Testing The Limits of Incrementalism: An Empirical Analysis of Expenditure Decisions by English Local Authorities, 1981–1996

Abstract

Studies of budgetary outputs in public organizations are dominated by the theory of incrementalism. This perspective suggests that expenditure decisions are based on simple rules of thumb. We evaluate the validity of incrementalism by examining the annual spending decisions of 403 English local authorities over 15 budgetary cycles. Two budgetary norms are tested empirically: protect the real level of service provision, and follow central expenditure guidelines. Each of these norms is translated into two decision rules: marginality, or the size of deviations from the norm, and regularity, which refers to the consistency of such deviations over time. Few of the statistical results support the hypothesis that local expenditure decisions are dominated by general budgetary norms or specific decision rules. Our evidence therefore casts doubt on the validity of incrementalism as a theory of local budgetary outputs, and as an explanation of spending decisions in the public sector as a whole.

Testing Rival Theories of Budgetary Decision–making in the US States

“…The nature of these simple decision rules has been investigated by studies of budgeting in international organizations, national governments, and state and local governments. A recent application of incrementalism at the sub national level was an examination of local government expenditures in the UK (Boyne et al, 2000). Wildavsky (1964), the founder of this theory, implies that the people who design the budget are concerned with relatively small increments to an existing base denoted as the fair share.…”

“…They argue that small changes in expenditure base may be seen as preserving stability. Regular changes represent another form of stability (Boyne et al, 2000). Therefore, incrementalism has two core attributes -marginality and regularity in outputs.…”

“…A recent study has examined quantitatively the impact of incrementalism on sub national budget outputs (Boyne et al, 2000). There is also an extensive body of…”

“…This survey evidence indicates that most states use some combination of incrementalism and rational methods such as program and zero based budgeting. 2 Therefore, to downplay incrementalism when we speak about budget approaches seems entirely inadequate.A recent study has examined quantitatively the impact of incrementalism on sub national budget outputs (Boyne et al, 2000). There is also an extensive body of…”

Budgeting and Rebudgeting in Local Governments: Siamese Twins?

“…Following Wildavsky, the theory of incrementalism has dominated budgeting studies for the last 60 years. Boyne, Ashworth, and Powell () identified three general uses of the term “incremen‐talism” when applied to budgeting process research: (1) description of budgetary outputs, which are considered incremental if differences from the previous year(s) are small; (2) description of budgetary processes, which are considered incremental when decision makers focus their attention on a relatively small number of alternatives as a method of simplifying decision making; and (3) consideration of both processes and outputs.…”