Budgetary tradeoffs under top-down and bottom-up budgeting

This is an inductive study of budgetary tradeoffs within top-down and bottom-up budgeting systems. Tradeoffs, which are measured as partial correlations between expenditure categories, are compared over three different organizational levels (line-item, agency and department), three different budgeting stages (requests, recommendations and appropriations), and two time periods (top-down and bottom-up budgeting) within one city. The results show a highly contingent relationship between budgeting systems and tradeoffs. For instance, few tradeoffs, or other systematic budgeting outcomes, occur at the departmental level under either budgeting system; but tradeoffs occurring at the lower levels under both systems depend upon and are constrained by various conditions within agencies and departments such as flexibility of expenditures, size of the department or agency, visibility, slack resources, and the political environment.