Fiscal Institutions and Fiscal Performance shifts emphasis away from narrow economic factors to more broadly defined political and institutional factors that affect government policy and national debt. This collection brings together new theoretical models, empirical evidence, and a series of in-depth case studies to analyze the effect of political institutions, fiscal regulations, and policy decisions on accumulating deficits. It provides a fascinating overview of the political and economic issues involved and highlights the role of budgetary institutions in the formation of budget deficits.
While our roundtable considered differences between two states as points of departure, we believe the principles identified in our exchanges apply to other state environments as well. In fact, a major objective of this paper is to encourage other states to consider these questions in light of their own policies and performance. These are the key questions our roundtable participants suggested that any state should ask as it seeks to improve the performance of its higher education institutions in advancing public priorities. 1. To what extent has a state defined the public purposes it expects higher education institutions to help accomplish? Are the purposes a state seeks to achieve through its colleges and universities clearly articulated? Do institutional leaders and policymakers share a common understanding of those purposes? A first step for any state that seeks to improve the performance of its higher education system is to pose and publicly debate a core set of questions concerning that system: What is the rationale that justifies a state's spending for institutional appropriation, capital construction, or financial aid? Is that rationale clearly defined? Is it consciously examined, debated, and reaffirmed at regular intervals in the arenas of public policy? Or have the arguments that justify a state's expenditures for higher education become vestiges of a distant past, subject to differing memories and interpretations? A state needs the political will to set the public agenda-to formulate clear definitions of the public purposes it expects higher education institutions to help attain. As the needs of society itself evolve, the ends a state seeks to achieve through its colleges and universities can also change. For this reason, the question of higher education's role in advancing the public weal needs to be revisited periodically. At the same time, a state needs to assess how well the policies and programs currently in place actually achieve their intended goals. In the absence of such periodic reviews, states tend to increase their expectations of higher education institutions-to add new expectations-without considering how the new expectations relate to those in place from an earlier time. States must also work to maintain a balance between the evolution of their own public purposes on the one hand and the evolution of institutional goals on the other. A state that allows unspoken and implicit priorities to prevail over principles that are publicly debated and affirmed effectively accords more autonomy to institutions in pursuing their own directions. Ultimately, states that do not articulate their purposes may find themselves maintaining institutions for reasons that are increasingly vague and ambiguous. 2. How well do a state's fiscal appropriation practices align with the mandates of its higher education policies? What combination of policy mandate and incentives is most effective in motivating institutions toward the achievement of public purposes? Providing a rationale and framework for supporting higher education institutions is half the task confronting state policymakers. Through a combination of statutory authority and resource allocation, a state must work to ensure that institutions fulfill the public purposes its policymakers have identified. The authority of educational policy derives from the constitutional...
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