Description
This article addresses not a general theory of social change but a widespread phenomenon in public administration
as a field of research: the endless succession of budgetary reforms in the public sector means that institutional change is
of constitutive and strategic importance. How this change takes place is examined with the aid of the metaphor of
budgeting as a game. The metaphor is elaborated with a view to integrating and conceptually framing existing
approaches that describe the budgeting process as a game. A typology of rules permits investigation social and institutional
embeddedness of budgeting and to describe change (budgetary reform) as change in action.
When reform comes into play:
budgeting as negotiations between administrations
Katharina Peters *
Science Center Berlin. Working Group Metropolitan City Studies, Reichpietschufer 50, 10785 Berlin, Germany
Abstract
This article addresses not a general theory of social change but a widespread phenomenon in public administration
as a ?eld of research: the endless succession of budgetary reforms in the public sector means that institutional change is
of constitutive and strategic importance. How this change takes place is examined with the aid of the metaphor of
budgeting as a game. The metaphor is elaborated with a view to integrating and conceptually framing existing
approaches that describe the budgeting process as a game. A typology of rules permits investigation social and insti-
tutional embeddedness of budgeting and to describe change (budgetary reform) as change in action. # 2001 Elsevier
Science Ltd. All rights reserved.
1. Introduction
1.1. The game of budgetary reform: a useful
conception?
A framework for the various aspects and
approaches under which budgeting is referred to
as a game are considered in the subsequent analy-
sis. It shows how a budgetary game needs to be
constituted to be e?ective. Using and modifying
Gar?nkel’s model (1963, 1967), typologies of rules
are developed that are needed to recognize and
analyze budgeting as a game. Games have con-
stitutive rules without which the game collapses;
they have strategic rules by which the players seek
to gain the upper hand; and they live by rituals
through which roles, trust, and the beginning and
end of games as framework structures are gener-
ated and stabilized. The case analyzed is that of a
budgetary reform in Berlin in the mid-1990s.
Taking an interest in the issue of budgeting
public money inevitably draws attention to the
debate on budgetary reforms: because the burden
of public debts makes reforms urgent (Meyers,
1994), because changing cultural values enforce
reforms (Law & Akrich, 1994), or because public
sector ‘‘reforms’’ are — like ‘‘reorganization’’ in
private enterprise — a constitutive element of
daily institutional life (Brunsson & Olsen, 1993).
To declare a public sector reform is one thing:
to put it into e?ect is another. This article
examines the aptness of the game metaphor to
describe change in the administrative practices of
budgeting.
Looking at budgeting as a game is a suggestion
that has been repeatedly taken up in the past 30
years. The budgetary game is expedient as only a
paraphrase (Crozier & Friedberg, 1980; Hofstede,
1968; Lindblom, 1968). It evokes the idea that
budgeting is an activity in which situational
dynamics, opportunistic action, unpredictability,
and player interdependence play an important
role.
0361-3682/01/$ - see front matter # 2001 Elsevier Science Ltd. All rights reserved.
PI I : S0361- 3682( 01) 00008- 3
Accounting, Organizations and Society 26 (2001) 521–539
www.elsevier.com/locate/aos
* Tel.: +49-30-25491-262; fax: +49-30-25491-254.
E-mail address: [email protected] berlin.de
Studies that go beyond naming the image to
work out the game as a metaphor proceed as fol-
lows: they show how actor groups are dis-
tinguished in terms of power and implementation
chances in the game (Christiansen & Skærbæg,
1997); how resources are concealed and revealed
in interaction between players (Kaltho?, 1999;
Pentland & Carlile, 1996); what role games are
typical in public service budgetary negotiations
(Czwarniawska-Joerges & Jacobsson, 1989; Jo¨ ns-
son, 1982; Meyers, 1994; Olsen, 1970); and how
budgeting proceeds as a reciprocal strategic pro-
cess (Meyers, 1994).
Using the game metaphor with reference to
reforms permits new insights into how change
manifests itself administratively. To show this,
existing approaches are ?rst explained, and then
(Section 1.2) the approach referred to here as
‘praxeological’ is introduced. Two main tendencies
can be identi?ed in the relevant research land-
scape. In a positivist rationality approach, national
and international comparative studies examine the
course of reform and the preparatory control
models, time planning, and ?nal products.
1
These
comparisons o?er insight into the successes and
weak points of reforms (Banner, 1991; Banner &
Reichard 1993; Klages & Lo¨ ?er, 1997; Pallot,
1997; Wegener, 1996). The failure of reforms is
explained by de?cient framework conditions: for
example, sections of the sta? concerned block the
reform, there is too little money, and there is no
coordination. Such justi?cations mean that it is
not the model-driven reform that is required to be
justi?ed but the institution a?ected (cf van Gun-
steren, 1976; Power, 1994). In the positivist
rationality approach, budgetary reforms are mea-
sured and described against models.
The symbolic interaction approach is the second
research ten-dency in the area. It is particularly
favored in Scandinavia. It di?ers from the prag-
matic approach in that it does not compare a
model with reality, considering divergence as an
unintended side-e?ect of reform, as a re?ection of
teething troubles of a new system or even as par-
ticularly di?cult reform conditions. The fact that
reform models and the reality of reform always
diverge is explained not as the result of unfavor-
able conditions but as a fact that has, as Czar-
niawska-Joerges and Jacobsson (1989, p. 38) put
it, become a ‘‘fruitless insight’’. The symbol-
oriented investigation of reform locates changes
beyond the models: Winberg, Brunsson, and Olsen
(1993, p. 120) claim that reforms are regarded as
successful as long as they are kept simple and thus
powerfully interpretable, distinguish ideals from
practices, and are projected for the future. In the
introductory phase, interpretation changes the
original idea. Ultimately, budgeting practices
inevitably embody something much more complex
than what the reform idea stood for. Disappointed
expectations can be o?set by new reforms. From
this point of view, the function of reforms is to
rethink attitudes towards the ideal of the work
concerned, and to strengthen faith in greater
e?ectivity and e?ciency. Reforms are thus under-
stood as symbolic achievements in adapting gov-
ernmental and administrative ideals to changing
cultural values (Brunsson & Olsen, 1993; Czar-
niawska-Joerges & Jacobsson, 1989). In the sym-
bolic interaction approach, reforms are examined
as a rhetoric of change whose e?ects are captured
at the level of actor perception. By making per-
ception the central object of budgetary reform,
symbol-oriented research loses an essential aspect
worth investigating: if budgetary reforms take
e?ect not (only) where planned in the model, what
are these e?ects — leaving aside their perception
by players — at the practical level?
1.2. The praxeological approach
This article applies a praxeological approach in
investigating budgetary reforms. The point of
departure is the form budgetary reform takes if it
is considered as a game. Almost 40 years ago
(1964), Wildavsky made a contribution to this
question when he described budgetary reforms
against the background of the incrementalism
thesis: reform ought to be guided by the local and
cultural particularities of the institution to be
1
This research tradition ?nds expression in the so-called
New Public Management. For the international discourse cf.
Ferlie, Ashburner, Fitzgerald, and Pettigrew (1996); Jones,
Schedler, and Wade (1997); for the debate in Germany cf.
Banner, and Reichhard (1993); Wegener (1996); for a Berlin
discourse cf. Dehnhard (1996).
522 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
reformed and ought not to call in question too
many of the fundamental structures (1964, 1975).
Wildavsky used this incrementalism thesis pri-
marily to answer the question what good reform
planning ought to be. In his accompanying inves-
tigations he provided no answers to the question
how speci?c changes can be described analytically.
As in the approaches described above, ‘uninten-
tional consequences’ are mentioned only from the
perspective of actors perception (1975, pp. 290–
293). In the following study, the game metaphor is
used to permit an analytical description of changes
in budgeting.
The praxeological approach shifts the focus
onto budgeting processes. As far as the process of
implementing budgetary reforms is concerned,
most attention so far has been paid to the political
aspect of budgeting and to the analysis of the
interface activities between politics and the
administrative machinery (Brunsson, 1989; Czar-
niawska-Joerges & Jacobsson, 1989; Jo¨ nsson,
1982; Meyers, 1994; Olsen, 1970; Wildavsky, 1964;
Heclo & Wildavsky, 1974). It is not by chance that
investigation of the political arenas and the inter-
face work in politics and administration has
strongly emphasized the symbol-oriented e?ects of
reforms; for reforms are presented here as the
handling of a modernization rhetoric that has to
be successfully advocated politically and credibly
demonstrated. However, the consequences of
budgetary reform manifest themselves at the
administrative level. By choosing an adminis-
trative locus for the praxeological procedure,
reform becomes the subject of an analysis of
the persistencies and changes in the craft of
budgeting.
