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

122 Alta Fölscher
Three years later, however, President Johnson revoked the order. Agencies
used various strategies to continue budgeting as they used to. Some did not
submit the planning memoranda and analysis; others submitted mountains
of paper that the agency’s senior staff members had not even read. The staff
at the Bureau of the Budget was not equipped to undertake the analysis
required, and it continued to operate as previously. The simple fact is that
specifying the objectives of every possible policy alternative, comparing those
alternatives systematically, and then reviewing all agencies’ work at the center
constitute an impossible task. Experience in the United Kingdom with implementing
PPB approaches in defense and education shows that they require
an unbroken line between strategic planning and day-to-day operations. In
many policy areas, a direct line has never existed (Rose 2003: 12).
One positive aspect of program budgeting approaches, including
PPB, is the recognition that public sector organizations are interdependent.
PPB attempts to bring clarity about the goals of government and seeks
cost-effectiveness by assessing various courses of action. Premchand (1983,
quoted in Rose 2003: 13) noted, though, that a number of problems,
including lack of training, shortage of skills, inadequate phasing and too
ambitious an application, disillusionment with paperwork, and nonuse
of the information (or its use for strengthened central control) contributed
to the failures of these early forms of program budgeting.
Zero-Based Budgeting
Another effort to make government budgeting more rational was undertaken
in the late 1970s under the Carter administration. Zero-based budgeting
required every agency to make all its budgeting decisions as if they were
completely new decisions, in other words, as if the agency were starting each
year with a clean slate and an amount of money. In complete contrast to
incremental budgets, zero-based budget systems assume a zero base at the
beginning of each budget cycle. All spending agencies are therefore required
to develop a fresh request for funding every year, which is based on a total cost
analysis for each program. Continuation of programs is not guaranteed.
In a classical zero-based budgeting system, the imperative to consider
all spending afresh is combined with prescriptions regarding how agencies
should go about implementing the system. First, a spending agency is
broken down into decision units: programs, subprograms, or institutions.
Each decision unit then develops goals and associated decision packages,
which include a description of funding levels and increments, activity,
resource requirements, the short-term objective, and the objective’s