ABSTRACT
The incentive vs. targets trade-off in conventional budgeting is a variation on an economizing logic finance officials use—one trading off budget results with budget control. The issue has interested everyone in government budgeting and finance, from researchers to practitioners to, especially, students. For example, the International Public Management Network recently published a symposium on out-year savings (Jones, 2005). The symposium arose from the question, “Does anyone know of any academic research (either empirical or policy proposal-type) on the issue of what happens to government agency budgets at time t + 1 if they achieve costs savings (for example, efficiency savings) at time t?” (Kelman, 2005, p. 139). The blog conversation revealed that little research or experience existed, however tight the logic of savings. The published symposium related a well-known counterlogic—that budget reviewers routinely penalize savings.
