Public Sector Governance and Accountability Series: Budgeting and ...

114 Alta Fölscher
inputs. It is only when allocations are first made to a classification of
programs and subprograms that substantial shifts in how budgets are
decided can be engineered.
This delinking of base spending from the coherent sets of activities they
fund underpins typical input-based incremental line-item budgeting practices.
Instead of looking at the activities that were being funded—and that
were in line with the budget control requirements of budget classification—
spending and central control agencies looked at classes of inputs when
spending cuts were required. Instead of discontinuing lower-priority activities,
these agencies applied spending cuts to inputs across all activities,
whether of low or high priority.
In an incremental line-item budgeting system, decision making about the
bulk of spending is thus reduced to concentrating on changes in various input
items—personnel, equipment, maintenance, utilities, or transportation—that
make up programs rather than to looking at programs (or subprograms) as
wholes. Hence, though all programs are affected negatively by spending cuts,
no single program needs to be shut down, and the difficult process of negotiating
the discontinuation with stakeholders can be avoided. As Wildavsky and
Caiden (1997) note, the line-item form enables decision makers to concentrate
on the less divisive issue of how much for each item, rather than how
much for one set of beneficiaries over another.
Budgeting Practices in Incremental Systems of Developing Countries
Line-item incremental budget systems include an array of institutionalized
behaviors that detract from good budget outcomes. In their work on budgeting
in developing countries, Wildavsky and Caiden (1980: 137) relate a
number of departmental strategies common to budget practices in these
countries. Although they undertook the research in the 1970s, practitioners
will recognize some, if not all, of the strategies as still part and parcel of
practice today.
First is the practice at line ministry level whereby budgeting means
requesting resources equal to what spending ministries perceive their real
needs to be—and then some. Instead of budgeting being the practice of
planning for available resources, agencies perceive that there is always more
money available and that the initial budget ceiling they receive is merely a
device to limit the number of requests with which the ministry of finance
has to contend. Their behavior is also motivated by a desire to protect themselves
against the budgetary effect of macroeconomic uncertainty: when
revenues fluctuate, agencies compete to avoid spending cuts. Overstating