A government agency has used the same budgeting method for years, gradually increasing yearly allocations without deep reviews. Why do government agencies such as this often rely on incremental budgeting?

Incremental budgeting does not require a full justification of all expenses; instead, it often focuses on adjusting previous budgets with minimal scrutiny. This can lead to automatic increases without detailed evaluations of each line item, contrasting with zero-based budgeting, where every expense must be justified.

While incremental budgeting can help streamline processes, it does not inherently eliminate financial waste. Since agencies typically continue funding previous allocations without thorough reviews, inefficiencies may persist or even increase, as outdated or unnecessary expenditures can remain in the budget.

Incremental budgeting is favored for its simplicity, allowing agencies to adjust existing budgets rather than create entirely new ones. This method fosters continuity, ensuring that ongoing programs and services receive consistent funding while minimizing disruption in operations.