THE PROBLEM OF GOVERNMENT BUDGETING IMPLEMENTATION IN DEVELOPING COUNTRIES

ABSTRACT

The main purpose of
this research work is to investigate the problem of government budget
implementation in developing countries using Nigeria as a case study.
(1986-2006). To analyse this, an econometric method of multiple regression
model was adopted, data were collected through the secondary source based on
the hypothesis formulated for this study. From the result of the work, i found
that anticipated impact of government budget implementation were raising the
standard of living, reducing inflation, eliminating unemployment, increasing
economic development and growth. The major problems of government budgeting
implementation are inflation, implementation of budget and over ambitious
planning. Against this background, the researcher feels that government should
try to affect straight budget, get implementation and strong disciplinary
action against any government that mismanages the national economy.

TABLE OF CONTENT

Title page   ...................................................................I

Certification  
...............................................................II

Dedication   
.................................................................III

Acknowledgement   .....................................................IV

Abstract  
......................................................................V

Table of content  
........................................................VI

CHAPTER
ONE: INTRODUCTION

1.0.       
Background of the
study.....................................1

1.1           
Statement of the
problem..................................3

1.2           
Objective of the
study.........................................4

1.3           
Research
questions.............................................4

1.4           
Significance of the
study.....................................5

1.5           
Statement of
research.........................................5

1.6           
Scope and limitations of the
study......................6

1.7           
Definition of terms/
concepts..............................7

CHAPTER TWO: LITERATURE REVIEW

2.1. The origin of
budget................................................9

2.2. Review of relevant
theories...................................12

2.2.1. Concept of government
budget..........................12

2.2.2. Goals and objectives of
government budget.......14

2.3. Theoretical
framework..............................................16

2.3.1. Budget
structure....................................................16

2.3.2. Hypothetical table of
government revenue and expenditure..17

2.3.3. Budget cycle............................................................18

2.3.4. Budgetary process in
Nigeria..........................................19

2.3.5. Classification of
budget...................................................24

2.3.6. Classification by object
presentation of expenditures.....27

2.3.7. Classification by
functional presentation of expenditure...28

2.3.8. Types of
budget......................................................29

2.3.9 The problem and prospect
of government budgeting to      

           National development in developing
countries. (a case study of Nigeria
........................................................................34

CHAPTER THREE: RESEARCH METHODOLOGY

3.1. Institutional
consideration and model specification.....40

3.2. Area of study and
coverage......................................40

3.3. Model
specification..................................................41

3.4. Method of data
analysis...........................................43

3.5. Data required and
source.........................................46

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.0. Presentation of
data...................................................47

4.1. Presentation of
regression result...............................47

4.2. Evaluation based on
statistical criteria........................50.

4.3. Evaluation based on
econometric criteria................52

4.4. Evaluation of working
hypothesis.............................52

4.5. Discussion of
findings................................................53

CHAPTER FIVE: SUMMARY OF
FINDINGS, RECOMMENDATION AND

 CONCLUSION

5.1. Summary of
findings...................................................54

5.2.
Conclusion....................................................................55

5.3. Recommendation.........................................................56

Bibliography

Appendix.

                             

CHAPTER
ONE

INTRODUCTION:

1.0
BACKGROUND OF THE STUDY

          A
Budget is commonly understood as the focus by a government of its expenditure
and revenue for a specific period of time. The general budget can be defined as
a government plan for revenue and expenditure for the coming fiscal year.

          According
to Prof. Udabah S I, budgeting has been in operation in Nigeria and indeed
other countries for a fairly long period, to assist in policy making and
planning and also, to provide the basis for controlling income and expenditure.
To him, the major source of anticipated revenue to backup budgetary expenditure
by government is from indirect taxation because of the difficulty in the
assessment and collection of direct tax from taxable individual. The
inefficiency of tax officials and the corruption of some of them make it difficult
for adequate revenue to be realized by government through direct tax.

          Budget
was employed to attain the objective of full employment in the economy, price
stability, raising growth in National output, Balance of payment equilibrium
and equity in income distribution.

