Transcript Public Budget As Decision

Public Budget As DecisionMaking Process
 Decision - Making Models:




Incremental Change Model
Satisfying Model
Ideal Rational Model
Stages of Problem Solving Model
 Many People use these theories
or models as their guide to
reform public budgeting
 To understand these theories or
models , a criterion must be
developed to judge them and
the concept of conceptual
models itself must be explained
 A conceptual model can viewed
as a tool which enables the user
to understand and deal with
complex phenomena
 A tool can be judged “good’ or
‘bad” in terms of the user’s
purpose
 Professionals
should
judge
conceptual
models or theories in
terms of the model’s
usefulness in helping
them accomplish their
tasks
 These tasks must be
accomplished within a
decision-making context
largely induced by the
ideologies of the culture
 Decision-making
models can be judged
in
terms
of
their
applicability
to
the
decision-making
environment
of
the
public budget person
 Some
major
and
commonly
noted
decision-making models
are
the
Incremental
Change
Model,
the
Satisfying Model, and
the
Ideal
-Rational
Model. To this list, a
provocative but littlecited model called the
“Stages of Problem
Solving” can be added.
Incremental Model:
 This model is used for
descriptive and normative
purposes ( The former refers
to
a
model
which
is
constructed for purposes of
explaining and/or predicting
the consequences of policy
choices while the latter is
constructed for purposes of
optimizing the attainment of
some utility ). The model tells
us that the best predictor of
what will happen in the future
is what we are doing now. Our
focus
shall be on the
normative use of the model
Main Features of this
model:
 Style of policy - making based
on small,marginal changes
from existing policies.
 It narrows the area open to
dispute,
thereby
reducing
conflicts, and that it is
consistent with the principles of
conservatism
 Budget processes were seen
as
stable,
predictable,
changing little from year to
year and based on well
defined roles that could
represented
by
relatively
simple decision rules
 In developing a budget,
the agency takes the
role of an advocate and
the budget reviewer
takes the
role
of
accommodates
 This model is an
excellent
tool
for
understanding
the
political environment of
public policy making,
but it is not useful for
explaining the more
technical
difficulties
associated
with
analysis.
The Satisfying Model:
 Based on certain criterion
( See Figure )
 Select first acceptable
alternative,
the
acceptable
is
the
standard for judgment.
 This model dramatically
emphasizes
that
decisions are made under
pressure,
and
sever
limitations
make
achieving
even
a
satisfactory alternative a
significant
accomplishment.
The Rational Model:
 The
model
systematically
breaks decision-making down
into six phases:
1. Establish a complete set of the
operational goals, with relative
weights allocated to the
different degrees to which
each may be achieved;
2. Establish a complete inventory
of other values and resources
with relative weights;
3. Prepare a complete set of the
alternative policies open to the
policy maker
4. Analyze the alternative policies
by making a valid predictions
of the cost and benefits of
each alternative;
5. Calculate the outcome ( net
expectations
)
of
each
alternative;and
6. Compare the net expectations
and make a selection.
 The problem with this model is
that the best alternative often
cannot be achieved because of
practical concerns ( lack of
time ).
Stages of Problem
Solving Model: Phases
1. Perception that a problem
exists. This permits the
possibility of multiple
value perspectives;
2. Considering the solutions;
3. Analyze the alternatives;
4.Decide
whether
to
reconsider the nature of
the problem or to plan
resolve the problem;and
5. Evaluation of outcomes
Phases 4 and 5 are not part
of the rational model.
From evaluation, the
decision
maker
may
either start over by
reconsidering
the
problem or re-plan his or
her actions steps
Comparative analysis of the four models:
 The incremental model is an excellent tool for understanding the
political environment of public policy making. With this model, the
public budget person can better understand how the budget
process is dominated by the strategies employed by and the
conflicts that arise among participants. Proponents of this model
argued: That a process which concentrates on an increment is
preferable to one that attempts to review the whole budget
because it moderates conflict, reduces search costs, stabilizes
budgetary roles and expectations, and reduces the amount of time
that officials must invest in budgeting , thus increasing the
likelihood that important political values will be taken into account.
