Combining Incrementalism and Exogenous Factors in Analyzing National Budgeting

Abstract

This article focuses on the impact of both incrementalism and exogenous factors in budgeting. The authors present a double-distinction-based proposal combining incrementalism and exogenous factors and then apply this model to the case of Spain. This approach enables the authors to avoid some of the shortcomings of the earlier Davis, Dempster, and Wildavsky’s econometric method and its extensions, to examine both within-budget incrementalism (WBI) and budget-total incrementalism (BTI), and to use exogenous variables in order to explain the dynamic of marginal change and nonincremental budget variations. Results for Spain not only confirm the relevance of incrementalism but also indicate the need for additional variables to explain the dynamic of marginal change in the budget total and nonincremental changes within the budget.