THE CALL FOR A BUDGETARY THEORY

The appeal of V.O. Key for a budgetary theory is a landmark in interest in public budgeting in modern history. Key clearly referred to a normative theory, raising the question: ‘On what basis shall it be decided to allocate X dollars to activity A instead of activity B?’ (Key, 1940/1978: 20). Early efforts to develop such a theory failed before Aaron Wildavsky took over the relay baton, issuing the first edition of his seminal The Politics of the Budgetary Process, which changed the budge-tary landscape almost completely.1 He argued that the allocation of scarce resources is not a matter of arithmetics or calculation, but a matter of power. Furthermore, he claimed that the concept of incrementalism offered both the best description of and prescription to for the budget process, introducing such now common words as the ‘base ’ and ‘fair share ’ into the vocabulary of budget watchers (Wildavsky, 1964).2 Soon, incrementalism became the dominant theory of public bud-geting in America and, strangely enough, also in Europe, where the power of the purse is with the executive rather than the legislative branch of government. Moreover, empirical support was at best mixed, if not to say weak (LeLoup, 1978; Rubin, 1988). The incremental nature of the budget was further challenged in the period of economic decline in the 1980s due to the oil crises. It turned out that decrementalism is not simply the mirror image of incrementalism, since the base is under attack (Schick, 1983: 23). The various interest groups and stakeholders will fight the spending cuts, giving the budget process a highly political profile. The tradi-tional way of budgeting – across-the-board cuts3 – did not provide much relief, requiring more targeted spending cuts. Consequently, micro-budgeting was counterbalanced by macro-budgeting (LeLoup, 1942/1988), setting norms for the reduction of the budget deficit and/or public expenditures, changing the rules of the game and this is noteworthy, changing the relative strengths of the players of the game.4 The advocates suddenly faced strong guardians, playing down the upward pressure on the budget.The success and failure of these budgetary reforms and their predecessors