J. OF PUBLIC BUDGETING, ACCOUNTING & FINANCIAL MANAGEMENT, 22 (3), 343-375
FALL 2010
UNITED ARAB EMIRATES FEDERAL BUDGETARY PROCESS: THE
DECISION-MAKING STYLES
Ahmed Mustafa Elhussein Mansour*
ABSTRACT. The paper concentrates on the administrative side of the United
Arab Emirates (UAE) budgetary process and employs a quantitative approach
to test two major hypotheses about the style of decision making and the
impact of this style on annual estimations of public expenditures. Therefore,
the major question of the paper is not concerned with the content of these
decisions (annual estimations) in a substantive descriptive and normative
manner, as in public finance studies, but rather with the analysis of the
outcomes of these decisions. The paper uses data from annual budgetary
allocations to test certain hypotheses and concludes that UAE budgetary
decision-makers in United Arab Emirates Federal ministries use an
incremental style of decision making to estimate their annual expenditure.
INTRODUCTION
The major objective of this paper is to analyze and test
hypotheses about the style of decision making in the United Arab
Emirates (UAE) federal government budgetary process. Specifically,
the paper concentrates on the administrative side of the budgetary
process; and employs a quantitative approach to study the style of
decision making and the impact of this style on the annual
estimations of public expenditures in the federal budget. Therefore,
the major question of the paper is not concerned with the content of
these decisions (annual estimations) in a substantive descriptive and
normative manner, as in public finance studies, but rather with the
analysis of the outcomes of these decisions. This approach relates
---------------------------* Ahmed Mustafa Elhussein Mansour, Ph.D., is an Associate Professor,
Department of Political Science, Faculty of Humanities and Social Sciences,
United Arab Emirates University. His research interests are in public policy,
public budgeting, and public sector management.
Copyright © 2010 by PrAcademics Press
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the decisions of the government budget to the agenda of public policy
because public budgeting is a process of resource allocations for
public goals (William, 1980, p. 320). In fact a budget is a mirror which
reflects government policies and how those policies are funded.
The United Arab Emirates emerged as an independent state in
1971. The UAE political system is a federal one composed of a
federal government and seven highly autonomous Emirates
governments (i.e. governorates sing, in Arabic (Emara). These are Abu
Dhabi, Dubai, Shargah, Ajman, Ummelqwain, Rasellkhaima, and
Alfujaira. Each Emara has a governor. The government has three
layers of administration: the federal, the Emara and the local
municipality levels. The UAE Constitution created a relatively weak
federal government with limited political powers and revenues.
Constitutionally the federal government revenues come mainly from
the annual contributions of the seven Emirates governments and its
self-generated revenues. In practice only the rich Abu Dhabi and
Dubai contribute to the federal budget. The former contributes over
85% of the federal revenues.
Incrementalism in UAE federal budget is facilitated by two major
factors which contribute to complexity in the decision-making
processes. These are the structure of government and the budget
time span. The first factor is related to the policy making processes in
which informal and formal structures combine to make the system
highly pluralistic and complex. The informal structure of government
consists of networks of patron client relationships. Each Emara has a
governor who is usually the sheikh of the strongest tribe and at the
same time a member of the Supreme Council of Emirates Governors
which is the supreme legislative body in the country. Sub sheikhs of
smaller tribes work to connect their followers to the governors and
represent channels for demands for services and benefits. Since
sheikhs and sub sheikhs occupy official positions in the federal
government, the informal patron-client structure is integrated in the
formal one without losing its clear identity. This situation puts
considerable pressures on the federal budget especially for services
and employment. Since annual budget allocations establish benefits
for different social groups it is very difficult to change them drastically
without disrupting the patron-client relationship.
The second factor is related to the time span of the fiscal year in
UAE which starts in January. Since the preparation of the annual
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345
federal budget starts in April, budget officials have only eight months
for the whole budgetary cycle. Hence in many cases the budget was
behind schedule and the government resorts to the famous practice
of voting "twelfths" (one month's appropriations) to finance
government services while the ministries are struggling with budget
preparation and endorsement.
In this context the format of the line-item budget helps to simplify
the process of calculating annual expenditure estimation and
enhance tendencies toward incrementalism. The estimation of
annual allocations is based on uniformed expenditure line items
format which is mandatory to all government ministries and agencies.
These items are classified into two categories: current expenditures
and investment expenditures. Whereas the category of current
expenditures includes routine and repetitive allocations, the category
of investment expenditures contains the federal government financial
and capital investment. However, certain other factors make
incrementalism closer to Wildavsky's repetitive type of budgeting.
These include the fact that the federal budget has limited revenues
since it depends mainly on contributions from rich emirates. It has no
independent source of revenues apart from self-generated revenues
from government services fees and tolls which account for less than
5% percent of total federal revenues.
The process of budgetary decision making is watched and
coordinated by the budget division in the ministry of finance and
industry. Ministries, agencies and independent units prepare annual
estimations and present them to the budget division which negotiates
and discusses each ministry’s budget with its budget officers with
public policy and government priorities and sends it up to the council
of ministers. After latter ratifying the whole budget, the Council
passes it to the president who endorses it and issues it by a
presidential decree that is published in the official gazette. This paper
consists of an overview of the theories of budget decisions, and an
analysis of budget decision types by utilizing some of the statistical
models.
THE GENERAL FRAMEWORK OF THE STUDY: STYLES OF DECISION-MAKING
Public budgeting has been considered as an instrument of fiscal
policy, a management tool, a planning tool and an instrument of
accountability (Williams, 1980, pp.320-329). This complex nature
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makes literature on public budgeting run across many disciplines and
reflects the experiences of many countries. Therefore, this review
concentrates mainly on literature pertaining to the dimension of
decision-making styles in the budgetary process and draw on
comparative material from Arabic and English material.
The objective of this section is to discuss the main general
decision-making styles in public policy in general and budgetary
processes in particular. These styles can be classified into four
categories. First, the rational approach to decision making, including
its modified version of bounded rationality, originates in the
traditional managerial approach which depends on bureaucratic
organization to promote rationality. Second, the new public
management approach adopts a decentralized decision-making
formula based on market criteria and encourages considerable
degrees of subordinates' discretion. Third, the political approach
encourages some sort of a pluralistic style of decision making that
mainly relies on incremental decision making that only slightly
modifies existing policies positively or negatively. Fourth, the legal
approach favors an adjudicatory model to assess the legality of
decisions. Fifth, mixed scanning which is a synthesis of these
approaches, especially the rational and incremental approaches
(Rosenbloom, 2005, p. 313).
Although all these approaches are interrelated and relevant to
budgetary decision making, in this paper the literature review is
confined mainly to the discussion of two major competing approaches
to the styles of decision making in the budgetary process. These are
the rational and incremental approaches. Each of these two
approaches will be reviewed first in general terms and then as
applied to public budgeting.
