Municipal revenue over-budgeting: a dynamic analysis of its determinants

This paper investigates which factors affect revenue over-budgeting in the local government, considering budgetary, political, and institutional determinants. It applies dynamic panels analysis to data from Portuguese municipalities between 2005 2017. Regarding budgetary arrangements, has implications for several years, taking up three years dissipate. The difference budgeted revenues ones collected previous year is a good predictor that overestimated. ratio of own-source over total directly related with over-budgeting; however, this effect comes municipality’s wealth. About political factors, municipal Executives majorities electoral are more prone over-budget; ideology does not seem be important. As participation any debt restructuring program inversely over-budgeting, while excessive play role. Overall, only mechanism reduces misbehavior external control.