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This means two things: (1) the budgeting process is incremental and (2) the
budget outcome is incremental. From a normative standpoint, Wildavsky argues that the
budgeting process should be incremental because there are (1) conflicting preferences
for expenditures, (2) difficulties associated with calculating all possible alternatives, and
(3) insufficient information for comparing each alternative. From an empirical
standpoint, Davis, Dempster, and Wildavsky (1966) show that the U.S. budget outcome
changed incrementally year after year. At the subnational level, Lauth (1978) holds that
the budgeting process and outcome were still incremental even after the state of Georgia
formally adopted ZBB (Zero-Base Budgeting).
Some critics argue that incrementalism neglects environmental factors such as
socio-economic factors (Kemp, 1982). Schick (1983) argues that incrementalism offers
a limited explanation of the budgeting process and outcome during an economic
downturn, although it explains the budgeting process and outcome quite well during a
period of economic growth.
Although no underlying conceptual model for local expenditure decision-making
is fully developed, several important determinants have been identified: (1)
incrementalism, (2) fiscal capacity, (3) demand for services, (4) cost of supplying
services, and (5) intergovernmental grants.
Convention