Exploring the Factors for Budget Stability and Punctuations: A Preliminary Analysis of State Government Sub-Functional Expenditures

Disproportionate information processing theory asserts that sudden, dramatic changes punctuate otherwise stable growth patterns in U.S. policy and budget processes. The present paper uses state government sub-functional expenditures to explore what factors cause budget stability and punctuations. First, the findings in the present paper generally confirm the observations made in other studies that distributions of governmental budgets are Paretian. Second, while future research is warranted to identify more specific causes, this preliminary analysis suggests that institutional frictions and information oversupply tend to increase both budget stability and punctuations. It also suggests that availability of efficient information reduces budget stability but not necessarily budget punctuations. However, when examined at the level of different fund-type expenditures, which have differing degrees of institutional friction and availability of information that can be efficiently processed, more subtle and distinguishable differences in patterns of budget stability and punctuations emerge, which was not accounted for in disproportionate information processing theory.