2017 · Q8a · Zero-based budgeting (10 marks)

Source: PUBLIC ADMINISTRATION 2017.pdf, PDF page 1 · Answer allocation: 10 marks

Original examination question

Write substantive notes on any TWO of the following: (10 each) (a) Zero based budgeting (b) Judicial Activism (c) Social Policy

This page answers option/part (a). All options are supplied for revision; follow the paper’s choice instructions in the examination.

Bullet outline

• Explain justification from a zero base.
• Describe decision units, packages and ranking.
• Identify reprioritisation benefits.
• Assess workload and measurement problems.
• Recommend selective rather than mechanical use.

Full exam-ready answer

Meaning and procedure

Zero-based budgeting requires activities and expenditure to be justified rather than automatically carried forward from a previous allocation. Managers identify decision units, prepare alternative decision packages, describe costs and benefits at different service levels, and rank packages for funding.

“Zero” does not mean abolishing every existing service each year. It means questioning the assumption that historical expenditure is automatically entitled to renewal.

Advantages

The method can reveal obsolete activities, duplication and low-priority spending. Explicit alternatives help decision-makers compare the consequences of expanding, maintaining or reducing a service. It also encourages managers to connect expenditure with objectives.

For example, an office may compare in-person delivery, a shared service centre and an assisted digital channel, including staffing and maintenance costs. The exercise can expose expenditure that incremental budgeting would preserve without examination.

Limitations

Comprehensive annual review requires substantial information and managerial time. Packages may be strategically presented to protect preferred activities, while benefits such as fairness or security are difficult to rank numerically. Legal obligations and fixed commitments also limit genuine discretion.

A mechanically imposed system may therefore produce large volumes of paperwork without improving allocation.

Assessment

Pakistan could use zero-based review selectively for subsidies, administrative overheads or programmes with uncertain value. Multi-year review cycles are more manageable than pretending every expenditure can be reconsidered annually. Zero-based budgeting is most useful as a disciplined challenge to inherited priorities, supported by evidence and political willingness to reallocate resources.

Study note: This is an original model answer, not an official FPSC marking scheme. The outline is for revision; the prose below it provides the complete answer. Marks guide relative depth rather than a prescribed word count.