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Bounded Rationality in Budgetary Research

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  • Padgett, John F.

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.

Suggested Citation

  • Padgett, John F., 1980. "Bounded Rationality in Budgetary Research," American Political Science Review, Cambridge University Press, vol. 74(2), pages 354-372, June.
  • Handle: RePEc:cup:apsrev:v:74:y:1980:i:02:p:354-372_16
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    Cited by:

    1. Giovanni Gavetti & Daniel Levinthal & William Ocasio, 2007. "Perspective---Neo-Carnegie: The Carnegie School’s Past, Present, and Reconstructing for the Future," Organization Science, INFORMS, vol. 18(3), pages 523-536, June.
    2. Kjell Hausken, 2019. "Principal–Agent Theory, Game Theory, and the Precautionary Principle," Decision Analysis, INFORMS, vol. 16(2), pages 105-127, June.
    3. Sangyoon Yi & Thorbjørn Knudsen & Markus C. Becker, 2016. "Inertia in Routines: A Hidden Source of Organizational Variation," Organization Science, INFORMS, vol. 27(3), pages 782-800, June.
    4. Jonathan Bendor & Sunil Kumar, 2005. "The Perfect is the Enemy of the Best," Journal of Theoretical Politics, , vol. 17(1), pages 5-39, January.
    5. Mukdad Ibrahim, 2016. "Bounded Rationality and Budgeting," International Review of Management and Marketing, Econjournals, vol. 6(4), pages 755-760.
    6. Kjell Hausken & Jun Zhuang, 2011. "Governments' and Terrorists' Defense and Attack in a T -Period Game," Decision Analysis, INFORMS, vol. 8(1), pages 46-70, March.
    7. Kjell Hausken, 1997. "Game-theoretic and Behavioral Negotiation Theory," Group Decision and Negotiation, Springer, vol. 6(6), pages 511-528, December.
    8. Mukdad Ibrahim, 2016. "Bounded Rationality and Budgeting," International Review of Management and Marketing, Econjournals, vol. 6(4), pages 755-760.
    9. Lepori, Benedetto & Montauti, Martina, 2020. "Bringing the organization back in: Flexing structural responses to competing logics in budgeting," Accounting, Organizations and Society, Elsevier, vol. 80(C).
    10. Magnus Lundgren & Theresa Squatrito & Jonas Tallberg, 2018. "Stability and change in international policy-making: A punctuated equilibrium approach," The Review of International Organizations, Springer, vol. 13(4), pages 547-572, December.
    11. Meagan M. Jordan, 2003. "Punctuations and agendas: A new look at local government budget expenditures," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 22(3), pages 345-360.
    12. Tevfik Murat Yildirim, 2022. "Stability and change in the public’s policy agenda: a punctuated equilibrium approach," Policy Sciences, Springer;Society of Policy Sciences, vol. 55(2), pages 337-350, June.
    13. Bernard GROFMAN & Joseph GODFREY, 2014. "Aspiration Models of Committee Decision Making," Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS 2014-04-ccr, Condorcet Center for political Economy.
    14. Travis Sharp, 2019. "Wars, presidents, and punctuated equilibriums in US defense spending," Policy Sciences, Springer;Society of Policy Sciences, vol. 52(3), pages 367-396, September.
    15. Stephen J. Mezias & Ya-Ru Chen & Patrice R. Murphy, 2002. "Aspiration-Level Adaptation in an American Financial Services Organization: A Field Study," Management Science, INFORMS, vol. 48(10), pages 1285-1300, October.
    16. Bryan D. Jones & Frank R. Baumgartner & Christian Breunig & Christopher Wlezien & Stuart Soroka & Martial Foucault & Abel François & Christoffer Green‐Pedersen & Chris Koski & Peter John & Peter B. Mo, 2009. "A General Empirical Law of Public Budgets: A Comparative Analysis," American Journal of Political Science, John Wiley & Sons, vol. 53(4), pages 855-873, October.

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