Indiana University SPEA Edward J. Bloustein School of Planning and Public Policy University of Pennsylvania AIR American University

Panel Paper: Agency Type and Budget Allocation: Does It Make a Difference?

Saturday, November 14, 2015 : 2:45 PM
President's Room (Hyatt Regency Miami)

*Names in bold indicate Presenter

Hyokyung Kwak and Jinhai Yu, University of Kentucky
This paper applies a public organization theory to the U.S. federal budgeting process to explain changes in federal budgeting. James Q Wilson (1991) divided public organizations into four categories including production, craft, procedural, and coping ones according to whether the agency outputs are easily measured and whether the production processes are visible to outsiders. We attempt to empirically test this typology at the program level by examining its consequences for budget change. The rationale is that agencies can use high levels of output measurement and production transparency as “hard” evidence to bargain for more resources for a program and leave less room for budget cutbacks from President, OMB, or the Congress. The hypothesis is that those programs whose production is readily observable and output is easily measured are more likely to have a stable budget allocation, i.e., smaller variance and less punctuations. We first distinguish discretionary programs from entitlement programs and then focus our analysis on the former category. We code the type of program based on the information provided by the Program Assessment and Rating Tool (PART) in the Bush Administration. As a demonstrative test of the coding rules, we analyze a randomly selected sample of all discretionary programs and find that, compared to production programs, coping programs are more likely to experience big, negative budget change from the actual spending in 2008 to the budget request in 2009. While this preliminary analysis lends tentative support to the hypothesis, the next step of improvement is to refine the coding procedure and to enlarge the sample to include all discretionary programs so as to achieve higher statistical power. By exploring the effects of program characteristics on its budget allocation, this study would contribute to the literature on government budgeting by incorporating theories from other subfields of public administration.