2
The subject matter of the study is intra-admin-
istrative negotiation about the distribution of
public funds. The methods chosen were ones that
demand more than a brief visit. Participant obser-
vation (Hirschauer & Amann, 1997; Spradley,
1980) can capture aspects of dealing with reform
that escape interviews and the analysis of written
documents, namely the budgeting practices that
have become part of the habitualized action
repertoire and are no longer (or can no longer be)
verbalized, as well as those that, in the eyes of
?nance experts, cannot be understood as aspects
of budgeting suitable for legitimation or repre-
sentation purposes (cf. also Wildavsky, 1964, p.
152).
Over a period of 2 months, the author accom-
panied preparations for the introduction of a new
budgeting instrument at one of Berlin’s largest
public authorities. The focus was not so much on
the particularities of administration but on what
negotiation structures develop when an authority
negotiates with other authorities on budget levels
and budget purposes. This perspective is re?ected
in the terminology used, the authorities no longer
being referred to in terms of their function for the
city (culture, sport, ?nance, etc.) but simply as
‘‘the Department’’ and ‘‘the Ministry’’.
The focus was on everyday o?ce work with its
routines: work with ?les and computers, telephone
conversations and discussions among colleagues,
emergency meetings, and talks during the lunch
break. The spatial context of observation was the
‘‘maternity ward’’ where the new budgeting
instrument saw the light of day, the Department’s
?nance section. This project thus tackled ‘‘only’’ a
very small part of a large, fragmented structure. It
was very much up to the Department to give or
restrict access to segments of administrative rea-
lity.
3
The observations presented here have thus
been subject to this external in?uence. The hand-
ling of budgeted and current ?gures is analyzed. A
great deal of time in intra-administrative negotia-
tions was spent harmonizing the parallel inter-
pretations of one and the same draft budget, one
and the same adopted budget, and the forecasts
and individual computations on which they were
based. Owing to her spatial restriction to one
observation post, the observer was able to capture
these activities only by extending participant
observation beyond the Department: she attended
2
This perspective excludes others. All activities preceding or
accompanying administrative activity are left out of account:
the political antecedents, emerging citizen commitment, the
in?uence of individual organizations (such as trade unions),
and media reporting.
3
I requested access to where ‘‘negotiation, administration,
and revision of the Department’s budget’’ took place. On the
basis of this request and a subsequent interview, I was assigned
to the ?nance section at the State Department Administration
O?ce.
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 523
meetings between authorities, conducted ethno-
graphic interviews with o?cials at the various
authorities, and studied the ?les and correspon-
dence of the authorities negotiating with one
another. To permit description of the development
of the reform over a period of 2 years’ observa-
tion, the di?erent sources of data gained in this
period are bundled and strongly aggregated.
In an examination of a speci?c case, the prax-
eology of the game o?ers an analytical concept for
a sociological understanding of institutional
change in administrative action. This concept
addresses not a general theory of social change but
a widespread phenomenon in public administra-
tion as a ?eld of research: the endless succession of
budgetary reforms in the public sector means that
institutional change is of constitutive and strategic
importance. The praxeological procedure
employed obeys a constructivist paradigm: it is
concerned not with testing hypotheses but with
exploring new perspectives on known phenomena.
Constructivism . . . requires . . . the analysis to
be kept su?ciently free of theory. According
to this view, sociological theory is primarily
an attribute of society, not of science. Too
great a correspondence with this theory, a
reproduction of parts of societal theory by
social scienti?c analysis seems to be just as
much a problem here as the traditionally cri-
ticized lack of correspondence between social
scienti?c statements and the societal world
(Knorr-Cetina 1989, p. 92).
It is a matter of pursuing an explorative strategy
and not discussing the inconsistencies in existing
theoretical approaches. The structure of the article
re?ects this intention: the description is not driven
by a theoretical question posed at the outset to
which an answer is sought. A general empirical
research issue and the status of research in the lit-
erature on budgeting and budgetary reform hav-
ing been described, the article proceeds to outline
the speci?c budgetary reform under study (Section
2). This provides the background for analyzing the
rules of the game that govern the budgeting pro-
cess (Section 3). The rules are stressed in the sense
of data exploration by the use of descriptive
headings. They do not determine what is to be
seen but develop an analysis from the material
that is presented in each subsection. Budgeting
phenomena that are identi?ed in this manner can-
not be explained by the approaches described
above. Finally, Section 4 discusses what direction
a theory of explicit and strategic change could
take that permits the budgetary process and thus
budgetary reform to be considered metaphorically
in the light of a game.
2. Public administration as a locus of budgetary
reform: the introduction of lump-sum funding
The subject of the budgetary reform on hand
can be outlined as follows. In the city-state of
Berlin, all aspects of the ‘‘cameralistic’’ structures
4
in government administration are being reformed
on a grand scale.
5
This reform also involves
introducing business administrative forms of bud-
geting.
6
This, in turn, involves shifting responsi-
bility for costs from the center to decentralized
?nancial management. It also means that the out-
lay needed to produce administrative products is
to provide the basis for determining the allocation
of public funds. As yet, however, there is no
4
Average payments obey a cameralist logic. In contrast to
managerial cost ?nding, cameralist accounting is concerned not
with the confrontation of pro?t and loss but with the compar-
ison of approved and implemented outlays (Staender, 1984).
5
Budgeting with government funds di?ers from budgeting
in private enterprise in that there is strong public legitimation
pressure (Luhmann, 1969). This ?nds expression in numerous
legal regulations establishing rules and procedures for budget-
ing. Secondly, at least in Germany, it ?nds expression in a sort
of planned economy that lays down a year in advance where
and for what purpose public funds are to be used (cf. the Fed-
eral Budget Code, the German Budgetary Principles Act). And
thirdly, it ?nds expression in the public accessibility of political
consultations such as committee and parliamentary work (cf.
the Federal Budget Code, cf. the Berlin Budget Code).
6
Business management practice is located above all in a
change from so-called input orientation towards output orien-
tation in determining costs (Wahlen & May, 1998). Input
orientation means that expenditures of the coming year are
estimated on the basis of expenditures in the preceding year.
Output orientation means that the expenditures are estimated
according to the amount and quality of administrative products
‘‘ordered’’ by parliament.
524 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
knowledge of costs in keeping with these criteria.
Since there is no point in time when municipal
authorities could ‘‘go on vacation’’ to convert
their systems and their accounts, new budgeting
criteria have to be introduced while their basis is
being ascertained. This process was examined in
the largest Berlin public authority (with a sta? of
just under 30,000) over a period of 2 years. The
new budgeting instrument under investigation is
the so-called lump-sum or block appropriation. It
brings together a large number of subheads in
three pools of costs. There are block appropria-
tions for personnel, for physical resources, and for
investments. The idea behind block funding for
personnel to provide a global budget and spending
limitation for the year is that the Department
should in future take responsibility for managing
its own money. To date, personnel costs have been
managed in such a way that personnel expenses
have been paid out of the relevant personnel sub-
heads regardless of whether the amounts esti-
mated in the budget covered them or not. From
now on, each department receives personnel costs
as a block appropriation. This block appropria-
tion may not be exceeded.
Members of the department personnel section
faced the problem that personnel costs had
hitherto been calculated as average rates for all
authorities in terms of position. Any variation
owing, for example, to the fact that department
employees work much more frequently at week-
ends, at unfavorable times, and at dangerous tasks
than district o?ce workers, was not taken into
account by the average rates. However, actual
payments were not subject to any such limitations,
funds beeing provided as needed. For the ?rst
time, the Department was now required to ?nd
out how much money was needed and for what.
In their concern that the speci?c requirements of
departmentel personnel should not have to be met
by means of supplementary estimates, members of
the Department prepared a projection, which they
sent to the superior authority, the Ministry, esti-
mating that an additional 8% of current personnel
costs would be needed, some DM 165 million.
The problem of accurately estimating lump-sum
appropriations was debated at meetings of the
Berlin Senate departments and authorities. The
minutes of these meetings reveal that the State
O?ce for Information Technology was unable to
process the individual components of salary pay-
ments for appropriate presentation. Not only the
Department but also the Ministry was provision-
ally obliged to resort to projections. A projection,
which the Ministry prepared as an ‘‘answer’’ to the
Department’s submission, rejected the basic
assumptions of the Authority as implausible and
the demands deriving from them as completely
exaggerated. The provisional settlement of the
dispute, reached by letter and in top-level talks
between the Department and the Ministry, was as
follows. Block funding for the Department was for
the moment to be at the same level as for other
authorities. If, at the end of the ?rst accounting
year, a de?cit was apparent that was clearly attri-
butable to speci?c allowance payments for
Departmental o?cers, this de?cit would be
‘‘absorbed’’.
What followed was a discussion on what
‘‘absorption’’ meant. Did it mean that all Depart-
mental liabilities would be covered? Or was it up
to the Ministry to decide the extent to which any
de?cit would be made good at the end of the year?
