Organizational Process Models of Budgeting

Abstract:     
There are several reasons for the obscurity of the organizational process model. Perhaps the most important is the widespread acceptance of the standard economic model, which holds that spending outcomes are determined by the supply of and the demand for publicly provided goods and services and that competition somehow constrains elected officials to serve the tastes and preferences of the median voter. The best way to define the organizational process model is to follow its interesting etiology across time and academic boundaries, focusing on the work of Herbert Simon, Aaron Wildavsky. John Padgett, John Patrick Crecine, and P.D. Larkey. We divide the development of the organizational process model into four distinct phases: pronouncement, formalization, differentiation, and diffusion, look in turn at each of these phases, and conclude that the time has come for scholars to revisit the model, exploring its potential for contributing not only to formal budget theory but also to other fields of public policy and management as well.

Keywords: Budget, satisficing, organizational process, mechanisms

JEL Classifications: B25, H61

Working Paper Series