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Bounded Rationality in Budgetary Research

Published online by Cambridge University Press:  01 August 2014

John F. Padgett
John F. Padgett*
Affiliation:
Harvard University
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Abstract

Two bounded rationality theories of federal budgetary decision making are operationalized and tested within a stochastic process framework. Empirical analyses of Eisenhower, Kennedy and Johnson domestic budget data, compiled from internal Office of Management and Budget planning documents, support the theory of serial judgment over the theory of incrementalism proposed by Davis, Dempster and Wildavsky. The new theory highlights both the structure of ordered search through a limited number of discrete alternatives and the importance of informal judgmental evaluations. Serial judgment theory predicts not only that most programs most of the time will receive allocations which are only marginally different from the historical base, but also that occasional radical and even “catastrophic” changes are the normal result of routine federal budgetary decision making. The methodological limitations of linear regression techniques in explanatory budgetary research are also discussed.

Type
Research Article
Information
American Political Science Review , Volume 74 , Issue 2 , June 1980 , pp. 354 - 372
Copyright
Copyright © American Political Science Association 1980

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