Stability and Punctuations in Public Spending : A Comparative Study of Budget Functions

Abstract

This article provides a comprehensive analysis of stability and punctuations in public spending within and across two different countries - Denmark and the United States. The theoretical starting point is the classic model of budget incrementalism and Jones and Baumgartner's model of disproportionate information processing. First, despite the clear differences in institutional setup, we show that public spending spanning many decades in Denmark and the United States are characterized by a similar distribution of small-, medium-, and large-scale spending changes. What is more intriguing is that we show how this aggregate result obscures (1) substantial variation between categories of public spending and (2) similar tendencies within similar spending categories across the two countries. These findings suggest that we need to unpack the overall budgets for detecting the particular sources of stability and change in government spending. Hence, the article offers important comparative findings that not only challenge the empirical validity of classic budgetary incrementalism but also advocate an increased focus on more disaggregated spending dynamics than employed in previous studies of the model of disproportionate information processing.