Rationality and Program Budgets
Rationality as a Policy-Making Approach
The rational style or model of decision making coincides with the
general framework of the concept of scientific planning and
normative policy analysis (Weimer and Vining, 1999, p.256). It can be
defined as a logical process that can be used to translate policy
makers' intentions, goals and assumptions into suitable policies to
achieve targeted goals (Lawton and Rose, 1994, p.119). The
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347
rationality model of decision making includes two main interrelated
versions: comprehensive, or unbounded and bounded rationality
models. The difference between the two lies in the extent of
rationality, amount of information required and the range of options
considered in policy making. Whereas comprehensive or unbounded
rationality demands complete information and consideration of all
policy options, bounded rationality considers only a limited set of
options.
Unbounded rationality, also called economic comprehensive
rationality, is a model of policy making which seeks to maximize the
values of efficiency, effectiveness and economy in order to maximize
total benefits from government programs. Thus it represents the
fundamental behavioral postulate which underlies all optimizing
models of economic equilibrium paradigm. It also underlies the
Weberian ideal type of bureaucracy in which organizations are viewed
as being goal oriented and the decisions made within them are
intended to find the most efficient means of achieving goals (Jackson,
1983, p. 89).
In its ideal type form, the unbounded rationality approach
envisages a highly structured decision situation in which the rational
decision maker (a) identifies a policy problem on which there is
sufficient consensus among relevant stakeholders that the decision
maker can act on their behalf, (b) defines and ranks consistently all
measurable goals and objectives whose attainment constitutes a
solution for the problem, (c) identifies all policy alternatives that may
contribute to each goal and objective and forecasts all the
consequences of each alternative(d) compares these consequences
in term of criteria or goals (e) chooses the alternative or combination
of alternatives that would maximize the values earlier defined as
being most important (Hogwood & Gunn, 1990, p. 47). Thus the basic
axioms of the rational model are, therefore, that all behavior is goal
directed and that individuals, when making rational choices between
competing means of achieving goals, will always choose that
alternative which best serves the individual self-interest.
Different types of rational models are reviewed by Elinor Ostrom
(1968) who discusses other forms of rationality that modify the
generic ideal type by incorporating criteria such as institutional
transaction costs, or redefining political, social, organizational and
moral costs and benefits (see Dunn, 2004, p.48). In academia, the
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rational approach represents basic premises underlying the tools of
statistical decision theory, operation research, project appraisal, costbenefit analysis and economic policy analysis. Central and
development planning in the former Soviet Union, East Europe, and
many post independence new states is the most approximate
embodiment of this approach in governmental institutions.
The critics of rationality specifically target its basic tenets
especially its overemphasis on quantification (Halberstam, 1972, pp.
348-9), its unlimited information requirements, its assumptions about
existence and consensus over clear societal goals and criteria, and
the need to define and analyze all possible alternatives. Critics also
highlight its unrealistic assumptions about the presence of an
objective set of alternative courses of action whose outcomes can be
analytically arrived at and chosen according to technical, usually
economic criteria, (Cochran & Malone, 1995, p.52) and applied to the
uncertain and complex environment of policy making in government
(Stone, 2002; Mintzberg, 1976). In the political context of
government, rationality may work if all involved stakeholders and
decision-makers are in total agreement on values involved and they
agree on the nature of the problem and what the solution should look
like; that is to say no politics and conflict should be involved. Clearly,
that is an unrealistic assumption that may be only partially satisfied in
dictatorial regimes. This fact makes this type of decision making,
albeit theoretically, possible in central regimes.
However, these conditions may rarely be fulfilled in public sector
settings in complex pluralistic political systems characterized by
conflict over values, means and goals. However, it could be met in the
case of structured policy problems at lower executive levels of the
public sector, such as transportation issues, where the decisionmakers are one or few and there is consensus about the problem and
its solution. This is not the case of most public policy issues where
the problem is very often unstructured with blurred boundaries and
many decision makers and stakeholders and characterized by lack of
consensus on values or even on the definition of the problem itself
(Dunn, 2004, p.79). Even with structured problems the public
decision maker does not have the time nor will he be able to acquire
and process all information relevant to the problem.
Some critics find rationality as even unsuitable for business
environments, for example Tisdell (1975) argues that the approach
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349
makes a stronger assumption than is necessary to attain the most
preferable alternative. A similar line of criticism maintains that in
business decision making, decision-makers do not always intend to
maximize well -defined profit or growth functions (Cyert, Simon &
Trow, 1956; Cyert, Dill & March, 1958)
It is exactly this demanding nature of comprehensive rationality
that gives rise to Herbert Simon's bounded rationality as a substitute
to comprehensive rationality. Simon argues that decision-makers are
bounded by many constraints of time and cognitive ability that they
tend to “satisfice” rather than maximize in their decision making. He
coined the term satisficing to refer to acts of choice where "decision
makers seek to identify a course of action that is just "good enough";
satisficing was coined to accommodate in one word both the
concepts of satisfying and sufficing behavior to produce a "satisficing"
choice".
Satisficing is a decision-making strategy which attempts to meet
criteria for adequacy, rather than identify an optimal solution. Simon
suggests that decision-makers employ heuristics and rules of thumb
to make decisions simpler rather than follow strict rigid rules of
optimization. They do this because of the complexity of the decision
making situation, and their inability to process and compute the
expected utility of every alternative action. Deliberation costs might
be high and there are often other economic activities where similar
decision making is required (Simon, 1957).
Simon's ideas of bounded rationality and satisficing bring the
concept of rationality closer to incrementalism as developed by
Lindblom who agrees with Simon that policy choices rarely conform to
the requirement of economic rationality (Braybrooke & Lindblom,
1970). However, Lindblom argues that his critique of rationality
equally apply to Simon's rationality.
Rational Budgets
In reality most experiences of rational budgeting are based on the
concepts of bounded rationality and satisficing. Applied to budgetary
decision making, the budget decision maker must first determine the
objectives of his agency in operational measurable terms. Once
agency objectives are determined the budget decision maker has to
stipulate, scrutinize and evaluate some of the available programs to
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accomplish those objectives. It is highly unlikely that all the
alternatives are evaluated in practice. According to this approach
when considering the potential programs of the budget, the decision
maker has to evaluate some of the consequences of each program.
In the final step, the budget decision maker chooses the best of the
available alternative to satisfice the values of efficiency, economy and
effectiveness. Where the three values are not reconcilable, an
appropriate criteria to balance them may be employed.
The models of rationality develop and support certain types of
budget formats and recommend the use of technical tools to
estimate public expenditure and program validity. The generic format
of rational budgets develops gradually from the modest performance
budgeting into the more comprehensive planning programming
budgeting systems (PPBS). The evolution starts with the performance
budget which concentrates on the calculations of the number of work
units accomplished divided into the man-hours employed or the cost
of each activity (William, 1980, p.336). Program budgeting represents
the transitional step between the performance budget as a tool of
management and planning, programming, and budgeting systems
(PPBS) as a tool of planning.
