ABSTRACT
This chapter investigates whether bureaucratic centralization enhances information-processing capacity of budget decision makers and reduces institutional frictions in the process of preparing President's budgets in the national government. The US Budget contains the president's budget message, analytical and economic information about president's budget proposals, and other budgetary publications such as historical budget tables on outlays and budget authorities by function, subfunctions, and agencies. The US budget authorities are first reported based on the Office of Management and Budget (OMB) functional budget classification. Compared to the normal approximation curve, actual frequency distributions of Increment have an abnormally high peak. Institutional frictions restrict information-processing capacity of budget decision makers, which will result in more frequent budget punctuations and stability. As theories of bounded rationality clarified, political institutions also likely cause institutional frictions. Split legislature governments are characterized by the strongest potential for institutional frictions. Split legislature governments might not provide the best condition for defender-type organizations to maximize their centralized control functions.
