The Capital Budget: History and Future Directions

Abstract

While there is a substantial body of literature concerning capital programming and budgeting in the private sector, there is only a modest literature on this subject in the public sector. Government researchers and public administration scholars have, for about seventy‐five years, recognized the value of budgeting for operating expenses and have tried to develop theoretical frameworks for the public budgeting process. However, very little of this attention has been devoted to capital budgeting. As Alan Steiss has stated,“ The theory of capital budgeting has not been set forth; rather the emphasis... has been on devising and improving the techniques of capital budgeting.” Michael White has called capital budgeting an “elusive subject” that “lacks clear definitions, organized traditions of inquiry, conceptual boundaries, standard questions, and reliable data sets.”