 The Satisfying and Ideal - Rational Models are useful for
understanding the difficulties associated with decision-making.
The Satisfying Model dramatically emphasizes that decisions are
made under pressure, and
 Severe limitations make achieving even a satisfactory
alternative a significant accomplishment. The problem
with model is that one is often not satisfied that the best
alternative has been selected. On the other hand, the
desire for deciding on the best alternative is reflected in
the Ideal-Rational Model. The problem with that model
is that the best alternative often cannot be achieved
because of practical concerns such as a lack of time.
 The Stages - of - Problem Solving Model can be
contrasted to the Ideal- Rational Model. In the problem
solving model, the starting point is the perception that a
problem exists, thus permitting one to consider the
significance of culture, time, and perspective. By
contrast, in the rational model the starting point is the
definition of one’s goals. Next, in the problem-solving
model, the person formulates the problem,
 Defines alternatives, gathers information, and tests
proposals. In the rational model, the next steps cited
are defining alternatives and gathering information. In
the problem-solving model, the last steps are planning
action, taking action steps, and evaluating outcomes.
Again in contrast, the rational model is limited to
deciding a given matter with the intention of
maximizing goals. The rational model dose not extend
to taking action steps and evaluating outcomes.
Another distinction is that the rational model dose not
have reconsideration as a factor, whereas the
problem-solving model does.
 The problem-solving model can help people working
in public budgeting understand the nature of analysis.
The rational model serves as the primary theoretical
explanation of how analysis should conducted, but the
rational model can not be attained.
 The problem-solving model serves as an alternative
theoretical explanation of how analysis should be
conducted in the budgetary process. The model permits
cycles of defining one’s problem, producing
alternatives, and testing alternatives. It implicitly
recognizes that any given analysis will depend upon the
ingenuity of the analysts, the kind of data available to
them, the amount of resources at their command in
undertaking the analysis, and other factors. Also the
problem solving model helps the public budget person
relate budgeting, management-by-objectives, progress
reporting, accounting, auditing, and program evaluation.
 Non of the models by themselves is adequate. The
problem-solving and the incremental change models
help the bureaucrat to understand the role of program
and budget analysis in the budget-making process.
 They can be significant, but there are some
constraints in using them. The problem solving model
helps the bureaucrat to understand the context in
which intelligence, knowledge, and analytical
techniques must be used. Together, the models meet
the criteria.
 The rational model, the theoretical basis for some
budget reforms, can lead individuals to make false
and naive expectations. That model ignores the
political context and demands the impossible in terms
of analysis.. This can encourage some individuals in
the budget process to neglect timeliness, seek
needlessly expensive data, search for needless
alternatives, and quest for clarity in objectives which
will not be forthcoming.
Garbage Can
 Multiple streams in budgeting. Irene Rubin (2006, 2007) has adapted
'garbage can' theory for the setting of federal budgeting, which she
interprets as reflecting the convergence of five streams: revenue
(taxes, fees, tariffs, etc.), expenditure (what to spend on), process (who
influences what to spend on), implementation/execution (how to
administer), and balance (how to meet balance requirements). In what
she labels "real-time budgeting," budget decisions are made in a nonlinear manner, on the fly, in the context of pressures from any of the
five streams or some combination converging at the moment. The
multiplicity of streams creates a variety of dynamics. For instance,
when actors fail to prevail in the expenditure stream they may seek to
focus on restructuring the process stream. When decisions in the
expenditure stream precede decisions in the revenue stream, they will
be less stable. Etc. Similarly, Katherine Willoughby (Melkers and
Willoughby, 1998, 2001, 2005; and Thurmaier and Willoughby, 2001)
has analyzed budgeting in terms of "multiple rationalities," referencing
Rubin's concept of "real-time budgeting" but arguing that performance
budgeting would increase the flow of information in agenda-setting
streams (she references the agenda-setting model of Kingdon, 1984).