Decision sequencing and budgetary outcomes: A simulation model

This article develops a simulation model to test the impact of decision sequencing and the hierarchy of budgetary decisions upon outcomes. Four levels of decisions are identified that form a decision hierarchy, along with the nature of decision that can be made at each level. The lowest level of decision-the line item-can address only questions of incrementalism. Program level decisions can address redistributive questions. Basic function (defense, social spending) can address the composition of the public sector, while total revenue and expenditure decisions can address questions about the size of the public sector. When decision making starts at the bottom of this hierarchy, higher level decisions are determined. When decision-making starts at the top of this hierarchy, lower level decisions are constrained, but not determined. The simulation model developed here explores these implications.