Once again, letters were exchanged and top-level
talks organized. The outcome remained open for
the moment. The Ministry made its decisions
contingent on the budget situation at the end of
the year, the Department demanded written con-
?rmation of the verbal commitment to cover the
entire expected de?cit. The framework for dealing
with a negative balance at the end of the ?rst
block funding year remained unsettled.
As one of the largest public authorities in Berlin,
the Department is divided into several sections
concerned with the administration of personal
data. In the process of reconstructing how per-
sonnel costs and all directly related items are
recorded, it turned out that there were scarcely
any electronically processed raw data to draw on
and it took months to assemble all the bits and
pieces of information on personnel costs. The aim
was to prepare models and formulas for an elec-
tronically processed monthly report of salary pay-
ments that would make models for ‘‘real money’’
out of the ‘‘play-money payments’’, as one ?nance
specialist put it.
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 525
Preparations for a new method of cost ?nding
were accompanied by preparations that were not
documented. Colleagues in the ?nance section
discussed scenarios for interpreting and handling
the lump-sum appropriation system, and how
Departmental budgeting would be a?ected. For
example, if the Department was now responsible
for its budget, would spending freezes be deter-
mined by the internal budgetary situation and thus
be within the responsibility of the Department?
And if this was the case, who, if not the ?nance
o?cers, would be able to judge this? But no
?nance o?cer wants to be made responsible for
blocking promotions.
Other unanswered questions concerned the reg-
ulatory framework for block funding. What hap-
pens if the balance is positive rather than negative?
Contrary to the principles of lump-sum funding,
any surplus could be taken at the end of the year
to consolidate state ?nances and distributed to
authorities that had mismanaged their resources
because they had not taken the block appropria-
tion system seriously. Not only the consequences
of a negative balance at the end of the year were
unclear, but also the consequences of a positive
balance.
When the lump-sum appropriation became
available it amounted to DM 1,760,434,000, and
thus did not include any special payments speci?c
to the department’s personnel structure. A written
statement was prepared for the Ministry, which
was intended to secure from the outset the com-
mitment made during the negotiations that such
special outlays would be covered retrospectively.
Despite the assumption that the lump-sum appro-
priation was too low, the ?nance section planned
no restrictions for the Department. As one mem-
ber of sta? put it: ‘‘We’re proceeding as usual.’’
The assumption that the de?cits were ‘‘justi?ed’’
and that they therefore had to be ?nanced retro-
spectively was behind this attitude.
At the end of a dramatically tense preparatory
phase, it was surprising that, after the new system
had been introduced, ?nance section sta? told
colleagues they would be ‘‘proceeding as usual’’.
An unexpected turn of events. Just as unexpected
were the developments that occurred during the
?rst year of the lump-sum funding system: the
Department did not need to declare a job freeze.
Indeed new people were taken on. However, state
policy set narrow limits to the Department’s
newly-won independence. Owing to Berlin’s cata-
strophic ?nancial situation, the lump-sum appro-
priation system was suspended for months in
favor of spending freezes imposed from above.
Thus people could not be promoted or positions
?lled throughout the year but only at periods
when no spending freeze was in force. Despite
‘‘normal’’ personnel management, the balance at
the end of the ?rst lump-sum appropriation year
at the Department was not, as expected, negative,
but positive. This was explained by the large
number of positions that, although approved by
Parliament and accordingly covered by personnel
allocations, had not been ?lled. A ?nancial reserve
thus accrued that was able to ‘‘compensate’’ per-
sonnel-speci?c special outlays. Moreover, the pro-
jections and the ?rst simulation models had been
faulty, as was discovered in the course of the ?rst
year. Work during this year focused increasingly
on simplifying the complex model and making it
transparent for outsiders. The submission of con-
vincing evidence that the Department’s personnel
costs were higher than those of other authorities
did not bring an adjustment of block funding for
1998. The Ministry stated that the insu?ciency of
the lump-sum appropriation must be sub-
stantiated before any adjustment could be made.
In brief, lump-sum funding has been introduced.
However, not, as proposed in the business man-
agement model, as an output-oriented system, but
as an input-oriented model.
7
A fundamental rea-
son for introducing lump-sum appropriations,
namely to shift responsibility for ?nancial detail
from parliamentary bodies and the Interior and
Finance Ministries to the individual authorities
7
The Berlin administrative reform wants to determine a
?xed number of products for block funding and to allocate the
money necessary to produce them (output oriented lump-sum
appropriation). However, this assessment requires a cost
accounting system that does not yet exist. The input-oriented
lump-sum appropriation is based on key data derived from the
medium-term budgetary planning for the whole of Berlin and
broken down into decentralised administrative unit budgets.
This procedure is also referred to as ceiling control. (On Ber-
lin’s lump-sum appropriation system see Wahlen & May, 1998,
p. 50–55).
526 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
has reproduced the problem: it is still not clear
who actually is to or is supposed to shoulder
responsibility for ?nance. The envisaged indepen-
dence of the authorities has not been realized. On
the contrary, more dependencies have been estab-
lished than before: The existing accounting system
is still in place, with the addition of a new form.
The superordinate ministries can now intervene in
both the cameralistic and lump-sum systems
(footnotes 4 and 6) . They do so by means of var-
ious types of spending freezes and by delaying
elucidation of the general conditions for lump-sum
funding.
Descriptions of reforms are frequently followed
by the obvious question whether the reform was a
success or not. Anyone who wishes to answer this
question is obliged to overlook the fact that the
evaluation of the result depends on the angle from
which the question is put, which observations are
to be taken into account, which are to be ignored,
and what timeframe is to be considered.
In the praxeological approach this question is
held in reserve. Observation and analysis are con-
cerned rather with ?nding out how a budgetary
reform becomes administratively e?ective. For this
purpose, the following section reconstructs the
practical logic of reforming by analyzing the rules
of the game.
3. Room for manoeuvre and overt reserves
3.1. Budgeting as a game
The intra-administrative rules of the game for
distributing public funds in the age of block fund-
ing are now considered. For this purpose, we take
up Gar?nkel’s metaphor of the game with its
rules. Gar?nkel (1963, 1967) concentrates on
selective and serial excerpts of everyday situations,
in which he examines how social structures are
usually and routinely maintained. By producing
‘‘crises’’, Gar?nkel observes how participants try
to save the situation from crisis, thus rendering
their rules for producing routines particularly
visible. In contrast to Gar?nkel’s use of the meta-
phor, the ethnographic observation of a 2-year-
long organizational negotiation process requires a
more dynamic concept of the game and its rules
than is provided by Gar?nkel’s experimental logic.
Whereas Gar?nkel carries out a move-by-move
analysis of simply structured game proceedings,
we are tackling a complex analysis of the negotia-
tion of negotiating rules. Gar?nkel’s three cate-
gories of rule are adopted — in modi?ed form. A
distinction is drawn between constitutive, strategic,
and fair-play rules. However, unlike Gar?nkel’s
rules, ours are culled from highly diverse resour-
ces, from statutes, regulations, and administrative
directives, from the practices and traditions of
communication in public authorities. They derive
from the format of negotiations, the ?gures. In
other words, both the legal and praxeological
levels to which the rules can be attributed are
multi-dimensional.
To construct a conceptually comprehensive
game framework means waiving description of
each speci?c rule of the game in all of its aspects.
The focus is rather on the typology of rules.
8
The
dense analytical framework means that not indi-
vidual, fragmented budgeting rules but the broad
outlines of a game are described.
Relations between the types of rules are not seen
as static. Constitutive rules can reshape strategic
rules, turning them into the opposite; fair-play
rules can peter out and at some stage cease to be
applied; new rules can establish themselves to
replace them.
The players (in our case the Department and the
Ministry) play a highly traditional game of bud-
geting for the Berlin public authorities.
9
The aim
of the game is for each player to gain as much
leeway as possible so that it can budget creatively.
This is done by struggling to get su?cient funds
for the purpose. This section describes only a few
of the rules that are particularly apparent in the
8
The game could be alternatively described by analyzing the
rules in terms of their temporal or spatial interdependence.
9
To describe the game, administrative units are reduced to a
few characteristics. Like personalities, they are attributed a
uni?ed identity, a will, and a form of action. This form of
description is a very rough simpli?cation, which is accepted as a
device for determining basic patterns relative to budgeting
without getting lost in the complexity of intermediate forms
and steps in practical administrative communication. In this
simpli?ed descriptive format, relations between political and
administrative authorities are left out of account.
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 527
lump-sum funding game. They form a unique
constellation, which, over and above the historical
and speci?c local organizational ?eld, can reveal
overarching structural patterns for calculating
social facts.
In addition to the rules of the game, the ways in
which the two players use a given rule are descri-
bed. This aspect of the game metaphor is referred
to by Go?mann (1970) as an expression game.
