Comprehensive Versus Incremental Budgeting in the Department of Agriculture

When the Department of Agriculture shunted aside traditional methods of budgeting and attempted a comprehensive and simultaneous evaluation of all departmental programs, the authors conducted interviews in order to determine what the results would reveal about the controversy surrounding incremental versus comprehensive modes of decision making. They discovered that a zero-base budgetcalling for the relative evaluation of each major item in the budget as compared to every other, and explicitly rejecting reliance on a historical base-could be described but could not be practiced. Comprehensive, zero-base budgeting vastly overestimates man's limited ability to calculate and grossly underestimates the importance of political and technological constraints. The required calculations could not be made and would not have led to substantial changes. As a result, a great deal of effort went into zero-base budgeting with few specific changes attributable to this costly method. Nevertheless, there appeared to be psychic benefits which led some of the participants to approve of zerobase budgeting. The authors found a Hawthorne effect in that participation in the experiment enhanced the importance of some men engaged in budgeting. Officials in the bureau felt good at being able to educate their departmental superiors. Top department officials were happy to show their expertise to bureau officials. And many officials were pleased that the new and apparently more rational mode of decision making seemingly confirmed the rightfulness of their existing policies. This line of reasoning helps explain why many officials were certain that the zero-base budget had helped people at other levels in