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Week 4: Deficits, Budget Balancing, Reforms Federal deficit politics: questions raised by Kettl book Is budgeting rational? Should it be? Can it be? Definitions and critiques of rationality in economics, political science, policy analysis, budgeting Incrementalism in budgeting

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Week 4: Deficits, Budget Balancing, Reforms

  • Federal deficit politics: questions raised by Kettl book

  • Is budgeting rational? Should it be? Can it be?

    • Definitions and critiques of rationality in economics, political science, policy analysis, budgeting

  • Incrementalism in budgeting

  • The role of analysis in budgeting

  • Class exercise on budget analysis

  • Preview of Week 5


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Federal Deficit Politics

  • New predictions of deficits

    • Recent Congressional actions to increase spending

    • Bush tax cut

    • Public opinion

  • Questions raised by Kettl and Wildavsky

    • How important is it to reduce the deficit?

    • Why can’t we reduce the deficit if most people agree it should be done?

    • Is the deficit a sign of faulty budget process?

    • Is the breakdown of agreement on budgets a problem?

    • Is it possible to make budget process more rational?


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Is/Should/Can the Budget Process be Rational?

  • What is rationality?

  • Rationality in economics

  • Rationality in political science

  • Rationality in policy analysis

  • Rationality in budgeting


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What is Rationality?

  • Based on reason

  • Analysis

  • Objective

  • Comprehensive

  • Systematic

  • Problem solving

  • Apolitical


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What is rational, in budgeting

  • In budget process:

  • In budget outcomes:

    (to be filled in by class discussion)


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Rationality in Economics and Political Science

  • Economics

    • individuals

    • fixed preferences

    • maximize expected utility

    • market mechanism

  • Politics

    • explains political outcomes as result of self-interested behavior of individuals

    • citizens/voters as individual consumers

    • politics is a marketplace

    • no collective goals or interests

    • no learning from others or situations

    • public interest is sum of individual interests


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Critique of Stone’s Policy Paradox


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Assumptions

Analytical techniques can measure costs and benefits

All affected parties can have impact accounted for

Outcomes can be projected with some certainty

Used by clients to solve problems

Process

Identify objectives

Identify alternative courses of action

Predict consequences of each alternative

Select the alternative that maximizes objective

Recommend to decision maker

Rationality in Policy Analysis


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Rational-Comprehensive Method:

1. Clarify objective apart from policy choices

2. Ends-means analysis

3. Good policy is the best means to the ends

4. Analysis is comprehensive

5. Information is conclusive and authoritative

Successive Limited Comparisons:

1. Objectives and choices are linked

2. Ends and means not distinct

3. Good policy is one on which agreement can be reached

4. Analysis is always limited

5. Information is ambiguous and subject to interpretation

Critique of Rational ModelLindblom: The “Science” of Muddling Through


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Critique of Search for Rational Budgeting

  • Comprehensive analysis is impossible

    • Incrementalism -- see next slide

  • Budgeting is about choosing among values

    • process reflects political system

    • reforms to replace politics with analysis are doomed to failure: aimed at wrong target

    • for different outcomes, need to change system

    • Political process does a better job of solving value problems

  • Attempts at reform have failed (although left some useful techniques and approaches)

    • Analysis must be in the service of politics


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Incrementalism

  • Descriptive v normative

    • is it accurate?

    • is it the best we can do?

    • Does it work better under certain conditions?

      • growth

      • declining revenues

      • when there is agreement on base

  • Does political budgeting require incremental process and outcomes?


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Role of Budget Analysis

  • The irony of Wildavsky’s legacy?

    • Graduate School of Public Policy and LAO

  • How much analysis? What kind?

    • Would unlimited analysis achieve rationality?

  • LAO type of analysis v PPBS, MBO, PB, etc.

  • Are politics and analysis antithetical?

    • How can analysis serve, rather than replace politics?

    • What should analysis try to accomplish?

    • If analysis is rejected by decision makers, is it useless?

    • What should budget analysts try to accomplish?


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Preview of Week 5

  • Kettl Chapter 5 will repeat some of Wildavsky’s Reform chapter, but is clearer

  • Wildavsky fit with week 4 because of rationality focus

  • For next week, think about today’s discussion of politics and process as you describe your agency’s budget process.

  • Read Kettl first; then can skim Rubin p. 190-201on federal deficit and focus on state process and other issues

  • Tuesday email

  • first memo on your department/unit; may need interviews

    • review sample memos for writing style