Bottom-up budgeting: a path to public sector efficiency

Zero-base budgeting also has the potential to foster innovation within the public sector. Traditional budgeting often focuses on maintaining the status quo; departments may feel pressured to request only slight increases or decreases in order to avoid political scrutiny. Zero-base budgeting, however, invites a more entrepreneurial approach by encouraging agencies to propose alternative ways to achieve their goals.

By re-examining how services are delivered – not merely how much they cost – governments can discover new methods that are both cost-effective and more responsive to community needs.

Zero-base budgeting is more time-consuming than incremental budgeting, and it demands substantial analytical capacity from both managers and finance staff. Agencies accustomed to stable budgets may initially resist what they perceive as a disruptive process. However, these challenges can be mitigated through phased implementation, appropriate training, and effective use of digital tools that automate much of the analytic work.

Governments that have adopted zero-base budgeting typically do so on a rolling basis, reviewing different departments each year rather than restructuring the entire budget simultaneously.

Ultimately, the case for bottom-up budgeting rests on a simple principle: public money should be spent in ways that demonstrably serve the public good. Zero-base budgeting provides a systematic method for ensuring that.