The Use of Zero-Base Budgeting in Local Government: Some Observations

The use of Zero Base Budgeting (ZBB) as a management tool in the public sector has increased significantly since 1972. Recent surveys have indicated that 12 state governments, several municipalities, and the federal government have implemented a ZBB system. The experiences of ZBB users in the private sector from the perspective of individuals who have implemented such systems has been well documented in the literature. In contrast, little has been written about the appropriateness and effectiveness of using ZBB in the public sector. This paper attempts to partially bridge the knowledge gap on the use of ZBB in the public sector by reporting the findings of a research project exploring the use of ZBB in local governments. Findings reported herein are concerned with (1) the extent to which ZBB is used in municipalities, (2) an analysis of the structure of the ZBB process in practice, (3) the characteristics of user cities and the rationale for their use of ZBB, and (4) the benefits and problems associated with the implementation of ZBB in the public sector.