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Zero-base budgeting in the federal government: a case study
Sloan Management Review
|December 8, 1979
Summary
Zero-base budgeting (ZBB) implementation in federal agencies like the Public Health Service showed varied results. The study suggests ZBB was misused and may be inappropriate for large government budgets, disappointing key stakeholders.
Area of Science:
- Public Administration
- Health Services Management
- Government Budgeting
Background:
- President Carter initiated zero-base budgeting (ZBB) in 1977 for federal agencies.
- ZBB implementation led to diverse outcomes across agencies and departments.
- The Public Health Service (PHS) experience with ZBB is a key case study.
Purpose of the Study:
- To document and analyze the Public Health Service's experience with zero-base budgeting.
- To evaluate the effectiveness and appropriateness of ZBB in a large governmental system.
- To understand the reasons for stakeholder disappointment with the ZBB process.
Main Methods:
- Case study analysis of the Public Health Service's budgeting process.
- Documentation of agency and departmental experiences with ZBB.
- Critical evaluation of ZBB's application and outcomes.
Main Results:
- Individual PHS agencies largely perceived ZBB as an ineffective budgetary tool.
- Significant variations in ZBB results were observed both between and within PHS agencies.
- The study found evidence of misuse and potential inappropriateness of ZBB for large-scale government budgets.
Conclusions:
- The application of zero-base budgeting within the PHS was problematic and yielded disappointing results.
- The author contends that ZBB was misused and may not be suitable for the entire budget of a large political system.
- Stakeholders expected to benefit most from ZBB were ultimately the most disappointed.