10
In the following game description, the expression
game is re?ected in the mutually reinforcing char-
acterization of minimalist suppliers and max-
imalist demanders.
3.2. Constitutive rules: One Round Takes a Year,
Black on White, Red or Black
Constitutive rules lay down what can be done
and what not. They are basic rules without which
a game cannot be played and which each player
takes for granted over and above his or her own
strategies, wishes, etc. In comparison with strate-
gic rules and the rules of fair play, constitutive
rules are covert rules. Their application is neither
discussed (as with strategic rules) nor character-
ized by an abundance of public rituals (as with fair
play rules). They are accessible to empirical
description and analysis only as scraps of meaning
from which the constitutive intension of the rule
can be derived. Each player expects others to do
likewise, and also expects other players to expect
this of him or her (Gar?nkel, 1963, p.190). For
example, the order in which players have their
‘‘turn’’ is a constitutive rule in most games, and is
a precondition for the game proceeding at all. The
constitutive rules of intra-administration budget
negotiations go back in large part to the rules laid
down by federal and state ?nancial regulations.
The constitutive rules that became particularly
apparent through the introduction of block fund-
ing are described below. They constitute the game
in terms of a timeframe (Section 3.2.1), doc-
umentary evidence (Section 3.2.2), and the per-
ception of costs (Section 3.2.3). What is also
described are the cultural acquisitions by which
rules are transformed into, as Go?mann puts it,
‘‘moves’’ in the game.
3.2.1. One Round Takes a Year
One Round Takes a Year is a constitutive rule in
the cameralistic governmental accounting culture.
The Federal Budget Code describes the annual
budgeting principle as follows: the budget covers
the period of 1 year and accounts must deal with
this period [x45 (1), BHO]. The ?nal accounts and
the consequences drawn from the ?nal accounts
are measured against this time frame. In practical
terms, this had the following repercussions:
In an interview, the competent Ministry o?-
cial, who inspects the Department’s personnel
costs, said about the development of block
funding: ‘‘The Department’s ‘moonshine ?g-
ures’ have been relativized. Instead of the
DM 75 million de?cit initially predicted, a
plus of DM 10 million emerged.’’ He descri-
bed the development of the ?nancial situation
from month to month as following: ‘‘In April
a DM 25 million de?cit was forecast, then the
?gure dropped; in July it was at DM 37 mil-
lion again, and dropped thereafter. In Sep-
tember a letter came from the Department
that they would be exceeding their budget by
DM 6 million. We just smiled.’’
Players in the budgetary reform game ‘read’ ?g-
ures to discover not what they mean for the day or
month but what they represent as a result at the
end on the year. The temperature charts the o?-
cial describes had no e?ect on the estimation of
the block appropriation. The most important fac-
tors were the assumptions at the beginning of the
year and the results at the end. In contrast, for
example, to the stock exchange, where the events
of a single day have ?nancial consequences, red
?gures are relevant for block funding only at the
end of the year.
11
Every activity of any player is constitutively
linked with the calculation of the ‘annual round’.
Negotiations were concerned with whether sup-
plementary payments are to be decided at the
10
For a study on the ?nancial system that applies Go?man’s
expression game model to an empirical ?eld cf. Pentland and
Carlile (1996).
528 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
beginning or the end of the ?rst block funding
year. They were also concerned with whether an
authority-speci?c cost allocation base ought to be
developed. Mutual expectations about the success
of both players’ activities are interpreted in terms
of this rhythm.
The rule was used by the Department to develop
a business management form of cost accounting
that would convince the Ministry of the de?cit
within the timeframe of the ?rst year. The Minis-
try used the constitutive rule One Round Takes a
Year to shift the onus to the Department. Adjust-
ment of the block appropriation was to be nego-
tiated not at the beginning of the year but at the
end. The Ministry had thus postponed a commit-
ment to adjust the estimate.
In negotiating lump-sum funding, annual bud-
geting and negotiating strength are closely linked.
While the Department forfeited much of its nego-
tiating strength because it could not report its
special expenses as a de?cit within the period of a
year, the strength of the other side was enhanced.
It had the year ‘‘on its side’’ and now counted on a
further year.
3.2.2. Black on White
Lump-sum appropriation negotiations are
determined by the documentation of costs (Weber:
Aktenma¨igkeit). As long as expenditures cannot
be shown as expenditures under the heads used by
the Department in calculating costs, budgeting
will disregard them. The federal budget code
states: ‘‘On the basis of the balanced books, the
ministry responsible for ?nancing prepares the
budget account for each ?scal year’’ (x337, 2). In
this ?xation on documentary evidence, ?gures are
only ‘‘there’’ when they are already past.
Figures for which there is no proof on paper are
not realities but only assumptions, and, as such,
no legitimate basis for decision making.
Two excerpts from interviews show that the
documentation of ?nancial facts cannot be seen in
isolation from the choice of presentation. And the
choice of presentation depends, in turn, on the
context in which the Black on White rule should,
in the view of the player, apply.
Question: ‘‘Once ?gures are there you can’t
avoid having to deal with them?’’ Answer:
‘‘No, you can question them.’’ Question:
‘‘And what do you do then?’’ Answer: ‘‘I take
my precautions by submitting an endless
mass of printed paper. Sensibly documented
but so complex that they push my pile of
paper aside in disgust.’’ In another context
the art of documentation is described by the
same person as follows: ‘‘If we’re clever
enough and don’t send too much, we don’t
hear the reproach that we’re burying them
under ?gures and just want to hide the essen-
tial. But we can’t supply too little, either,
because then the reproach is that we’re hiding
something and aren’t saying what we know
. . .anyway, these negotiations aren’t about
the speci?c structure of costs, they’re about
nit picking. That’s the best way to call every-
thing into doubt. Here a little million, there a
little million.’’
The Black on White rule is constitutive for the
budgeting game is so far as documentation is gen-
erated reciprocally — in the sense that the one side
documents what it believes the other side wants to
see documented and vice versa.
The basic rule Black on White is applied di?er-
ently by the two players: the Department uses the
basic rule to enhance the credibility of the person-
nel cost documentation in the current year. The
Ministry uses the rule to delay assessment and
thus to gain leeway in negotiations.
3.2.3. Red or Black
The urgency of costs is, however, not established
by black-on-white evidence. It is generated only in
a second step. Only when ?gures appear on paper
11
Not only short-term developments, also long term bud-
getary planning, which covers a 5-year period, leads a shadowy
existence in comparison to the annual budget (Andel, 1983,
p.100; Blankart, 1991, p. 331). The example of major invest-
ments that produce runaway costs after a number of years
demonstrates this ?xation on annual budgeting. What in the
?rst years of ?nancing appears to be a balance between planned
and actual expenditures, leads in the course of projects to
growing di?erences between allocated and required costs. If a
major project has been receiving public support for several
years, it becomes politically di?cult to withdraw.
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 529
not in black but in red are items particularly
important. In the cameralistic accounting system,
funds are appropriated to individual aspects of the
system. These are the supply estimates passed by
Parliament, which set a limit to spending. To
exceed appropriations, thus producing a de?cit, is
justi?ed only if it can be shown that it was inevi-
table. x27 (3) of the Basic Budgetary Rules Act
states: ‘‘Expenditures shall be made or utilized
only for the purpose stated in the budget, in so far
as and for as long as this purpose persists and only
until the end of the ?scal year. . . . (cf. also x 7 (1)
BHO).’’ A de?cit that is still shown as a de?cit
after the closing of accounts is almost auto-
matically considered undeniable.
12
For the sub-
sequent year the need therefore arises either to
increase the grant to obviate a de?cit, or to reor-
ganize ?nancing.
In the following episode a member of the min-
istry sta? summarizes the history of negotiations
at the end of the ?rst block appropriation year:
‘‘We saw the forecast of DM 75 million de?cit
as a risk and made a noise, whereupon the
others (at the Ministry) naturally shook their
heads; incidentally, it also turned out that
these were the usual moonshine ?gures the
Department produces.’’
‘‘The DM 75 million de?cit vanished into thin
air. That’s how fast it goes.’’
An outsider might be justi?ed in wondering how
several million DM can possibly vanish into thin
air. But, strictly speaking, not the costs but the
criteria by which they were computed vanished.
On the basis of the plus and minus criteria alone,
leaving aside all others (e.g. the speci?c personnel
structure at the Department) strange things hap-
pen: regardless of whether the authority has higher
personnel costs and whether they would have to
be assessed di?erently, costs can become ‘‘moon-
shine ?gures’’ and ‘‘vanish into thin air’’ as long as
what counts is an overall end-of-year plus.
Moonshine ?gures and vanishing costs are under-
standable only if the non-verbalized context is
considered, in this case the Black or Red rule. This
rule is constitutive because the players are
mutually aware that matters become intra-admin-
istratively relevant in the form of expenditure only
if they no longer have to be covered by the overall
budget but in the form of supplementary ?nancial
demands or additional funding that has to made
available. Relevance is generated by red ?gures
and excluded by black ?gures.
