Administrative Discretion: Its Use in Budgetary Analysis

Abstract

The foundation of this research applies the following definition of discretion: the use of individual judgment to make decisions. The literature surrounding budgetary analysis within the public budgetary process, particularly the first two stages, does not explicitly discuss discretion. Therefore, using the definition above coupled with the limited research surrounding discretion, we demonstrate how agencies, budget offices, executives, and legislative bodies use discretion when analyzing the budget. Overall, agencies and departments maintain discretion when they are assertive, politically astute, and when the budget format promotes flexibility. Effective communication and executive support are two factors that seem to result in agency and department budget growth. Agencies are more likely to witness spending decreases, however, when the legislature is dissatisfied with agency performance. In the end, the presence of politics overshadows, and hence limits, discretion.