zero-base budgeting

zero-base budgeting The proposal that the budgets of government and other organizations should be designed starting from first principles, defining the aims of the organization and adopting the best method of achieving them. This is contrasted with normal budgetary procedure, which starts from the previous period's budget and makes marginal changes. As real world organizations are committed to contracts with their employees and suppliers, and are affected by the public's expectations about the prices they should charge and the services they should provide, zero-base budgeting is extremely difficult to achieve. Its critics argue that normal budgetary procedure exemplifies learning from experience, and is in any case preferable to a priori planning, which is what zero-base budgeting amounts to.