The two players use the di?erence between red
and black in di?erent ways. In the case of lump-
sum funding, the Department had a weapon on
hand as long as it expected forecasts of high de?-
cits. Since these cannot materialize on paper
within a year, the Department’s negotiating posi-
tion was substantially weakened by positive ?g-
ures. The Ministry used the Black or Red rule in
taking a decision on assessment of the block appro-
priation. In this connection it was concerned not
with economic personnel assessment but with whe-
ther the Department could produce black ?gures
without speci?c personnel assessment. Since this was
the case, the average appropriation amount was not
to be changed for the current or the coming year.
13
3.3. Strategic rules and an instrument: Room for
Manoeuvre and Overt Reserves, Same or Di?erent,
be Prepared and Take your Chance, Look Back
with Foresight
In addition to the constitutive rules without
which the game cannot be played, there are strategic
12
Cf.x37 LHO Berlin: ‘‘Unscheduled and extraordinary
expenditures require the approval of the Senator for Finance.
Approval shall be given only in the event of an unforeseen and
incontrovertible need. A need shall not be deemed incon-
trovertible if the expenditures can be postponed until adoption
of the next budget act or the next supplement thereto.’’
13
The importance placed on red and black ?gures in public
administration provokes comparison with e?ciency-oriented
market economics. The cliche´ has it that a negative balance has
consequences involving not the expansion but the cessation of
?nancing. A fruitful and di?erent form of contextualization is
o?ered by Law and Akrich (1994, p. 212). They use not the
criterion of state institutions versus private enterprise but the
framework of slow and fast availability of monetary informa-
tion. Where monetary information is more rapidly accessible, a
short-term to and fro between well-?nanced and de?cit-ridden
divisions of an enterprise takes place. The ground is being cur-
rently prepared in Berlin public authorities for such a trend.
530 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
rules. The literature on strategic action in budgeting
describes this with regard to capacities for organiza-
tional learning, to actor-speci?c knowledge resources
(e.g. Meyers, 1994). Here, however, actors are not
considered as the central subject matter under study
but as part of the ensemble of conditions that permit
strategic rules of the game. Go?mann (1982) puts it
succinctly: ‘‘Not, then men and their moments.
Rather moments and their men.’’ In our context,
we are thus concerned not with people and their
games but with games and their people.
Strategic rules have a binary structure. There are
two sides to rapprochement: if a player chooses
the one aspect of the rule, the other player coun-
ters with the opposing aspect. There are also stra-
tegic instruments for budgeting. In contrast to the
rules, the instrument does not have a binary struc-
ture and is used in a similar way by both players.
With this instrument budgets can be transformed
into strategic negotiation spaces. We consider three
strategic rules and one strategic instrument.
3.3.1. Room for Manoeuvre and Overt Reserves
Go?man (1970) has termed prominent activities
in negotiating on budgetary resources as covering
and revealing moves.
14
In the German public sec-
tor context this discourse is characterized by
metaphors of leeway, of room for manoeuvre on
the one hand and of overt reserves on the other.
15
Room for manoeuvre can be obtained in several
ways. Two are outlined below:
When savings are called for, authorities pro-
pose cuts that prove on closer inspection to
be impossible (e.g. because the law prohibits
it). If the impracticability of such a proposal
is not realized by the control authorities in the
state, the authority has ‘‘gained room for
manoeuvre’’.
It is the implicit target to establish scope for
action by holding and gaining room for manoeuvre.
For good reason public verbalization is evaded to
a large extent. A budget specialist described this
evasion as follows:
As long as I was certain about my depart-
mental budget I travelled around Germany
boasting about the much better infrastructure
that Berlin had to o?er than elsewhere. Since
I am no longer certain about the level of
funding, I keep quiet. Who talks big about
the infrastructure being excellent when cuts
are on the agenda?
As Meyers (1994) states, this strategy is only one
side of the rule. The dynamics of advocacy go
hand in hand with the dynamics of control. The
control aspect in this case is the search for overt
reserves, for hidden reserves, for structures amen-
able to ‘‘slimming down’’, or a ‘‘starvation diet’’.
In the course of the introduction of lump-sum
funding such overt reserves are the positions still
?nanced by the state in accordance with camera-
listic practice, but which had not been ?lled by the
Department. For the tactical purposes of the
Ministry (which imposes spending freezes while
delaying the supplementary funding demanded by
the Department), they represent savings poten-
tial.
16
As funds without direct application they
o?er the opportunity (initially) to refuse further
negotiation on the cost-speci?c assessment of
personnel expenditure. They represent a coun-
terweight to the urgency of assessing e?ective
costs.
While such ‘‘hidden reserves’’ are not o?cially
taken into account in the basis for assessment,
they have a strategic importance in budgeting
practice. With the implementation of the block
funding system, budgeting practice is shifting from
negotiations about ?xed costs to haggling over
leeway.
17
The strategic handling of Room for
Manoeuvre or Overt Reserves gained a new
impetus with the introduction of personnel-spe-
ci?c block grants and simultaneous saving con-
straints. With the di?erent form of ?nancing and
14
Cf . Kaltho? (1999), Pentland and Carlile (1996) for other
empirical studies in which revealing and concealing play a role.
15
In German: ‘Luft’, ‘Luftnummern’, ‘atmen ?ach’, ‘da ist
noch Luft drin’ etc.
16
The process of conjuring out ?nancial reserves is descri-
bed in Peters (2000).
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 531
cost reporting, previously non-formalized areas
were now formalized. Room for manoeuvre thus
had to be found elsewhere.
The Department used the calculation of person-
nel-speci?c costs for an opposing end: pools of
costs that previously played no role could now be
put on show — as empty reserves, which at the
same time distracted attention from reserves else-
where (the funded but unoccupied positions).
These background funds give the Department
room for budgeting despite savings.
The Ministry used its tactics of delaying ?nan-
cial commitments to get its hands on newly dis-
covered reserves at the Department as a means of
achieving savings beyond drastic cuts in services.
3.3.2. Same or Di?erent
A third example of strategic rules in the case
under study has to do with treating public services
as a uni?ed structure or as a di?erentiated struc-
ture with speci?c properties.
As has already been stated public service per-
sonnel costs were, until the introduction of block
funding, calculated and allocated on a uniform
basis for each authority, be it the courts, the Berlin
Fire Service, or the Kreuzberg District O?ce. The
Ministries for Internal A?airs and Finance con-
tinue to treat authorities uniformly under the
block appropriation system. The Department
argued against this uniformity of treatment,
pointing out that structures di?er in kind from
authority to authority. Block funding o?ered the
opportunity for ?nancing appropriate to require-
ments: expenditure per person paid, calculated
speci?cally in terms of age structure, bonuses, etc.
In the following example, the two conceptions of
public ?nancing con?ict are demonstrated in con-
?ict with one another.
18
At a ?rst review meeting after two months of
working with the block appropriation system,
the ?nance o?cers of the various authorities
met with representatives from the ministries
responsible for personnel and ?nance for an
exchange of experience. The authorities com-
plained: ‘‘What happens if, as will probably
be the case, we are broke by the summer
recession?’’ The Interior and Finance Minis-
try representatives answered: ‘‘We know these
fears from when the block appropriation was
introduced in the Berlin districts. They
proved to be unfounded.’’ The authorities
again: ‘‘Our personnel cost structures can’t be
compared with those of the districts. And
they are also very di?cult to compare
between authorities. We need block funding
speci?c to each authority!’’ The response:
‘‘Your de?cits are absorbed at the end of the
year.’’ The departments: ‘‘But we don’t want
to receive our income only in the end-of-year
procedure. It can’t be the idea of block fund-
ing that the revenues we take care of aren’t
available to us.’’
Exploiting the distinction between Same or Dif-
ferent provides strategic options in all negotiations
on costs where responsibilities are not con-
tractually attributable to one or other party. Stra-
tegically exploitable room for manoeuvre arises in
interpreting organizational objectives, loyalties,
and responsibilities.
The Same or Di?erent rule is used di?erently by
the two players. The Department used one part of
the rule to emphasize the di?erences between itself
and most other Berlin authorities. It justi?ed sup-
plementary payments.
The Ministry used the other, ritualized part of
the rule in calculating all personnel costs uni-
formly. It explained its reasons as follows: if the
17
The Room for Manoeuvre and Overt Reserves game is not
restricted to the speci?c budgeting culture under study. The
rules of the game are strategic rules that structure the give-and-
take in ?nancial negotiations. This form of ?nancial negotia-
tion is also manifest in the media performance put on by
industrial associations when an increase in charges and taxes
threatens. As long as the taxman spares or favors private
industry, silence reigns, which only becomes evident when
additional burdens become politically relevant. The associa-
tions then react with complaints and threats about relocations
and job cuts.