The united state of America experienced a budgetary
system which places greater emphasis on the revenue than expenditure. The trend
of development which places more emphasis on revenue was carried over to all
the British colonies. However, in Nigeria, experience was derived from a more
mature British system because, the national system was adopted during the time
of independence between 1957-1960 in spite that Nigeria did not fail to
encounter avoidable problem in the budget.

          Ude M.O. emphasised that government
budgeting emerged out of representative democracy. Originally, in England,
government budgeting was used as the instrument whereby noble compelled the
monarch to be accountable to them for the expenditure of the proceeds from tax
imposed by the monarch on the people later periods of Middle Ages. Fiscal and
economic policy changes by government at times have destabilizing effect on the
entire economy as that of Nigeria should not be disturbed with frequent policy
changes.

1.1
STATEMENT OF THE PROBLEM

          The Nigerian Economy is faced with series of
imbalances in their implementation, despite the availability of the various
source of fund to the government. Several budgets have been designed with sole
purpose of arresting decline growth in the production sector, check
inflationary pressure and correction of Balance of payment deficit and
maintaining a reasonable foreign exchange reserve. However, the important
question that arises is “Why is it that the objectives of government budget have
not been achieved in most developing countries like Nigeria”. This has lead to
an increase in the level of unemployment and equally to a general low level of
standard of living.

          This
project work, therefore, seek to have a look at loopholes that have been
responsible for rendering the budget implementation ineffective, thereby not
achieving the desired objectives. Though an insight into some budget have being
done in the past to generally help in drawing critical analysis of the effect
of budget in the economy.

1.2 OBJECTIVE OF THE STUDY

1.   
To
study the nature of government budgeting basically in Nigeria.

2.   
To
find out why targeted goals have never been achieved in Nigeria.

3.   
To
find out the best revenue allocation formula that is suitable for economic
growth and development.

4.   
To
find out such other factors that is likely to affect budget implementation.

1.3 RESEARCH QUESTIONS

a.    
Why
is it that the objective of budget have not been achieved  in most developing countries such as
Nigeria  

b.   
What
are the causes of poor implementation of budget

c.    
Why
targeted goals of budget have never been met up in Nigeria.

 1.4
SIGNIFICANCE OF THE STUDY

1. The result of the work
will help policy makers in the area of public finance to know how to tackle
some of their problem which has been researched on.

2.It is also indeed
anticipated that this research work will be of immense help to the academic and
others who may find study invaluable source of material for their future
research work.

3. This research will help
to correlate, compare and co-ordinate the financial administration of the
various government departments.

1.5 STATEMENT OF RESEARCH HYPOTHESIS

HYPOTHESIS I

H₀: The problem
of government budget implementation in developing countries has no significant
impact on the economic growth.

H_I: The problem
of government budget implementation in developing countries has a significant
impact on the economic growth.

HYPOTHESIS II

H₀:   There is no significant relationship between
the independent        variable and GDP.

H₁: There is a significant
relationship between the dependent variables and GDP.

1.6 SCOPE AND LIMITATION OF THE STUDIES

To cut down on the
constraint this might be encountered in form of death of data and other related
constraints to a manageable proportion. the scope and the coverage of this
study has been narrowed down, to cover (21years).The study will cover whole of
Nigeria and will be limited to an evaluation of the problem of budgetary
implementation in Nigeria using some target variable to make a generalization such
as government budgeted revenue and government budgeted expenditure for the
period 1986-2006.

           There were constraints such as
sourcing of data and financial constraints sourcing of data from various
government institution such as central bank is not an easy task as these
institutions were not ready to co-operate, carrying-out a study of this nature
need a lot of money and as a student, there is always a problem of inadequate
fund. 

1.7
DEFINITON OF TERMS/ CONCEPTS

PUBLIC
EXPENDITURE: These are
expenditures that government render on some project like roads, hospitals,
street lights, schools, etc.

CAPITAL RECIEPTS:
This refers to loan or grants made to the government. They can be made by other
arms of the government or by international organization.