Public Sector Governance and Accountability Series: Budgeting and ...

200 Paul Boothe
focuses on the accounting treatment of capital, we call this regime cash accounting.
We call the regime in which capital is not expensed and depreciation is charged
accrual accounting. This regime corresponds to what accountants sometimes call
full accrual.
5. For example, von Hagen, Hallett, and Strauch (2002) show that fiscal consolidations
based on expenditure reductions are more likely to succeed than those based on
revenue increases. This finding is confirmed for Canada in Boothe and Reid (2001).
6. Proponents include Blanchard and Giavazzi (2003); Brunila, Buti, and Franco
(2001); Buti, Eijffinger, and Franco (2002); Dur, Peletier, and Swank (1997); Robinson
(1999); and Salinas (2002).
7. Skeptics include Tanzi (2003) and Wynne (2003). Diamond (2002) is cautious in
recommending the change to developing countries, which may not have the systems
in place to support accrual accounting.
8. As before, this could be easily thought of as a debt-to-gross domestic product rule.
References
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Athukorala, S. Lakhsman, and Barry Reid. 2003. Accrual Budgeting and Accounting in Government
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Balassone, Fabrizio, and Daniele Franco. 2001. “The SGP and the ‘Golden Rule.’” In The
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Brunila, Marco Buti, and Daniele Franco, 371–93. Basingstoke, U.K.: Palgrave.
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Developments.” OECD Journal on Budgeting 3 (1): 43–60.
Boothe, Paul. 2004. “Accounting Regimes and Fiscal Rules.” In Public Debt, ed. Danielle
Franco, 315–32. Rome: Banca d’Italia.
Boothe, Paul, and Bradford Reid, eds. 2001. Deficit Reduction in the Far West. Edmonton:
University of Alberta Press.
Brunila, Anne, Marco Buti, and Daniele Franco, eds. 2001. The Stability and Growth Pact:
The Architecture of Fiscal Policy in the EMU. Basingstoke, U.K.: Palgrave.
Buti, Marco, Sylvester Eijffinger, and Daniele Franco. 2002. “Revisiting the Stability and
Growth Pact: Grand Design or Internal Adjustment?”CEPR Discussion Paper 3692,
Centre for Economic Policy Research, London.
Diamond, Jack. 2002. “Performance Budgeting—Is Accrual Accounting Required?” IMF
Working Paper 02/240, International Monetary Fund, Washington, DC.