18
In business organizational forms, too, the distinction
between Same or Di?erent is used as a strategic negotiating
resource. Organizational models that provide for an entrepre-
neurial centre with central powers and specialised units/enter-
prises largely independent of the centre but assigned to it with
their own rights and duties, invite the exploitation of negotiat-
ing latitude in deciding where unity stops and di?erentiation
starts.
532 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
speci?c characteristics of the various authorities
are balanced against one another, they ultimately
o?set one another.
3.3.3. Be Prepared and Take Your Chance
In times of ?scal stress the basic rule One Round
Takes a Year developed into a strategic rule.
Annual budgeting as a constitutive rule of the
game serves no longer only as a period but, as far
as ?nancial promises are concerned, rather as a
framework for a sequence of points in time. In the
?rst block appropriation year the situation was as
follows:
From January to March no budget came into
force. The authorities operated with an emer-
gency budget that permitted only the una-
voidable spending. Immediately after the
allocation of block funding in early March, a
job freeze was imposed. From then on this
pattern was repeated throughout the ?nancial
year: job freezes, spending freezes, and the
blocking of speci?c items were declared, lif-
ted, and declared again. During an informal
talk on the occasion of a meeting, the ?nance
experts of two authorities discussed how
much time they had between the emergency
budget and the job freeze (‘‘We had four
hours. Managed to get three things through,
though.’’ ‘‘We had one and half days.’’). A
Ministry o?cial reported that the authority
he was in charge of managed to ?ll 1000
vacancies pre-programmed for this point in
time at the press of a button.
The two players use the Be Prepared and Take
Your Chance rule in di?erent ways. The Ministry
imposed temporary spending freezes to gain con-
trol over the excessive requirements of authorities
and in?uence over the spending behavior of the
authorities.
The Department had control over its own bud-
get only at the points in time when the spending
freezes were lifted. Whatever happened within the
period of a year, e.g. promotions, was, as far as
possible, now done in the periods between spend-
ing freezes.
3.3.4. Looking Back with Foresight
Prognoses serve as a forecast, a simulation, or as
a projection. As an instrument prognoses set the
level of expectations for the three strategic rules.
The e?ects of prognoses cannot be dealt with here
in full detail. Only one aspect of it is discussed,
namely that which shaped the strategic negotiating
scope for the three rules mentioned above.
19
The
forecasts re?ect expectations on ?nancial develop-
ments. As on the stock exchange, it is a matter of
moods and trends. If worse times are expected,
there are gloomy forecasts; if better times, the
forecasts are more con?dent. Figures are provided
with an interpretative context and vice versa an
interpretative context with ?gures. For this rea-
son, the instrument is called Looking Back with
Foresight.
With the introduction of lump-sum funding,
interim forecasts gained in importance, because
the new way of recording costs — no longer by
cost centers but by heads — was a source of
uncertainty. They showed whether foreseeable
?nancial developments and errors in forecast
models had occurred that radically changed the
annual forecast. The forecast became an aid in
interpreting data, and thus had a substantial
in?uence on the players and their playing beha-
vior. In this situation, the two players used the
Look Back with Foresight rule to permit them to
make their most negative fears about the develop-
ment of the ?nancial situation the basis for fore-
casts.
It is probable that managerial cost accounting,
once standardized for all authorities, will be of less
strategic use for either side. The normed categories
have considerable de?nitional power on both sides
of the table of negotiation. At this point the stra-
tegic rule becomes a constitutive rule. For the
moment however standards for economic cost
categories are not yet set.
19
Other aspects of the forecast discussed in the literature
are, in particular, instrumental questions about possibilities to
calculate the future (Premchand, 1983); incremental questions,
namely looking for the determination of actual prognoses
through previous budget structures (Wildavsky, 1964); and the
de?nititorial power of fore-casts over what is understood as
reality (cf. in general Miller & O’Leary, 1990).
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 533
3.4. Rules of fair play: The Role Game, The Trust
Game, The Endless Game
In addition to constitutive and strategic rules, a
third type of rule is revealed by analysis of block
appropriation practices. The rules of fair play
include rules that de?ne the common interpreta-
tion of the game. Whoever disregards them is a
‘‘bad player’’, a spoilsport. Three such rules will
serve as examples. Depending on the given situa-
tion and who is involved in negotiating budgets,
di?erent fair-play rules can apply, without the
rules having to be mutually free of contradiction.
3.4.1. The Role Game
The players perceive each other on the basis of
ritualized role patterns. These existing role attri-
butions had a strong in?uence in the introductory
phase of block funding. Two pertinent quotes give
an insight in what is at stake with such a rule:
‘‘The Department had a 100% reserve men-
tality. Within the Department people believed
they could be denied nothing. Given their
speci?c function in the city, their demands
would have to be met’’ (statement by a Min-
istry o?cial). ‘‘The Ministry is not aware of
the dimensions we’re talking about in the case
of personnel block funding. Their main inter-
est is to keep negotiations open as long as
possible’’ (statement by a Department o?-
cial).
In implementing the block appropriation sys-
tem, the Department assumed the role of the per-
son ‘‘who always asks for too much’’ and the
Ministry assumed the role of the person ‘‘who
always makes swingeing cuts even if he can’t fully
appreciate the position.’’
20
The Department pro-
jection was rejected by the Ministry as excessive
and implausible; the counter estimate presented by
the Ministry, which was much lower, was not
accepted by the Department because it was alleg-
edly unrealistically low. In determining the level of
expectations for negotiations, a bargaining rule
has developed in the public service, which can be
formulated as follows: since cuts can always be
expected, the demander is well advised to ‘‘calcu-
late’’ as much as possible. The supplier need not
count on its savings targets being met, so that they
have to be set higher from the outset. Both sides
know both rules. Where the respective ‘‘pain
threshold’’ lies beyond which face could be lost is
an open question. These conditions result in dif-
fering ritual ways of playing the game. The more
drastic the terms in which the budgetary position
is portrayed by the funding party, the more urgent
will be the needs reported by the authorities. If a
party has once gained a reputation as a ‘‘max-
imalist’’, it will have no choice but to live up to
that reputation. Regardless of whether this is
understood as mere (individual) prejudice or an
accurate judgment, the important thing is that
such aids to interpretation take on strategic weight
in negotiations, thus committing the other side to
the complementary role. In the constantly recur-
ring budgeting game, the parties’ conceptions of
themselves and their interlocutors become ?xed
with regard to how the funding demands of public
authorities are judged in terms of their roles.
In the Role Game (Section 3.4.1), the exploitable
resources are dramaturgy and rhetorical force: the
maximalist demanders have their backs to the wall
(as far as savings are concerned), while the minimal-
ist suppliers ‘‘bow to reality’’ (as far as the cata-
strophic ?nancial situation of the state is concerned).
20
What are here described as the roles of ‘minimalist sup-
plier’ and ‘maximalist demander’ are referred to in organiza-
tional sociology budget research as spending advocates and
controllers/guardians (Czarinwska-Joerges & Jacobsson, 1989;
Jo¨ nsson, 1982; Meyers, 1994; Wildavsky, 1975). In contrast to
Wildavsky, Meyers (1994) points out that role distribution is
not tied strictly to the institutional locus but to situations. The
Berlin Budgetreform exempli?es this in ?nancial negotiations
involving more than two parties. Here the range of roles is
broader. In the case of block funding implementation at the
departmental level, the Department is in the same boat as all
those public authorities that pay money for dangerous working
conditions, allowances for shift and night work, weekend work,
and work at unfavorable times. In Berlin, they include, for
example, the Fire Service. In this coalition, the Fire Service is
the authority that, in contrast to the Department, did not
vehemently push its demands for supplementary grants.
Whereas the Ministry played the role described above vis-a` -vis
the Department, the Berlin Fire Service played the role of the
character who has to be looked after and who has to be
encouraged to insist on its rights.
534 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
3.4.2. The Trust Game
In the implementation of the block appropria-
tion system, the superior authority has neither
extensive insight nor the capacity to control the
subordinate authorities. It must therefore rely on
wide-meshed control and on trust. Vice versa, the
subordinate authority has to rely on its forecasts
being accepted and on its interests being repre-
sented by the controlling authority vis-a` -vis other
state authorities. There is thus a necessarily
mutual relationship of trust, which both sides
hedge about with numerous structural aids.
21
One
such institutional structure is that every level in
the administrative hierarchy in one authority has a
corresponding level in the hierarchy of the other.
Contacts between authorities are generally
between ‘‘peers’’. Along these multi-level commu-
nication lines, settled working relationships are
established, thus stabilizing control and trust
relations.
The Trust Game allows players to test the limits
of con?dence: imperative funding and imperative
requirements, from being absolute categories are
now negotiable.
