up and improve licensing procedures may have the effect of reducing social welfare. He illustrates that the failure of a policy to increase the number of applications implies a failure to increase the number of licenses granted. This in turn causes a reduction of social welfare. Importantly, he shows that the reverse implications are not true and that despite an increase in the number of applications or licenses granted, social welfare may still decline. Therefore, he argues that any evaluation of procedural reforms on purely theoretical grounds is impossible. Only the measurement of real improvements in social welfare will verify the success of a policy. To establish failure, however, it is simply necessary to observe a decrease in the number of applications or licenses granted.

This book is a rare combination of game theoretic modeling and microeconomic analysis on the effects of variations in the procedural rules of licensing. The conclusions drawn will interest and inform a wide variety of academics and researchers working in the fields of law and economics, regulation, administrative law and game theory. ... Read more

Book Description

Originally, economics was called political economy, and those studying it readily accepted that economic decisions are made in a political world. But economics eventually separated itself from politics to pursue rigorous methods of analyzing individual behavior and markets. Recently, an increasing number of economists have turned their attention to the old question of how politics shape economic outcomes. To date, however, this growing literature has lacked a cogent organization and a unified approach. Here, in the first full-length examination of how political forces affect economic policy decisions, Allan Drazen provides a systematic treatment, organizing the increasingly influential "new political economy" as a more established field at the highly productive intersection of economics and political science.

Although he provides an extraordinarily helpful guide to the recent explosion of papers on political economy in macroeconomics, Drazen moves far beyond survey, giving definition and structure to the field. He proposes that conflict or heterogeneity of interests should be the field's essential organizing principle, because political questions arise only when people disagree over which economic policies should be enacted or how economic costs and benefits should be distributed. Further, he illustrates how heterogeneity of interests is crucial in every part of political economy. Drazen's approach allows innovative treatment--using rigorous economic models--of public goods and finance, economic growth, the open economy, economic transition, political business cycles, and all of the traditional topics of macroeconomics.

This major text will have an enormous impact on students and professionals in political science as well as economics, redefining how decision makers on several continents think about the full range of macroeconomic issues and informing the approaches of the next generation of economists. ... Read more

Reviews (2)

A must in any economist's library
Numerous issues concerning conflict of interest and strategic behavior are involved in political matters and economic policy decisions in particular, and in macroeconomic outcomes in general. Allan Drazen presents the most complete analysis of the literature concerning these issues, both from a theoretical and an empirical perspective. I think this book is the Blanchard and Fischer's of Political Economy. Superb.

Political Economy in Macroeconomics
Though politics and economics continue to be the two most influential forces in our society, the discussion relating the two is often lofty and incomprehensible to common men. Drazen eases the burden of confusion by providing distinct discussion and wonderfully elaborated points of concern. A great tool for understanding politicla economy. ... Read more

Book Description

An initial public offering (IPO) is one of the most significant events in corporate life. It follows months, even years of preparation. During the boom years of the late 1990s bull market, IPOs of growth companies captured the imagination and pocketbooks of investors like never before.

This book goes behind the scenes to examine the process of an offering from the decision to go public to the procedures of a subsequent equity offering. The book is written from the perspective of an experienced investment banker describing the hows and whys of IPOs and subsequent equity issues.

Each aspect of an IPO is illustrated with plenty of international examples pitched alongside relevant academic research to offer a combination of theoretical rigour and practical application.

Topics covered are:

Book Description

Between 1996 and 2002, the Trust for Public Land helped communities design and pass ballot measures that raised more than $28 billion to fund parks and open space across the country. With growth and sprawl rapidly overtaking their open lands, communities are voting in record numbers to put money aside for conservation. Voters are coming to recognize the interrelationship between conserved land, a safe environment, a strong economy, and a livable community. Well-designed finance measures that reflect the unique conservation needs and funding capacities of their communities have a much better chance of passing.

Writer Kim Hopper and the Trust for Public Land’s team of conservation finance experts have put together a soup-to-nuts handbook on park and conservation funding. Designed for community leaders and involved citizens, local government officials and conservation professionals, this how-to guide explains the complex process of securing federal, state, and private conservation funds and—most importantly—researching, designing, and passing a local, voter-approved conservation finance measure. This book covers a range of campaign issues, from fundraising to field organizing to legal considerations. ... Read more

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Book Description

Reviews (1)

Real-time Budgeting View
Those of you who read Aaron Wildavsky's (1979) "Politics of the Budgetary Process" know the big debate over public budgeting between those who believe public budgeting process is politically incremental and, therefore, who focus mainly on the individual actors and their strategies, and those who propose a more comprehensive and global outlook that focus on dynamics in the larger environment, which subsequently affect and shape how individual actors behave and respond to episodes.