The goals of PPBS provide clear illustrations of the rational model.
They include careful identification of goals and objectives in each
area of government activity; analysis of output of a given program in
term of its objectives; measurement of total programming costs, not
for just one year but for several years in the future; formation of
objectives and programs extending beyond the single year of the
annual budgets to long term objectives; analysis of alternatives to
find the most efficient way of reaching program objectives for the
least costs; establishment of analytical procedures to serve as a
systematic part of the budget review (Minmier, 1975). Zero-base
budgeting, which represents an antithesis of incrementalism, was
pioneered at Texas Instrument in 1969 following the prescription of
Peter Pyhrr (1977).
In essence all rational budgets are designed to address certain
perceived flaws of the traditional incremental budget. All versions of
program budgets and especially PPBS address the lack of rational
planning of public expenditure in the line- item budget. David Novick,
who is among the most ardent supporters of this style of program
budgets, argues that the essence of these budgets is the rational
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351
analysis of budgetary inputs (financial resources) and outputs
(government goals) to allow for comparisons between different
alternative programs. Hence the programmed budgets rationalize the
budgetary decision-making processes by especially using data in
analyzing budget decisions (Novick, 1979, p.5). On the other hand,
zero-based budgeting targets the use of the existing budget as a base
to estimate next year’s budget in the traditional budget by requiring
mangers to start their annual estimations from zero and justify their
whole budgets every year (Minmier, 1975, p. 8).
Public expenditures in these budgets are classified, unlike in the
line item budget, in programs and activities with already determined
measurable outcomes and outputs that reflect the operational
objectives of public policy. To ascertain the value of efficiency in
these programs, decisions should be based on rational quantitative
techniques like cost benefit analysis. It is not the budget format per
se that make the budget rational but rather the use of technical
decision-making tools such as Cost-Benefit Analysis (CBA) that
matters. The budget format only facilitates the use of technical tools.
In practice most rational policy and budgetary decision making is
based on (CBA).
The rational budgets lasted just a decade, from 1961 to 1971, in
USA government. The critics of these budgets, notably Gaither
(1968), Aaron Wildavsky (1979) and Allen Schick (1973), have
offered numerous explanations for the demise of these budgets in
USA but concentrated on the inadequacy of the rational model (Most
of these critical views were expressed in a symposium in Public
Administration Review, 29 (2) 1969, pp.111-202).
Although these budgetary innovations have originated in the USA,
they have been imported to many developing countries by American,
foreign and local experts trained in USA. However, despite their
demise in the 1970s in USA, these budgets appear again in many
developing countries especially in countries where the new public
management ideas are adopted as bases for administrative reform.
The most notable experiences in this respect are the examples of UAE
and Jordanian budgetary reforms.
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Incrementalism and the Line-Item Budget
Incrementalism as a Policy-Making Approach
The intellectual origins of incrementalism can be traced to the
works of Dewey (1933), Barnard (1938) and Simon (1965). However,
the concept of incrementalism has been articulated and made
popular by the intellectual contributions of Lindblom (1959),
Wildavsky (1964, 1968, 1975, 1979), Dhal (1961), Dye (1966),
Fenno (1966), and Braybrooke and Lindblom (1963). Lindblom, who
came to be associated with this approach, developed his approach in
the course of a critique of the rational comprehensive model in a
famous article published in Public Administration Review (Lindblom,
1959).
Incremental theorists argue that government decision -making
processes operate within political and highly complex environments
and therefore decision makers develop behavioral shortcuts to
simplify decision making (Ibrahim & Proctor, 1992). This is in fact an
echo to Simon's ideas of bounded rationality and satisficing. In fact
Simon's concepts of bounded rationality and satisficing are similar,
though not exactly identical, to incrementalism. The latter may be
considered as an application of Simon's concepts of bounded
rationality and satisficing. The difference between the two concepts
lies in the fact that bounded rationality, like comprehensive
rationality, supports the use of technical and computer-aided
techniques in making decisions (Hogwood & Gunn, 1984, pp. 49-52).
However, incrementalism is ready to accept a limited role for
technical tools, analysis and planning in the policy process (see for
example, Wildavsky, 1980). In incrementalism, decision making
depends on political bargaining and compromise and technical tools
could be used in that process.
By revising the basic assumptions of comprehensive rationality,
Simon's concepts of bounded rationality and satisficing pave the way
for incrementalism in that they show that perfectly rational decisions
are not often practical or possible due to limited time and finite
computational resources available for decision-makers who
encounter real problems in processing receiving, storing, retrieving,
and transmitting information (Williamson, 1980, p. 553).
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These facts limit the decision-maker's ability to formulate and
solve complex problems by using comprehensive rational
methodologies. In the real world, according to Simon, most decision makers do not always behave as rational beings but in many
instances they behave as emotional and irrational human beings and
psychological and organizational deficiencies combine to limit their
capacity for comprehensive decision making and lead them to
satisfice rather than maximize (Hogwood & Gunn, 1984, p. 50).
Therefore, the decision-makers tend to simplify their decision making
by restricting their options to those alternatives which deviate
marginally from the status quo and then select options that command
a consensus among decision-makers (Dahl, 1953). Thus incremental
policy choices will not disrupt the relationships between different
stakeholders in the political system.
In governmental environments, the built-in political processes of
negotiation, bargaining and compromise among many legitimate
participants in the policy arena are virtually the only way to get things
done. Further, the very characteristics of large-scale, complex
organizations foster incrementalism; these characteristics include
fragmentation, inertia, bureaucracy, conflicting goals, and financial
constraints. Finally, the legal system in government operates around
a set of established principles which also reinforce incrementalism.
As an approach to decision making, incrementalism, also labeled
disjointed incrementalism, seeks to produce decisions only marginally
different from past practice. This view can be simply reformulated in
the phrase "…in the end what happens during any given period
determines what will happen in future periods in a particular time"
(Jackson, 1983, p.16). Existing policies, the status quo, is considered
as a base and new making concentrates on marginal modification of
existing programs by adding to projects using many small (often
unplanned) changes instead of a few (extensively planned) large
jumps (Braybrooke & Lindblom, 1970). Policy makers tacitly agree to
continue previous policies and this fact wins the incremental
approach the tag of "muddling through" (Lindblom, 1961, pp. 297298).
The criterion used in incremental decision making does not
emphasize goal maximization, but rather administrative satisficing.
That’s to say that slight improvement as compared with past
performance is considered. Typically, only a narrow range of
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alternatives and consequences can be examined seriously, and even
those few are narrowed further by budget official past practice. The
policy chosen is likely to provide only a limited, short-term
amelioration of the concrete problem posed on the political agenda.
