How budgeting frameworks differ between federal and unitary states

Ibrahimov, Farid (2025) How budgeting frameworks differ between federal and unitary states. International Journal of Science and Research Archive, 15 (1). pp. 998-1012. ISSN 2582-8185

Budgeting frameworks are foundational to the functionality and efficiency of any state apparatus, acting as blueprints for how public resources are allocated, managed, and evaluated. This paper explores the fundamental distinctions between budgeting frameworks in federal and unitary states, emphasizing the structural, procedural, and practical implications of each model. Federal systems, characterized by a constitutionally mandated division of power between central and subnational governments, tend to exhibit a complex, multi-tiered approach to budgeting. This includes decentralized revenue collection, differentiated expenditure responsibilities, and a reliance on intergovernmental fiscal transfers to address vertical and horizontal imbalances. In contrast, unitary states typically maintain centralized control over fiscal policy, leading to streamlined budgeting processes, consistent national standards, and potentially more efficient policy coordination, though sometimes at the cost of responsiveness to regional needs. Ultimately, this article argues that while neither framework is inherently superior, each has context-dependent advantages and limitations. By understanding these differences, policymakers can adopt more nuanced, adaptive approaches to budget reform and public financial management, especially in an era of increasing fiscal stress and demand for government accountability.