3.4.3. The Endless Game
Negotiations on an adequate block appropria-
tion were characterized by a use of language that
suggests linearity (‘‘adopted’’ budgets, ‘‘com-
pleted’’ ?nancial years). A look at negotiation
structures, however, suggests a circular process
that is functional precisely because it has no end
(cf. also Peters, 2000). This can be reconstructed
from the correspondence on the lump-sum alloca-
tion system as follows.
The o?cial document that announced the
introduction of uniform block appropriations
left open the question of special arrangements
and ecxeptions. The Department argued on
the basis of these conditions and submitted a
well-founded assessment of demand. The
game thus went into the second round.
In the second round the Ministry managed to
impose its proposal to wait until the end of
the ?rst year for the special payment.
The third round in the budget game now
began: the promise of supplementary pay-
ments at the end of the year could be inter-
preted in more than one way. The
Department demanded a clear undertaking.
Following an exchange of letters and meet-
ings at the executive level, this clear under-
taking was given.
The fourth round, in view of the good results
for the year, further negotiations on person-
nel cost assessment were postponed by the
Ministry until the following years.
In negotiations on the allocation of public
funds, a mutual willingness to cooperate is main-
tained by keeping negotiations open. With the
help of a concatenation of temporary decisions,
controversial issues are postponed and watered
down. Negotiations on taking account of the
Department’s special personnel payments in block
funding remained open. Neither a winner is pro-
claimed nor the end of the game declared.
The Endless Game was used by minimalist sup-
pliers during the introduction of block funding to
refer demands for more money to the future and a
better budgetary position. In contrast, the max-
imalist demanders gained room for manoeuvre by
referring to past ?nancial commitments that
should, in their view, be implemented in the future.
3.5. The Reform Game
In sum, the game is about the art of gaining and
holding as many resources as possible (in the form
of money) to establish scope for action. The
introduction of block funding a?ected some of the
budgeting rules:
(1) Annual budgeting as a constitutive rule in
the budget game no longer guaranteed
?nancing for an authority for a year but only
provided an advance, the ?nal amount being
negotiated at the end of the year on the basis
21
The mutual relationship is also brie?y described in Wild-
avsky (1975, p. 69f.).
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 535
of actual and substantiated expenditures.
Pro?ts and losses are not, as postulated in
the block funding model, ‘‘permissible’’ and
in the responsibility of the authorities. It was
a matter of constitutive consolidation: if a
surplus was suddenly earned it was skimmed
o?; if a de?cit threatened, a budget freeze
was imposed to prevent it. Through this
form of crisis management, the rule One
Round Takes a Year was not only a con-
stitutive but also a strategic rule.
(2) To allow them to control their own budgets
under such restrictive ?nancial conditions,
the authorities prepared themselves to rush
through during the brief periods when their
budgets were at their disposal what they had
been used to spreading throughout the year.
The Be Prepared and Take Your Chance rule
makes speci?c points in time in the course of
the year rather the ?nancial year relevant for
budgeting.
(3) The strategic instrument Look Back With
Foresight is developing into a constitutive
rule: a new form of budget control has been
arising from the documentation and stan-
dardization of monthly payroll payments in
accordance with economic criteria. The
development internal controlling, in the
broadest sense of its meaning, was and is
in?uencing the perception and organization
of how public funds are distributed. The
individual authorities have become subject to
such economic monitoring.
(4) The strategic utilization of Room for Man-
oeuvre and Overt Reserves was stirred up
anew by the fact that managerial cost
accounting made previously non-formalized
areas describable, and, vice versa, lessened
the importance of previously formalized
areas. The game of hide and seek thus gained
a new dynamic. Block funding not only pro-
duced a completely new form of budgeting; it
also changed the traditional game of seeking
to win and keep as many (?nancial) resour-
ces as possible through new rules and ways
of handling rules. A strategic instrument thus
developed into a basic rule and a basic rule
became a strategic rule.
Wittgenstein ([1956]1989) says: ‘‘Whoever
describes with a rule [. . .] does not forsee the
application that he will choose in a speci?c case of
the rule.’’ The relevance of the rule concept, as it is
outlined here, lies in its situational and contextual
e?ects.
22
The rules are not understood and used as
external criteria. For an analysis of the imple-
mentation of reforms in budgeting practices the
rule concept merges the substance of the law with
well-tried traditions of interpretation, with the
exercise of statutory discretion and the changing
cultural contexts of interpretation. The basic rule
One Round Takes a Year, for example, is often
violated without provoking sanctions. If, for
instance, elections take place in Berlin in autumn
and the new government is not in a position to
pass the budget before the coming March, this is a
legitimate justi?cation for ignoring the rule. And
this is not a rare occurrence (cf. Zahradnik, 1997).
The criterion governing the use and interpreta-
tion of the rules described above is the production
of legitimacy. Providing public testimony on
pro?ts and losses means having to prove that the
taxpayers’ money has not been wasted (in the
event of a loss), but also that the government is
not guilty of failing to render necessary assistance
(in the case of a surplus; cf. Peters, 2000). The art
of budgeting investigated in this article is the art of
players convincingly underpinning the legitimacy
of their positions in negotiating by creatively
handling existing rules, either by reproducing,
modifying, maintaining or dropping them.
4. Conclusion
In this analysis, the game metaphor has been
applied in describing budgeting processes as
administrative work. As a descriptive and analy-
tical format, the game shows how expicit change is
generated on the stage of intra-administrative
negotiation. In a close meshing of ritual, strategic
and constitutive rules, each player pursues the
22
This rule concept refers to Wittgenstein’s deliberations
([1956]1989), the ethnomethodological debate on the rule con-
cept (cf. Bogen, 1993; Coulter, 1995; Lynch, 1992) and con-
sideration of policy planning and reform processes (van
Gunsteren, 1976).
536 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
goal of gaining or retaining the greatest possible
scope for action. For this purpose, all the rules
that help the player to legitimize his or her own
position are demonstratively used. A budgetary
reform provides a number of new game resources:
resources that are woven in as the legitimation of
strategic interests (Room for Manoeuvre or Overt
Resources), which make it possible to use existing
rules di?erently (One Round Takes a Year), which
are continued in new rules (Be Prepared and Take
Your Chance), which create new rules (Look Back
with Foresight), and which do not a?ect certain
parts of intra-administrative negotiations at all
(Red or Black, Same or Di?erent, Role-Game).
This observation of budgeting and reform as a
practical administrative game shows the structural
di?erences between the negotiating processes in
1995 and 1997. The changes that occurred have
not resulted in a major breach or profound
uncertainty, but take e?ect in various modi?ca-
tions of activities, rather insigni?cant in them-
selves, which were largely not envisaged by the
reform models. This ?nding is not very surprising,
when one considers the widespread preconception
about ubiquitous resistance to change in (Ger-
man) public administration. However, it goes
beyond mere con?rmation of this prejudice. The
empirical analysis level chosen showed ?rstly the
speci?c complexity of reform projects, the micro-
structural changes in the practical administrative
activities and the rules of the game to which it
gives rise. No reform model can encompass this
complexity so completely that it can determine in
advance what direction has to be taken in the
established modes of playing to attain the goals
set. Secondly, the analysis of such processes of
change shows what multi-layered practical rules
the budgeting process obeys. From this point of
view, legislative changes constitute only a setting,
not an administrative reform. Only when the
actors concerned make it part of the games they
play and thus of local budgeting as intra-adminis-
trative negotiation does it take speci?c e?ect. In
the context of an analytical understanding, the
practice of budgeting as intra-administrative
negotiation shows that this activity is con-
ceptualized as a continuing game, as concrete
social performance. It consists principally in
interpreting ?exibly couched sets of ?gures in such
a way as to produce a budget that is designed to
be temporary and can ?nd public approbation.
The speci?c case study thus produces the follow-
ing general results:
1. The budgeting game can capture ‘‘unin-
tended consequence’’ bescause it contrasts
results against the original reform models
and thereby identi?es changes that could not
have been foreseen by the model.
2. What remains an operational black box
when analysis of reform concentrates on the
political components of budgeting (Bruns-
son, 1989; Brunsson & Olsen, 1993; Czar-
niawska-Joerges & Jacobsson, 1989; Olsen,
1970), can be reconstructed through the
empirical analysis of administrative games as
central components of explicit and strategic
change.
3. According to this study, insight into the
constitutive structural level of administration
is essential in understanding how reforms
attain social reality. Legislation, the discre-
tionary powers it grants, well-tried traditions
of negotiation, modes of calculating, the sta-
tus of technology, and how sudden dis-
turbances are handled feed into the speci?c
changes by which reforms are accomplished.