In this sense incrementalism is the antithesis of intrusive central
planning, which can create, according to incrementalists, rigid work
systems unable to deal with the actual problems faced at the
grassroots level (Garuda & Karnøe, 2003).
Incremental Budget
The incremental theory of decision making has been a major
element in budgetary literature since the 1950s. Influenced by the
writings of Simon and Lindblom, many scholars have adopted an
incremental approach in their studies (Wildavsky, 1979;, Fenno,
1966; and Davis et al., 1966). Applied to budgeting, incrementalism
can be simply interpreted to mean "this year's budget is a function of
the amount spent last year, i.e., last year's budget" (Jackson, 1983,
p.146). Therefore incrementalism as a method of budgetary decision
making concentrates on marginal changes (increments) from last
year's budget in estimating expenditures of next year’s budget.
Wildavsky, whose reputation is largely based on his debunking of
attempts to introduce rationality to government through the
introduction of rational budgeting techniques, asserts that all
budgeting is incremental (Wildavsky, 1979, p.5). Wildavsky considers
incrementalism as the best among budgetary decision tools because
it helps to simplify and achieve control over all aspects of the
budgetary process (Cochran & Malone, 1995, p.23). Using two major
variables of wealth and predictability, Wildavsky distinguishes
between four types of incrementalism. He argues, “Rich and certain
environments lead to incremental budgeting; poverty and
predictability generate revenue budgeting; unpredictability combined
with poverty generates repetitive budgeting; and riches plus
uncertainty produce alternating incremental and repetitive budgeting
(Wildavsky, 1975, p. 12).
In budgetary incremental decision making two factors are
perceived as specifically helpful in simplifying decision making and
coping with complexity. These are budgetary roles and aids to
calculations. Budgetary roles refer to the behavior of ministries and
central budget authorities. Whereas ministries try to expand their
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budgets beyond their present base, the budget central agency tries to
cut ministries' requests and push them back towards their base. Aids
to calculation refer to tools used by budget decision-makers to
simplify their decision making. Accordingly the budgetary decisionmaking process is viewed as the following (Ibrahim, 1993):
- Experiential: modifications of expenditures are based on
experience,
- Not comprehensive: the simple consequences of the program
are dealt with, the complex are avoided;
- Satisficing: budget decision makers do not intend to maximize
benefits but only look for “good enough” results;
- Incremental: only marginal increases or decreases are
considered.
The incremental approach is associated with the line item-budget
which classifies expenditures, unlike rational budgets, according to
the object or objects of expenditures that reflect what the agency is
planning to purchase rather than what the agency is planning to do.
Decision making is undertaken incrementally according to these
objects of expenditure, and the current year budget plus a percentage
increase for inflation. Then decision makers haggle for funds to do a
better job or take new roles (Wanat, 1974). Supporters of the
incremental budget list among its advantages the stability of the
budget and prospects for gradual change that permit managers to
operate their departments on a consistent basis; managers can see
the impact of change on their agencies quickly. Moreover, the system,
compared to rational budgets, is relatively simple to operate and easy
to understand and helps to avoid conflicts when departments appear
to be treated similarly. Co-ordination between budgets is easier to
achieve by negotiations and compromise.
Critics of the incremental budget highlight its failure to take into
account changing circumstances. Moreover, it encourages “spending
up to the budget” to ensure a reasonable allocation in the next
period. It also leads to a “spend it or lose it” mentality. Incremental
budgeting assumes activities and methods of working will continue in
the same way. Moreover, the list of criticism to incremental budgeting
includes no incentive for developing new ideas; no incentives to
reduce costs; encouragement of spending up to the budget limit so
that the budget is maintained next year for the agency will be
penalized by its savings which will reduce its annual base.
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The budget may become out-of-date and no longer relate to the
level of activity or type of work being carried out and “bad” programs
survive comfortably without review. Moreover, incrementalism may
lead to large budget deficits which dampen any enthusiasm for
tackling public sector problems on a grand scale. The priority for
resources may have changed since the budgets were originally set so
basing future allocation on previous allocations may hinder the
implementation of programs and build budgetary slack into the
budget which is never reviewed and adjusted. Under incrementalism,
managers may have overestimated their financial requirements in the
past in order to obtain a budget which is easier to work within and
which will allow them to achieve favorable results.
It should be noted that line-item budgeting is not the reason for
the dominance of incrementalism in budgetary systems, yet it is one
of its tools. Wildavsky explains the survival of the traditional budget,
despite criticisms launched against it, by its ability to respond to the
complex political nature of governmental environments (Wildavsky,
1978, p.30). However, the theoretical association of rational and
incremental models with certain types of budgets does not mean
necessarily that the decision style is determined by the type of budget
format used. Incrementalism may persist even if the type of
budgetary classification is rational and the two systems may coexist
as in the case of connecting the annual budget with development
planning in many third world countries.
The question now is "What evidence exists to support the concept
of incrementalism?" If the budget processes in different countries are
investigated, then it would appear that they conform to the basic
rules of incrementalism. For example, France has had since 1955
what is referred to as the service vote; that is, all past expenditures
are treated as a continuing commitment. The French Parliament only
votes on additions to and subtractions from past totals. In Japan, the
Ministry of Finance imposed a 125% ceiling on the previous year's
expenditure and when voting on next year's budget, plans of past
expenditures are never challenged or questioned (Jackson, 1983, pp.
151-152).
Empirical studies of budget decision making in several countries
support the above conclusions. For example, empirical studies in USA
such as the works of Wildavsky (1975), Fenno (1966), Davis,
Dempster and Wildavsky (1966-74), Crecine (1970), and Sharkansky
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357
and Hoffenberg (1969) conclude that incrementalism reproduces
itself in each stage of the budgetary cycle, not just at the formulation
stage. Bailey and O’Connor (1975) and Thomas Dye (1992), who
studied the USA budgetary process, conclude with similar findings.
The latter two studies have also attempted to provide an operational
definition of incrementalism which is lacking in other studies.
On the British budgetary process are the studies of Wildavsky and
Heclo, (1974) and Ibrahim and Proctor (1992a, 1992b, 1992c,
1993). By using different methodologies, all these studies have
substantiated incrementalism as the prevailing style of decision
making in budgetary processes.
Empirical Arabic studies which discuss directly the decisionmaking systems in Arab budgetary systems are rare. Most of these
are found in the Jordanian context. In fact, there are no such previous
studies on UAE budgetary decision making. Although most of the
available Arabic studies do not address the style of decision making
directly, they often conclude indirectly that incrementalism is the
order of the day. For example, Ibrahim and Ghageesh (1998) studied
the budget of Al-Mafraq Municipality in Jordan and using an analytical
descriptive methodology and concentrating on budgetary procedures
they concluded that the municipality's budget is prepared along
incrementalist lines. In a similar Jordanian study conducted by
Al‘annani (1990) on the role of the budget in managing public
enterprises in Jordan, the study concluded that
budgetary
estimations are based on personal judgments and on addition of
certain percentages to existing estimations.
