Public and Provincial Budget Analysis Using Data Envelopment Analysis and Bankruptcy Game Theory

Abstract

The provincial budget is a part of the national public budget, with its policymaking, distribution, implementation, and oversight entrusted to the Provincial Planning and Development Councils. The rational allocation of provincial budget quotas is essential for improving the country's economic and social conditions. A bankruptcy game model for allocating provincial budget quotas has been introduced and developed using Data Envelopment Analysis (DEA) based on bankruptcy theory and Nash bargaining game theory. This model takes into account the existing inequalities among provinces. The findings indicate that some provinces receive a smaller share of the public budget, exacerbating the imbalance in provincial development due to disproportionate budget distribution. Notably, the demand for a larger share of the public budget is met for some more advantaged provinces. This study presents significant implications for regional development and the efforts to increase the budget for less advantaged provinces.