Fiscal slack, budget shocks, and performance in public organizations: evidence from public schools Academic Article uri icon


  • 2016 Informa UK Limited, trading as Taylor & Francis Group. Some scholars equate fiscal slack with organizational inefficiency, while others argue that it is a useful environmental buffer. This study takes the first step in reconciling these opposing views, by classifying fiscal slack as absorbed and unabsorbed slack in public organizations. In a sample of 1,000 Texas public school districts over 17years, fund balance (unabsorbed fiscal slack) does not seem to affect student performance, unless there is a major downward budget shock. In the absence of a negative budget shock, non-instructional spending per pupil (absorbed fiscal slack) has a negative impact on performance change in an average school district, but no meaningful impact on student performance during a major budget shock.

published proceedings


author list (cited authors)

  • Moulick, A. G., & Taylor, L. L.

citation count

  • 19

complete list of authors

  • Moulick, Abhisekh Ghosh||Taylor, Lori L

publication date

  • August 2017