In two studies conducted by Alzau'abi (1996) and Elhussein
(2001), which unlike the previous studies concentrated on the
Jordanian central government budgets, both authors attributed the
variance in budget estimations to the incrementalist style of decision
making and the lack of coordination between government programs
and their plans. With the exception of Elhussein's study all the above
studies lack an operational definition of incrementalism.
Another important study which has noticed the incremental
nature of the decision-making style in the Jordanian budgetary
process is Kharabsha’s study (2000). This study adopted an
operational definition to incrementalism founded on the role played
by political and social factors in shaping the style of decision-making
358
ELHUSSEIN
in the Jordanian budget. The study concluded that these factors
enhance incrementalism in the Jordanian budgetary system. Other
relevant studies on the Jordanian scene, which did not concentrate
directly on budgetary decision-making styles, include Alshibbli (1993)
and Allawzi (1997). Both studies indirectly uncovered some aspects
of incrementalism in the Jordanian budgetary system.
RESEARCH DESIGN
The Research Question
Public budgeting has assumed a central place in official political
concerns in Arab counties due to the problem of increasing public
expenditures and foreign debt. This problem has many political,
economic and social facets, yet it has not received due concern from
Arab social scientists and researchers. Nevertheless, the
administrative side, and especially the styles of budgetary decision
making, remained largely outside the realm of academic debate in
public administration. For this reason, this study concentrates on this
side by raising the question what is the style of decision making used
by the UAE federal decision-maker to estimate annual budgetary
expenditure estimations? Is it incremental or rational?
Naturally, the decisions of expenditure appropriations are taken,
in the context of the UAE budgetary process, at many administrative
and governmental levels involving several stages in the budgetary
cycle: preparation, formulation, enactment, execution and control.
These decisions involve processes that start from the smallest agency
in the federal structure and go up in the hierarchy to the summit of
the administrative and political system. Active actors in the budgetary
decision-making system differ from one level to another. Since this
study concentrates on the UAE federal level as a whole, its analytical
efforts involve the final budgetary decisions that are included in the
final budget documents (1990-2005) as published in the official
Gazette. The figures of these budgets are not adjusted to inflation
rates during the years under study for two reasons: first, the paper
seeks to study the intentions of decision-makers rather than the real
values of budget appropriations and policy contents; and second,
budget decision-makers in the UAE federal government are requested
to take into account the rates of inflation in their annual estimations.
UNITED ARAB EMIRATES FEDERAL BUDGETARY PROCESS: THE DECISION-MAKING STYLES
359
Research Hypotheses
There are two major research hypotheses in this study:
Hypothesis 1: The style of decision making in the UAE budgetary
expenditure as a whole follows an incremental pattern.
Hypothesis 2: The UAE federal ministries adopt an incremental style
in deciding their annual expenditures.
The later hypothesis is divided into 17 sub-hypotheses related to
individual ministries in the UAE federal government. These include (1)
Defense, (2) Interior, (3) Justice, (4) Planning, (5) Oil & Energy, (6)
Economy & Commerce, (7) Foreign Affairs, (8) Information & Culture,
(9) Higher Education, (10) Education & Youth, (11) Health, (12) Public
Works, (13) Communications, (14) Electricity & Water, (15)
Agriculture & Fishery, (16) Labor, and (17) Social Affair.
The first hypothesis considers the general pattern of decision
making in the UAE federal budget using the total budget estimations
in the period 1990-2005. It hypothesizes an incremental style of
decision making in which the estimations of next year expenditures
are determined by the estimations of the year immediately preceding
it. The second hypothesis traces the nature of this incrementalist
decision-making pattern to the ministerial annual budgets using the
total allocations in the period 1990-2005. This hypothesis means
from an operational point of view that the decision-maker has three
options: (a) to preserve the status quo (current level of expenditures),
(b) reduce current level of expenditures by a small margin and (c)
increase the current level of expenditures by a small margin. An
important point to note here is that the falsification of the first and
next hypotheses does not necessarily mean that the budgetary
decision style is rational. Therefore the null hypothesis for the two
hypotheses is that “the UAE budgetary decision maker does not take
into consideration the present budget in estimating next year
budget.”
Research Methodology
The paper uses the SPSS and Excel programs to analyze data
employing models used in non-Arabic literature. Several statistical
models are used to study the style of budgetary decision making in
different contexts. These models range from descriptive statistical
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ELHUSSEIN
models using percentages and measures of central tendency to linear
regression models employing inferential statistics. These models
differ in the kind of operational definitions they present to
incrementalism. In discussing these models, this study benefits from
the discussion in Ibrahim and Proctor’s study (Ibrahim & Proctor,
1992) in which the authors review a number of models used in
analyzing budgetary decision making in different countries. They used
these models to analyze the budgets of three municipal councils in
the United Kingdom. The present paper employs two of these models,
the magnitude of change and the stability models.
The Magnitude of Change Model
This model is based on an operational definition of
incrementalism that concentrates on the annual percentage change
in budgetary allocations. This model was used by Aaron Wildavsky
and Richard Fenno to study the budgetary decision making in the
United States of America, but they did not specify the annual
percentage change that can be considered incremental. This job was
carried out by Bailey and O’Connor (1975, pp.60-66) in their study in
which they compared their results with those of Wildavsky and
Fenno’s study. The definition of incrementalism in this paper is
borrowed from their study.
The Stability Model
This model defines incrementalism by the degree of stability in the
pattern of budgetary outputs over time. If this pattern is determined,
then the incremental nature of the budget can be detected by tracing
this pattern over a long period of time. If the outputs of the budgetary
system coincide with the determined incrementalist pattern, then it
could be described as stable. This model can be mathematically
represented by the following linear regression equation.
t =  + t-1 + e
Where:
t, (dependent variable) represents budget expenditure in year t.
, represents the intercept term (i.e. the value of the constant in
the regression equation).
, is the regression coefficient (i.e. constant percentage from the
base Y).
UNITED ARAB EMIRATES FEDERAL BUDGETARY PROCESS: THE DECISION-MAKING STYLES
361
t-1, is the independent variable (i.e. the budget expenditure in
the previous year.
e, is a random error of time.
This model uses the value of the coefficient of determination (R2)
in the regression equation to measure the degree of stability of the
incremental pattern because it measures the variance in the
dependent variable that can be explained by the independent
variable. This study uses the magnitude of change model to analyze
sample data to determine the existence of incrementalism. Then the
stability model is used to test the degree of stability of
incrementalism at both the total and ministerial levels of decision
making the in the UAE budgetary system.
Operational Definitions
Dependent Variable: the expenditure estimations of a specific year.
Independent Variable: the expenditure estimations of the previous
year.
