What is it about?
Unauthorised extra-budgetary expenditures continue to pose threats to achieving and sustaining fiscal stability. It has resulted in budget overruns which have contributed to the rapid growth in government spending and borrowing pushing countries down toward an unsustainable economic path. It is against these that this paper sought to critically review unauthorised extra-budgetary expenditure, antecedents, and consequences. The paper applied fraud triangle theory (FTT) to conceptualise antecedents of unauthorised extra-budgetary expenditure. Three factors have been identified as antecedents of extrabudgetary expenditures through a critical analysis of the fraud triangle theory. These are budgetary system failure, political economy, and community of economy. The paper sought papers from Google scholar, Google, and Scopus databases. Scopus database was used to conduct bibliometric analysis using the “Biblioshiny” function in the “bibliometrix” package subsequent to the development of the theoretical framework and manual search from Google and Google scholar to determine the depth of empirical studies on the subject. The paper proposed three propositions and a theoretical framework to guide future research. It was also revealed that unauthorised extra-budgetary expenditure limits the success of fiscal consolidation. It is also deleterious to budgetary gains and savings and will adversely affect the health of economies. It also pushes an economy toward a distressing economic path through high public debts to finance such expenditures.
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Why is it important?
This paper identifies and conceptualises antecedents of unauthorised extra-budgetary expenditures. These are budgetary system failure, political economy, and community of economy. These antecedents present the foundation for policy intervention in dealing with the negative consequences of unauthorised extra-budgetary expenditures.
Perspectives
Globally, Governments are constrained with resources in meeting developmental needs. The few resources are often misapplied through budget overruns or unauthorised extra-budgetary expenditures. This paper presents a framework for policymakers to integrate budgetary systemic failure, political economy, and community of economy into the policy framework to curtail unauthorised extra-budgetary spending. The paper provides that without government commitment to reforms in addressing weaknesses in the budgetary system, interventions to resist the political pressure, and redefining the community of economy, extra-budgetary spending (illegal or authorised) would not only persist but also continue to escalate in growth. Finally, evidence from this paper implies that to sustain fiscal consolidation gains, efficient and effective control of budgetary fundamentals is required.
Dr Yaw Ndori Queku
Cape Coast Technical University
Read the Original
This page is a summary of: A Critical Review of Antecedents of Unauthorised Extra-Budgetary Expenditure: Application of Fraud Triangle Theory, African Journal of Business and Economic Research, December 2022, Adonis and Abbey Publishers,
DOI: 10.31920/1750-4562/2022/v17n4a14.
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