TOWARD A PRACTICAL AND

OPERATIONAL THEORY OF
THE BUDGET FOR
DEVELOPING COUNTRIES
Whatever methods or criteria arrived at
should provide an answer to “what norm
of expenditure is consistent with the
state of progress achieved at present by
the society”
If planning is to be "overall", it must devise
techniques for balancing values within a
framework that gives due regard to the
diverse interests of the present and the
future.
in a developing country like the Philippines,
the Appropriations Bill expresses a social
consensus which sounds akin to the mystic
doctrine of the "general will.“
choices have to be made between the demands
of the different groups and factors, aside from
making the estimates of the relative political
strength of contending groups that frequently
enter into the decision.
General Appropriations Act PD1177
shall be presented in the form of budgetary programs and
projects for each agency of the government, with the
corresponding appropriations for each program and project,
including statutory provisions of specific agency or general
applicability. The General Appropriations Act shall contain an
itemization of personal services which shall be prepared by
the Secretary before enactment of the General
Appropriations Act.
Specifically, a number of questions may be asked in
this respect, most significant of which are:
• Who finally sets and decides on priorities?
• What are the bases/criteria for the prioritization? To what extent and how
do citizens participate in this area?
• What techniques/tools are employed in the process or prioritization or
selection? (e.g. feasibility study, cost/benefit Analysis, Cost/Effectiveness,
etc.)
• How is the social desirability/utility of the approved program/projects
measured?
• What happens if programs/projects which were deprioritized originally,
turn out, by popular demand, to be programs which are really needed by
the people? Will there be a reallocation of resources during the execution
phase of an approved national government budget?
Lewis contended that budget authorities could
arrive at an economic theory of budgeting
following these principles
1. Since resources are scarce in relation to demands, the basic economic
test which must be applied is that the return from every expenditure
must be worth its cost in terms of sacrificed alternatives. Budget analysis,
therefore, should be basically a comparison of the relative merits of
alternative uses of funds.
2. Incremental analysis (i.e. analysis of the additional values to be derived
from an additional expenditure) is necessary because of the
phenomenon of diminishing utility. Analysis of the increments is
necessary and useful only at,or near the margin; this is the point of
balance at which an additional expenditure of any purpose would yield
the same return.
3. Comparison of relative merits can be made only in terms of relative
effectiveness in achieving a common objective.
Soberano budget theory
A Positive Government - This is committed to actively
formulate programs in fulfillment of societal balance
necessary for the good life. It is a government that is
established and sustained according to its performance
in preserving the public interest (underscoring
supplied) and dedication to the cause of public service.
Scientific Policies - This is able to ascertain in popularly
understood terms the requisites for the good life, the
delimitations of the public interest, and the nature of the
societal balances for which it is organized. These are policies
which have operations and processes open to precise
verification and validation in every significant aspect of
performance, and whose ranks and positions are accessible
and are open for popular, knowledgeable competition.
An Abundant Economy - This assures everybody the optional
level of welfare consistent with resources availability,
technological progress, population policy, and ultimate human
creativity. No artificial scarcities are imposed on account of
doctrine other than the logical necessities governing production
and civilized social living.
A Responsive Society - This is directed towards the
propagation of the common good, keen awareness of rights
and entitlements amidst the possibilities of organized life. It is
responsible for its performance according to the rules of
civility and is knowledgeably prepared to reciprocate benefits
received with services rendered.