Incrementalism: Style of decision making that uses the previous
budget as a base to estimate the expenditures of the next budget.
The basic premise of the theory of incrementalism in budgeting is
that expenditure changes occur at the margin with the status quo, so
that expenditure at time t is marginally different at time t+1.
Increment: the annual marginal increase or decrease in the
expenditure estimations of a certain budget. It is measured in this
study by subtracting the estimations of a certain year from the
estimations of the previous year.
Measurement Criteria: To distinguish between incremental and nonincremental annual estimations the study uses Bailey and O’Connor’s
criterion which distinguishes between incremental, non incremental
and intermediate situations according to the following criteria:
-
0-10 percent incremental
11-30 percent intermediate
Over 31 percent non incremental
Although the two authors have provided percentages to indicate
incremental and non-incremental situations, they have not specified
the rationale for their scheme beyond their reference to previous
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ELHUSSEIN
research by Wildavsky and Fenno. However, in the absence of a valid
operational definition of incrementalism, the scheme seems to be
reasonable, especially when governments specify an increase or
decrease of expenditure between 5-10 percent to be applied across
the board. Moreover, while a change between 5 to 10 percent does
not constitute a drastic shift in expenditures, a change of more than
31 percent involves one third of the budget. Moreover, the two
authors’ scheme considers only positive changes in expenditure
(increases) and neglects negative changes (decrease). Operationally
speaking the above scheme can be translated as follows.
- A consistent annual increase of ±10% implies an incremental
decision-making style. This range includes positive and negative
values and therefore a decision to increase or decrease an
agency budget in the range of ±10% represents an incremental
decision. Likewise the decision to preserve the status quo (i.e.
zero increment) is also considered an incremental decision.
Therefore if the majority of budgetary decisions during the time
interval of this study (i.e. more than 51% of all decisions) in a
specific agency fall within this range, then the dominance of the
incrementalist style of decision making is implied.
- Annual increments ranging between ±11% and ±30% represent
intermediate situations between incremental and nonincremental styles of decision making. This intermediate range
indicates medium increases or decreases in the agency budget
and supports the dominant style of decision making. If the
general style is incremental, the intermediate range represents
a small and acceptable deviation from the dominant pattern and
the opposite is true.
- Annual increments equal to or more than ±31% represent a nonincremental style of decision making and imply shifting and
unstable government policies. The dominance of this range does
not suggest a rational decision making process but rather a
process in which the decision-maker does not or little relies on
previous budget decisions.
- The study population is composed of the annual budgets of the
UAE federal government since its establishment in 1971 (35
budgets).
UNITED ARAB EMIRATES FEDERAL BUDGETARY PROCESS: THE DECISION-MAKING STYLES
363
- The sample framework is the annual public budget laws which
are published in the UAE Official Gazette. These laws represent
the final stage in the budgetary process before its
implementation.
- The sample represents the budgets of the years 1990-2005 (16
budget documents).
THE STYLE OF DECISION MAKING IN THE UNITED ARAB EMIRATES FEDERAL
BUDGET: DATA ANALYSIS AND HYPOTHESIS TESTING
Description of the Sample Data
This section concentrates on describing the sample data using
percentages to trace the course of annual changes of budgetary
allocations during the period 1990-2005. The annual percentage
changes and percentage ranges are calculated to the total budget's
allocations as well as to individual ministries' allocations. These
percentages are computed using Microsoft Excel according to the
following equation:
Yt - Yt-1/Yt -1*100
Where:
Yt refers to the current budget, and
Yt-1 indicates the previous budget.
Table 1 shows the results of these computations. The tables
show a clear incremental pattern in both the allocations of the total
budget and individual ministry’s budget. The tables also show that the
federal total budget expenditures have a regular incremental pattern
with all the observation falling within the incremental range of ±10%.
On the other hand, the tables show that the traditional ministries
have a clear incremental pattern. In fact the course of annual
budgeting in the Ministry of Defense is similar to what Aaron
Wildavsky calls “repetitive budgeting” (Wildavsky, 1975, p.12). This is
because the annual percentage change from the base in the defense
budget is zero for almost all years and it went slightly down on two
occasions to (-3.43%) in 1992-93 and up to (3.44%) in 1996-97. This
may be explained by the fact that a substantial portion of the defense
budget is not disclosed in the budget document because it is
considered secret military information. The annual percentage
change of expenditures in the Ministry of Interior reflects a regular
364
ELHUSSEIN
TABLE 1
Annual Change of Budgetary Allocations: 1990-2005 (in %)
Year
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-2000
2000-01
2001-02
2002-03
2003-04
2004-05
Total
Budget
4.91
5.87
1.46
0.00
1.80
1.70
8.81
7.70
7.09
0.90
-1.97
2.18
0.54
2.59
-4.94
Year
Oil &
Energy
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-2000
2000-01
2001-02
2002-03
2003-04
2004-05
236.79
-70.28
8.60
0.00
-4.65
6.19
0.77
-0.16
-4.70
11.09
8.68
-2.57
9.34
8.33
78.08
Defense Interior
0.00
0.00
-3.43
3.55
0.00
0.00
3.44
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.73
2.26
1.36
0.00
3.66
8.20
9.76
1.11
-2.84
2.51
3.26
-2.92
0.00
0.81
-4.03
Ministry
Justice
Finance & Planning
Industry
15.19
9.78
2.14
0.00
4.67
2.33
189.80
4.86
4.70
11.74
5.10
4.42
5.96
11.03
-3.30
-1.21
3.43
9.89
0.00
4.69
-0.83
8.55
7.50
-2.06
21.20
12.45
15.73
7.44
-1.54
-7.81
2.05
2.20
1.60
0.00
58.92
-30.08
-0.57
4.31
-5.00
12.04
3.28
8.05
-3.70
9.00
NA
TABLE 1 (Continued)
Ministry
Econo- Foreign Information Higher
Education
Affairs
my &
& Culture Education
Commerce
7.73
3.68
5.79
0.00
28.66
1.73
17.72
-3.01
-3.02
16.43
3.15
9.09
3.48
6.06
58.24
7.34
7.28
4.48
35.70
-20.26
11.50
4.37
9.11
-2.70
6.82
2.72
3.13
14.49
9.39
5.41
10.32
13.67
-4.05
0.00
-9.63
-59.67
11.82
9.98
-5.09
17.15
-0.31
-2.31
2.36
0.00
-7.69
359.18
25.02
1683.71
0.00
-4.94
1.97
1.68
0.57
-5.00
-0.57
-0.45
0.00
0.95
3.77
1320
7.51
5.35
-0.16
0.00
10.00
3.85
13.69
2.83
2.25
7.79
2.90
5.59
2.67
3.13
5.07
UNITED ARAB EMIRATES FEDERAL BUDGETARY PROCESS: THE DECISION-MAKING STYLES
365
TABLE 1 (Continued)
Year
Health
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-2000
2000-01
2001-02
2002-03
2003-04
2004-05
8.80
7.57
4.56
0.00
6.59
2.84
7.68
5.24
-4.71
8.34
3.85
0.00
1.85
3.03
-36.47
Ministry
Public Communi- Electricity Agriculture Labor
Works cations
& Water
0.03
41.53
53.78
6.09
19.18
7.75
-12.15
1.17
0.46
1.97
8.28
-21.23
-0.33
3.37
1.10
0.00
0.00
0.00
0.00
0.00
-5.83
-16.05
-36.92
-0.62
0.90
2.41
6.82
-14.45
0.88
0.17
9.97
-31.30
7.47
6.27
23.61
2.85
5.62
18.88
0.47
1.62
-5.00
-4.84
-5.00
-4.00
-2.67
17.31
6.17
-98.14
11.09
4.22
6.31
-1.73
0.00
2.81
1.65
0.00
9.89
8.37
0.86
1.74
0.00
-25.41
16.56
0.51
3.08
16.67
39.34
-1.37
1.84
3.10
0.00
4.28
N/A
-3.94
-1.45
incremental decision-making pattern similar to that of the total
budget. The Ministry of Education, Labor, Health, Agriculture and
Fishery, and Public Works have also a similar pattern despite the
differences in their annual percentage changes.
