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A NEW THEORY OF THE BUDGETARY PROCESS
Author(s) -
TOHAMY SOUMAYA M.,
DEZHBAKHSH HASHEM,
ARANSON PETER H.
Publication year - 2006
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/j.1468-0343.2006.00162.x
Subject(s) - incrementalism , legislator , economics , politics , legislature , inflation (cosmology) , control (management) , budget process , process (computing) , econometrics , actuarial science , macroeconomics , political science , computer science , law , management , legislation , physics , theoretical physics , operating system
This paper offers an alternative to the view that budgetary decisions are incremental because they are complex, extensive, and conflicted. Our model interprets incrementalism as the result of a legislative political strategy in response to interest group politics and economic conditions. Accordingly, a legislator chooses between single‐period budgeting or multiperiod budgeting, where single‐period budgeting is associated with a greater chance of non‐incremental budgeting outcomes. We use a statistical procedure developed by Dezhbakhsh et al. (2003) for identifying non‐incremental outcomes to test the implications of the model. Results support the model's predictions: a higher discount rate and a persistently large deficit appear to cause departures from incremental budgeting; Democrats' control over the political process have a similar effect, while a higher inflation rate has an opposite effect.