Budget reforms in times of austerity: A centralization cas-cade in Danish central government?

In the literature times of austerity is argued to give rise to centralization of decisions making. A recently published article finds evidence of a centralization cascade in times of austerity. Based on a case study of recent... [ view full abstract ]

In the literature times of austerity is argued to give rise to centralization of decisions making. A recently published article finds evidence of a centralization cascade in times of austerity. Based on a case study of recent changes of the Danish budget institutions, the aim of this pa-per is to explore how such a centralization cascade may look like when zooming into a specific case. Another aim is to explore the consequences of the changes of budget institutions. The paper shows that the fiscal crisis was a window of opportunity for the Ministry of Finance to introduce a budget reform that centralizes decisions making. A centralization cascade is identi-fied, as the Ministry of Finance enhances more power and control the ministries more frequent and more in the depth, as a result of this parent ministries have to control their agencies more frequent and much more detailed than before, which finally results in a more detailed control and steering carried out by the managing directors in the agencies. The paper also shows that the changes imply a range of consequences; some are functional others are more dysfunction-al. There seems therefore to be a lot of trade-offs when budget institutions are designed. The implication hereof is that it is very important to consider all these trade-offs when budget insti-tutions are designed and to consider whether it is possible to design budget institutions so that the dysfunctional consequences are minimized and the functional are kept?