A slightly less stable pattern of incremental decision making can
be detected in other ministries like the Ministries of Finance and
Industry, Planning, Information and Culture. The other ministries show
relatively high unstable incremental patterns because each
experienced one or two tremendous shifts from their bases which
disturbed the regularity of their incremental decision making. The
highest shifts from the base are recorded in the cases of Higher
Education, Electricity and Water, and Oil and Energy budgets. The
Higher Education budget experienced three tremendous shifts of
(359 %) in 1990-91, (1683.71%) in 1992-93 and (1320%) in 200405. These tremendous shifts are explainable by the emphasis which
the government put on higher education as a priority of public policy
and the administrative reorganization undergone by the Ministry of
Higher Education thereof.
366
ELHUSSEIN
The negative shifts in the cases of Electricity and Water, Oil and
Energy, and Information and Culture were due to the gradual
privatization of the former and administrative reorganization of the
latter two. These shifts explain the wide percentage ranges in the
budgets of these ministries. The Ministry of Justice exhibited an
incremental pattern with a big shift of (189.80%) in 1996-97 that
formed a new base for its incremental course of decision making.
Hypotheses Testing: The Magnitude Model
Hypothesis 1: The style of decision making in the UAE’S federal
budget as a whole follows an incremental pattern.
Hypothesis 2: The UAE’s federal ministries adopt an incremental style
in deciding their annual expenditures (this hypothesis is divided
into 17 sub-hypotheses related to individual ministries in the
UAE’s federal government).
To test the first and the second hypothesis under the magnitude
model the annual percentage changes in Tables 1 are sorted out
according to our operational definition of incrementalism into
incremental, intermediate and non incremental categories. The
results of these computations are shown in Table 2: All budget
decisions in the period 1990-2005 for the UAE total budget fell within
the incremental range of ±10%. Therefore, according to the
magnitude model the first research hypothesis is accepted. This
result confirms our previous analysis.
Table 2 also shows that the same level of incrementalism is enjoyed
by the Ministries of Defense and Interior with 100% of their
observations falling within the incremental category. In fact with the
exception of the Ministries of Communications and Electricity no
budget scored less than 73% in the incremental category. Even the
scores of Communications and Electricity and Water in the
incremental categories represent more than half their observations.
However, for all these ministries, with the exception of Higher
Education, Communications and Electricity and Water, the modal
score in the intermediate category is 7%. The non-incremental scores
of these three ministries are less than 22%. Therefore, overall, it is
possible to conclude that all the budgets of individual ministries are
more or less incremental. This leads us to conclude again that the
magnitude model substantiates the second hypothesis.
UNITED ARAB EMIRATES FEDERAL BUDGETARY PROCESS: THE DECISION-MAKING STYLES
367
TABLE 2
Magnitude Model Frequencies of Incremental, Intermediate
and Non-incremental Changes (1990-2005)
Total
Incremental Intermediate
Non
Cases
0- 10%
11- 30% Incremental
Over 30%
Cases % Cases % Cases % Cases %
15 100
0
0
0
0
15
0
Defense
Interior
15 100
0
0
0
0
15 100
Justice
11 073
3
20
1
7
15 100
Finance & Industry
12 080
3
20
0
0
15 100
Planning
11 079
2
14
1
7
14 100
Oil & Energy
11 073
1
7
3
20 15 100
Economy & Commerce 11 073
3
20
1
7
15 100
Foreign Affairs
11 073
3
20
1
7
15 100
Information & Culture
11 073
3
20
1
7
15 100
Higher Education
11 079
1
7
2
14 15
0
Education & Youth
14 093
1
7
0
0
15 100
Health
14 093
0
0
1
7
15 100
Public Works
13 087
2
13
0
0
15 100
Communications
8
054
5
33
2
13 15 100
Electricity & Water
8
056
3
22
3
22 14 100
Agriculture & Fishery
14 093
1
7
0
0
15 100
Labor &Social Affairs
13 087
2
13
0
0
0 100
Ministry
The Stability Model
The previous descriptive analysis using the magnitude model
establishes clearly the existence of the incremental pattern of
decision making in the UAE budgetary process. Nevertheless, the
question is to what extent is it possible to generalize those results to
the whole population of the study and to ascertain the stability of this
incremental style? To that purpose the study uses the stability model
which tests the stability levels of budgetary outputs over time. The
conceptual definition of incrementalism in this model is “the degree
of stability in the patterns of budgetary outputs overtime”. If the
underlying incremental pattern is detected in the data, then the
incremental style of decision making can be substantiated by
ascertaining the adherence of budgetary outputs over time to that
pattern. Therefore, if the pattern of the UAE budgetary outputs at both
the total and ministerial levels is perfectly compatible with the
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ELHUSSEIN
detected incremental pattern, then one may conclude that it is
perfectly stable. As the number and magnitude of deviations from this
detected pattern increase, the levels to which that budgetary process
uses an incremental style of decision making decreases. This model
concentrates on the absolute allocation levels rather than on the
configuration of longitudinal change or on any decision rule
underlying the budgetary process. (Ibrahim & Proctor, 1992, p. 21)
In a budget with a perfectly incremental style of decision making
all annual allocations would be exactly on the regression line
indicating that all allocations are perfectly compatible with the mean
pattern of output. To test the stability of the incremental style of
decision making in the UAE budget the study uses the value of (R2) as
a measure of the statistical fit of the data to the regression line. It
shows the extent to which the independent variable is responsible for
the variations in the dependent variable. Therefore low and high (R2)
values indicate low and high levels of stability, respectively. In social
science research the value of (R2) between 40% and 60% is
considered to be high (O’Sullivan & Rassel, 1995, p. 418). The results
of regression analysis to the UAE budget data is shown in Table 2.
