ABSTRACT
Allocation formula is one of the decision rules used to allocate resources in the public sector. Usually, an allocation formula is specified in legislation, but sometimes it is provided by regulation. A good allocation formula is understandable, equitable, adequate, and predictable. Formula allocation makes justification for budget requests easier. Citizens tend to be accepting of allocations that are based on formulas, because they have an aura of objectivity and fairness. Nevertheless, their effectiveness can be severely hampered by data that are stale, inaccurate, and irrelevant.
