Testing the limits of incrementalism: An empirical analysis of expendituredecisions by English local authorities, 1981-1996

Studies of budgetary outputs in public organizations are dominated by the t heory of incrementalism. This perspective suggests that expenditure decisio ns are based on simple rules of thumb. We evaluate the validity of incremen talism by examining the annual spending decisions of 403 English local auth orities over 15 budgetary cycles. Two budgetary norms are tested empiricall y: protect the real level of service provision, and follow central expendit ure guidelines. Each of these norms is translated into two decision rules: marginality, or the size of deviations from the norm, and regularity, which refers to the consistency of such deviations over time. Few of the statist ical results support the hypothesis that local expenditure decisions are do minated by general budgetary norms or specific decision rules. Our evidence therefore casts doubt on the validity of incrementalism as a theory of loc al budgetary outputs, and as an explanation of spending decisions in the pu blic sector as a whole.