Rethinking Punctuated Equilibrium Theory: A Public Administration Approach to Budgetary Changes

What stimulates policy change in organizations? Punctuated equilibrium theory (PET) posits that over time policy moves slowly, but also experiences large, rapid changes. Explanations for punctuations have centered on institutional friction and disproportionate information processing. Lacking in PET literature is a theoretical understanding of policy change aside from structural and cognitive limitations. Other organizational features can create friction to slow or accelerate the policy process. This study utilizes both public policy and public administration theory by applying a public administration approach to studying budgetary change. Leveraging this approach, this work analyzes the pattern and explanations of budgetary changes. Centering on two concepts understudied in PET literature—policy feedback and endogenous organizational change—data from hundreds of organizations are used to demonstrate how organization performance and personnel instability contribute to budgetary changes for core organization activity. Results indicate that high levels of performance and low levels of personnel instability lead to incremental changes.