Table 2 shows that with the exception of Higher Education (R2 =
0.24%) and Oil and Energy (R2 = 0.5%), the total budget and all other
ministerial budgets scored (R2) values higher than the specified range
of 40%-60%. Expectedly, the incrementalist pattern is very stable in
the Total Budget (R2 = 90%), Labor and Social Affairs (R2 = 91.8%),
Agriculture and Fishery (R2 = 90.3%), Education and Youth (R2 =
98.2%), Foreign Affairs (R2 = 91.6%) and Justice (R2 = 91%). The
incrementalist pattern is also relatively very stable in Public Works (R2
= 89.4%), Finance and Industry, Economy and Commerce (R2 =
80.3%).
The remaining ministries scored (R2) values between 78% and
49%. The low (R2) values in the ministries of Higher Education and Oil
and Energy do not mean the absence of incrementalism in the
budgets of these ministries because as already seen in the previous
analysis that incremental frequencies in their budgets are 73%.
However their low (R2) scores reflect the instability of incrementalism
in their budgetary decision making. In fact their low (R2) values are
caused by the outliers in their data sets that resulted from few
occasions of tremendous shifts in their budgetary process (Table 3).
These shifts represent drastic changes in the federal government's
UNITED ARAB EMIRATES FEDERAL BUDGETARY PROCESS: THE DECISION-MAKING STYLES
369
priorities rather than changes in their incremental style of decision
making.
Results and Recommendations
The study concludes that the UAE budget decision-maker employs
an incremental style which is very stable in some ministries and
moderately stable in others. The general picture of the total federal
government budget reflects an incremental model that is very stable.
This result is similar to findings of Arabic studies in Jordan cited in
this paper because of similarities in the types of political systems and
budgetary processes. However, unlike studies undertaken in British
and American contexts, the UAE federal budget reflects a sort of
repetitive budgeting and this fact is explainable by differences in
political systems and the types of elite-mass relationships.
Incrementalism at the ministerial decision-making level in the
UAE uses an incremental style of decision making in all ministries
except the Ministries of Higher Education and Oil and Energy.
TABLE 3
The Stability Model
Ministry
Defense
Interior
Justice
Finance & Industry
Planning
Oil & Energy
Economy & Commerce
Foreign Affairs
Information & Culture
Higher Education
Education & Youth
Health
Public Works
Communications
Electricity & Water
Agriculture & Fishery
Labor &Social Affairs
Total Budget
R2
t-test
F-test p-value

63.5 21200
4.940 24.408
000
78.9 45609
7.221 52.147
000
91.0 31996 11.928 142.271
000
87.6
5236
9.954 99.076
000
47.3
602
3.417 11.679
005
0.5
176
0.271 00.073
790
80.3
2532
7.559 57.141
000
91.6 19413 11.879 141.122
000
56.2 -10390 -4.235 17.934
001
0.24 37846
2.079
4.323
0.06
98.2 15604 27.796 772.608
000
49.1 33610
3.672 13.480
003
89.4
2341 10.843 117.579
000
58.9 -1766
4.479 20.064
001
75.4 -87210 -6.317 39.905
000
90.3
2298 11.409 130.176
000
91.8 25156 12.481 155.786
000
90.3 579707 11.388 129.692
000
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ELHUSSEIN
Incrementalism in the latter two, though present, is not very stable
indicating big shifts in public policy. The UAE federal government has
undertaken ambitious plans in higher education that created positive
tremendous shifts in budget allocations.
The incremental style of decision making at both levels of the
total budget and ministries is characterized by a high level of stability.
This result proves that the budget decision-makers are concerned
with the ceiling for the government budget which is determined by the
higher levels of government. This result is, in fact, due to the weaker
position of the federal government in relation to emirates
governments. This situation has made the federal government
dependent on emirates governments' contributions and forced to
conduct budgeting with limited sources of revenues. Consequently,
most of its budget decision making is characterized by repetitive
incrementalism.
The low-level of stability in some ministries reflects the instability
in government policies in which goals change and this is reflected on
ministerial budget allocations which lead to the instability of the
incremental style of decision making in some ministries. This fact is
clearly illustrated by the budgetary course of the Ministries of Higher
Education and Oil and Energy, Electricity and Water. Traditional
ministries like Justice, Interior and Foreign Affairs and Agriculture
reflect a highly stable incremental pattern which can be explained by
the importance and centrality of these ministries in the UAE
governmental system.
Recommendations
Since the UAE federal government is planning to introduce and
establish a program budget, the author does not consider this
endeavor will change the incremental style of decision making in the
federal budget. This is because of the UAE administrative and political
structures which encourage the incremental style of decision making.
Although the outcome of this proposed rational budget system is yet
to be seen, one would think that incrementalism would continue to
prevail underneath. This is because the ministries will continue to
look at their previous budget as a base for their success in the
system of decision making. Therefore, the author presents the
following recommendations to those concerned with executing
UNITED ARAB EMIRATES FEDERAL BUDGETARY PROCESS: THE DECISION-MAKING STYLES
371
programmed budgeting in the United Arab Emirates Federal
Government:
- Incrementalism encourages the use of bargaining and
negotiation in making decisions and therefore the author
recommends that decision-making forms in the programmed
budget should be designed in a way that reflects the relationship
between programmed goals and the money required to fund
them in a quantifiable manner.
- The accounting system in incrementalism is based on the
concept of legality of expenditures according to budget
appropriations and this leads to neglecting performance
effectiveness; therefore, the author recommends the
establishment of a government accounting system that is based
on program evaluation in addition to legality of expenditures.
- Concentration on legality of expenditures in the incremental
system leads to lack of monitoring of the budget’s execution;
therefore, the government should establish a review and control
system based on periodical evaluation of performance and
assessment of achievements in terms of objective rather than in
terms of the legal expenditure of appropriated funds.
- The incremental system is based on the status quo (previous
budget) in making new budgetary decisions; therefore, it is
important to require ministries to justify their previous
expenditures annually.
The incremental style of decision making encourages ministries
not to save money, and this leads to punishing ministries that
achieved savings in previous budgets by reducing their base (status
quo) on which new budgetary decisions will be based. Therefore, it is
important to establish a system of performance evaluation that
encourages and rewards ministries which achieve savings in their
budget appropriations.
CONCLUSION
The importance of the study resides on the fact that empirical
studies of the budgetary process are rare in Arabic public
administration literature. Therefore, the concentration of the paper on
the administrative decision-making dimension in public budgeting is
372
ELHUSSEIN
intended to contribute to the one dimensional literature of public
budgeting in the Arab World which considers public budgeting as a
topic to be only studied by the disciplines of accounting and public
finance
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