An Integrated Theory of Budgetary Politics and Some Empirical Tests: The U.S. National Budget, 1791–2010

We develop a general theory of budgetary politics and examine its implications on a new data set on U.S. government expenditures from 1791 to 2010. We draw on three major approaches to budgeting: decision‐making theories, primarily incrementalism and serial processing; policy process models; and path dependency. We show that the incrementalist budget model is recursive and that its solution is exponential growth, and isolate three periods in which it operates in pure form. The equilibrium periods are separated by critical junctures, associated with wars or economic collapse. We assess policy process dynamics by examining the deviations within equilibrium periods. We offer three takeaways: (1) exponential incrementalism is fundamental to a theory of budgeting; (2) disjoint shifts in the level of exponential incrementalism are caused only by critical moments; (3) temporally localized dynamics cause bends in the exponential path, longer returns to the path within budgetary eras, and annual punctuations in budget changes.     

State Performance‐Based Budgeting in Boom and Bust Years: An Analytical Framework and Survey of the States

The authors examine the track record of applying performance‐based budgeting (PBB) across three time periods within a sample of U.S. state governments: (1) throughout the 1990s, (2) in the early 2000s, and (3) during the Great Recession. State‐level PBB is analyzed according to four elements: (1) the development of performance measures, (2) its applicability to budgeting and management processes, (3) its utility across the business cycle, and (4) its usefulness for budget players. An analytical framework is devised that highlights the “publicness” of American government, draws on the principal–agent model, and considers incentive mechanisms theory. Findings confirm that a good performance measurement system takes time to develop and operate well and that PBB functions more effectively for executive management than legislative purposes. PBB is used more by the states during strong economic times as opposed to during economic downturns. More importantly, PBB is only selectively applied by legislators in most states, whereas top executive policy makers, middle managers, and staff embrace and utilize PBB systems more extensively.