The Influence of National Culture on Government Budgeting Practices: An International Analysis

60 Pages Posted: 21 Aug 2011

See all articles by Yanxia Qi

Yanxia Qi

China University of Petroleum - School of Business Administration, Department of Accounting and Finance

Yaw M. Mensah

Rutgers Business School - Newark & New Brunswick

Date Written: August 20, 2011

Abstract

Differences in cultural philosophy at the national level have been theorized to affect business practices, legal systems, social behavior norms, educational achievements, and even the rate of economic growth. We extend this literature to examine the effect of national culture on government budgeting practices, using Hofstede’s (1980, 1983) 4-factor cultural dimensions. Government budgeting practices are classified with respect to the extent to which the legislative body controls government expenditures (Legislative “Power of the Purse”), and also the extent to which the budgets are transparent to both the legislature and the general public (Budget Transparency). Using data from 49 countries covered in both the OECD/World Bank (2007/2008) Government Budgeting Practices Surveys and Hofstede’s national cultural dimensions study, we find the following: (1) Hofstede’s Masculinity and Uncertainty Avoidance indices are both positively related to the Legislative Power of the Purse measure; and (2) the Individualism index is significantly and positively related to Budgeting Transparency. The implications of these findings are then discussed.

Keywords: National Culture, Legislative Power of the Purse, Budget Transparency, Cultural Dimensions

JEL Classification: H72, M41, R50, Z10

Suggested Citation

Qi, Yanxia and Mensah, Yaw M., The Influence of National Culture on Government Budgeting Practices: An International Analysis (August 20, 2011). Available at SSRN: https://ssrn.com/abstract=1913421 or http://dx.doi.org/10.2139/ssrn.1913421

Yanxia Qi

China University of Petroleum - School of Business Administration, Department of Accounting and Finance ( email )

18 Fuxue Road, Changping
Beijing, 102249
China

Yaw M. Mensah (Contact Author)

Rutgers Business School - Newark & New Brunswick ( email )

100 Rockafeller Road
Piscataway, NJ 08854
United States
848.445.4369 (Phone)
732.445.0351 (Fax)

HOME PAGE: http://business.rutgers.edu

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