Rather than approaching public budgeting from the narrow perspective of incremental view of public budgeting, which sees budgeting as negotiations among a group of routine actors, bureaucrats, budget officials, chief executives, and legislators, who meet each year and bargain to resolution, in "The Politics of Public Budgeting" Rubin (2000) develops what she calls "real-time budgeting" perspective, which refers to the continual adjustment of decisions in each stream to decisions and information coming from other streams and from the environment. Streams include:

The Revenue Cluster: Revenue decisions include technical estimates of how much income will be available for the following year, assuming no change in the tax structures, and policy decisions about changes in the level or type of taxation. Will taxes be raised or lowered? Will tax breaks be granted, and if so, to whom, for what purpose. Which tax sources will be emphasized, which de-emphasized, with what effect on regions and economic classes, or on age groups?

The Budget Process Cluster: The process cluster concerns how to make budget decisions. Who should participate in the budget deliberations? How influential should interest groups be? How much power should the legislature have? How should the work be divided, and when should particular decisions be made?

The Expenditure Cluster: The expenditure cluster involves some technical estimates of likely expenditures such as for grants that are dependent on formulas and benefit programs whose costs depend on the level of unemployment. Policy relevant expenditure questions involve which programs will be funded at what level, who will benefit from public programs and who will not, and similar questions.

The Balance Cluster: The Balance cluster concerns the basic budgetary question of whether the budget has to be balanced each year with each year's revenues, or whether borrowing is allowed to balance the budget, and if so, how much, for how long, and for what purposes.

Budget Implementation Cluster: Budget implementation cluster concerns the basic budgetary questions of how close actual expenditures should be to the ones planned in the budget, how one can justify variation from the budget plan, and the budget can be remade after it is approved during the budget year.

According to Rubin (2000), "budget outcomes are not solely the result of budget actors negotiating with one another in a free-for-all; outcomes depend on the environment, and on the budget process as well as individual strategies". "Individual strategies have to be framed in a broader context than simply perceived self-interest" (p. 33). What happens in the clusters consequentially is affected by the global environment of public budgeting and the perceptions and strategies of individual budget actors are adjusted accordingly. The clusters model of Rubin (2000) reminisces the "policy environments framework" (developed by Nakamura and Smallwood [1980]) that views public policy process as a simultaneously interaction among individual actors, elements of importance and arenas of power in three policy environments (policy formation, policy implementation and policy evaluation environments) with each environment having influence on the other ones with the help of communication linkages that let each actor in one environment the opportunity to send message to the others in the other environments. In Rubin's real-time budgeting view, each cluster is imbued with different questions and each cluster attracts a different characteristic set of actors and generates its typical pattern of politics (p. 27) and what happens in each cluster is influenced by the episodes in the larger policy environment.

Based on the real-time view of public budgeting, Rubin (2000) organizes her book into nine major chapters, with each chapter explaining the clusters in detail and supporting arguments with didactic short case studies. In general, the book provides the reader with a dynamic and rich description of budgeting process in public sector.

Having reviewed public budgeting process, Rubin (2000) recommends that a balance of power should be established and maintained between the executive and the legislature, so one can catch the other at bad practice-a recommendation running contrary to the argument that to solve federal budget deficit problem either the executive or the legislature has to be empowered.

Overall, Rubin's book is a well-written, clear, and descriptive account of public budgeting process, and, so entertaining and engaging that create a sense in the reader that s/he should read more about the subject to better comprehend the complexity and dynamism of public budgeting. I recommend "The Politics of Public Budgeting" as a powerful text to those who are interested in the subject. Also recommended are "Politics of the Budgetary Process" by Aaron Wildavsky (1979), "Public Budgeting Systems" by Robert D. Lee and Ronald W. Johnson (1998), "Public Budgeting in America" by Thomas D. Lynch (1995), and "The Federal Budget: Politics, Policy, Process" by Allen Schick (2000). ... Read more

Book Description

Using Conflict in Organizations challenges the common assumption that conflict in groups and organizations is detrimental to performance. It offers an alternative perspective by presenting the scarce but accumulating knowledge on how conflict can enhance individual achievement, the quality of group decision making, and the productivity in organizations. Part one of the book provides a general framework that explicitly links conflict to performance and from which this relationship can be understood. The second and third parts build on and illustrate this framework in a series of thematic chapters. Part two focuses on performance and intragroup conflict, covering topical areas such as dissent, groupthink, and strategic decision making. Part three deals with the performance-enhancing effects of intergroup conflict and addresses issues such as collective negotiation and diversity management. The final section of the book focuses on applications and intervention strategies that can stimulate conflict in ways that will enhance performance in groups and organizations. Offering a new perspective on conflict in groups and organizations, based on fundamental and field research, Using Conflict in Organizations will be required reading for academics, advanced students, and practitioners in management, organizational behavior, and organizational psychology. ... Read more

Book Description

The fifth edition of this essential guide was created for both novice grantseekers who need instruction on how to begin the process and seasoned grantseekers who want to learn new techniques to save time and increase success. Revisions and additions reflect the enormous changes and challenges that have occurred in the grants marketplace since the fourth edition was published in 1999. ... Read more