4. This approach, described above as prax-
eological, allows the view of reform to be
contradicted that, concentrating on the sym-
bolic performance of budgeting, sees the
budgeting process as merely re?ecting chan-
ges discussed in other areas (Czarniawska-
Joerges & Jacobsson, 1989, p. 31). Examina-
tion of intra-administrative negotiating
structures has sharpened the focus on the
question of where the potential for explicit
and strategic change in budgeting is loca-
lized.
5. A distinction must accordingly be drawn
between, on the one hand, inventing and
imposing reform projects in political arenas,
and, on the other, mobilizing resources and
giving shape to the reform at the adminis-
trative level. As negotiations between the
Department and the Ministry in the case
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 537
study show, it is not useful to examine the
budgeting process in isolation from speci?c
administrative interests. It is part of all
negotiation about scope for action, which
invariably seems to take a monetary form.
Although the signi?cance of intra-adminis-
trative negotiations for the shaping of bud-
getary reforms has long been no secret, it is
repeatedly a blind spot in scholarly description.
Acknowledgements
I am grateful to the Financial Experts of Berlin
Ministries for granting me the opportunity to do
my observations. I also owe thanks to the Metro-
politan Research Group at the Social Science
Research Center Berlin for ‘‘setting me on track’’,
to Klaus Amann and Trevor Pinch for valuable
suggestions and comments, to Michael Power for
his support, and to two anonymous reviewers.
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K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 539
doc_571710569.pdf
This article addresses not a general theory of social change but a widespread phenomenon in public administration
as a field of research: the endless succession of budgetary reforms in the public sector means that institutional change is
of constitutive and strategic importance. How this change takes place is examined with the aid of the metaphor of
budgeting as a game. The metaphor is elaborated with a view to integrating and conceptually framing existing
approaches that describe the budgeting process as a game. A typology of rules permits investigation social and institutional
embeddedness of budgeting and to describe change (budgetary reform) as change in action.
When reform comes into play:
budgeting as negotiations between administrations
Katharina Peters *
Science Center Berlin. Working Group Metropolitan City Studies, Reichpietschufer 50, 10785 Berlin, Germany
Abstract
This article addresses not a general theory of social change but a widespread phenomenon in public administration
as a ?eld of research: the endless succession of budgetary reforms in the public sector means that institutional change is
of constitutive and strategic importance. How this change takes place is examined with the aid of the metaphor of
budgeting as a game. The metaphor is elaborated with a view to integrating and conceptually framing existing
approaches that describe the budgeting process as a game. A typology of rules permits investigation social and insti-
tutional embeddedness of budgeting and to describe change (budgetary reform) as change in action. # 2001 Elsevier
Science Ltd. All rights reserved.
1. Introduction
1.1. The game of budgetary reform: a useful
conception?
A framework for the various aspects and
approaches under which budgeting is referred to
as a game are considered in the subsequent analy-
sis. It shows how a budgetary game needs to be
constituted to be e?ective. Using and modifying
Gar?nkel’s model (1963, 1967), typologies of rules
are developed that are needed to recognize and
analyze budgeting as a game. Games have con-
stitutive rules without which the game collapses;
they have strategic rules by which the players seek
to gain the upper hand; and they live by rituals
through which roles, trust, and the beginning and
end of games as framework structures are gener-
ated and stabilized. The case analyzed is that of a
budgetary reform in Berlin in the mid-1990s.
Taking an interest in the issue of budgeting
public money inevitably draws attention to the
debate on budgetary reforms: because the burden
of public debts makes reforms urgent (Meyers,
1994), because changing cultural values enforce
reforms (Law & Akrich, 1994), or because public
sector ‘‘reforms’’ are — like ‘‘reorganization’’ in
private enterprise — a constitutive element of
daily institutional life (Brunsson & Olsen, 1993).
To declare a public sector reform is one thing:
to put it into e?ect is another. This article
examines the aptness of the game metaphor to
describe change in the administrative practices of
budgeting.
Looking at budgeting as a game is a suggestion
that has been repeatedly taken up in the past 30
years. The budgetary game is expedient as only a
paraphrase (Crozier & Friedberg, 1980; Hofstede,
1968; Lindblom, 1968). It evokes the idea that
budgeting is an activity in which situational
dynamics, opportunistic action, unpredictability,
and player interdependence play an important
role.
0361-3682/01/$ - see front matter # 2001 Elsevier Science Ltd. All rights reserved.
PI I : S0361- 3682( 01) 00008- 3
Accounting, Organizations and Society 26 (2001) 521–539
www.elsevier.com/locate/aos
* Tel.: +49-30-25491-262; fax: +49-30-25491-254.
E-mail address: [email protected] berlin.de
Studies that go beyond naming the image to
work out the game as a metaphor proceed as fol-
lows: they show how actor groups are dis-
tinguished in terms of power and implementation
chances in the game (Christiansen & Skærbæg,
1997); how resources are concealed and revealed
in interaction between players (Kaltho?, 1999;
Pentland & Carlile, 1996); what role games are
typical in public service budgetary negotiations
(Czwarniawska-Joerges & Jacobsson, 1989; Jo¨ ns-
son, 1982; Meyers, 1994; Olsen, 1970); and how
budgeting proceeds as a reciprocal strategic pro-
cess (Meyers, 1994).
Using the game metaphor with reference to
reforms permits new insights into how change
manifests itself administratively. To show this,
existing approaches are ?rst explained, and then
(Section 1.2) the approach referred to here as
‘praxeological’ is introduced. Two main tendencies
can be identi?ed in the relevant research land-
scape. In a positivist rationality approach, national
and international comparative studies examine the
course of reform and the preparatory control
models, time planning, and ?nal products.
1
These
comparisons o?er insight into the successes and
weak points of reforms (Banner, 1991; Banner &
Reichard 1993; Klages & Lo¨ ?er, 1997; Pallot,
1997; Wegener, 1996). The failure of reforms is
explained by de?cient framework conditions: for
example, sections of the sta? concerned block the
reform, there is too little money, and there is no
coordination. Such justi?cations mean that it is
not the model-driven reform that is required to be
justi?ed but the institution a?ected (cf van Gun-
steren, 1976; Power, 1994). In the positivist
rationality approach, budgetary reforms are mea-
sured and described against models.
The symbolic interaction approach is the second
research ten-dency in the area. It is particularly
favored in Scandinavia. It di?ers from the prag-
matic approach in that it does not compare a
model with reality, considering divergence as an
unintended side-e?ect of reform, as a re?ection of
teething troubles of a new system or even as par-
ticularly di?cult reform conditions. The fact that
reform models and the reality of reform always
diverge is explained not as the result of unfavor-
able conditions but as a fact that has, as Czar-
niawska-Joerges and Jacobsson (1989, p. 38) put
it, become a ‘‘fruitless insight’’. The symbol-
oriented investigation of reform locates changes
beyond the models: Winberg, Brunsson, and Olsen
(1993, p. 120) claim that reforms are regarded as
successful as long as they are kept simple and thus
powerfully interpretable, distinguish ideals from
practices, and are projected for the future. In the
introductory phase, interpretation changes the
original idea. Ultimately, budgeting practices
inevitably embody something much more complex
than what the reform idea stood for. Disappointed
expectations can be o?set by new reforms. From
this point of view, the function of reforms is to
rethink attitudes towards the ideal of the work
concerned, and to strengthen faith in greater
e?ectivity and e?ciency. Reforms are thus under-
stood as symbolic achievements in adapting gov-
ernmental and administrative ideals to changing
cultural values (Brunsson & Olsen, 1993; Czar-
niawska-Joerges & Jacobsson, 1989). In the sym-
bolic interaction approach, reforms are examined
as a rhetoric of change whose e?ects are captured
at the level of actor perception. By making per-
ception the central object of budgetary reform,
symbol-oriented research loses an essential aspect
worth investigating: if budgetary reforms take
e?ect not (only) where planned in the model, what
are these e?ects — leaving aside their perception
by players — at the practical level?
1.2. The praxeological approach
This article applies a praxeological approach in
investigating budgetary reforms. The point of
departure is the form budgetary reform takes if it
is considered as a game. Almost 40 years ago
(1964), Wildavsky made a contribution to this
question when he described budgetary reforms
against the background of the incrementalism
thesis: reform ought to be guided by the local and
cultural particularities of the institution to be
1
This research tradition ?nds expression in the so-called
New Public Management. For the international discourse cf.
Ferlie, Ashburner, Fitzgerald, and Pettigrew (1996); Jones,
Schedler, and Wade (1997); for the debate in Germany cf.
Banner, and Reichhard (1993); Wegener (1996); for a Berlin
discourse cf. Dehnhard (1996).
522 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
reformed and ought not to call in question too
many of the fundamental structures (1964, 1975).
Wildavsky used this incrementalism thesis pri-
marily to answer the question what good reform
planning ought to be. In his accompanying inves-
tigations he provided no answers to the question
how speci?c changes can be described analytically.
As in the approaches described above, ‘uninten-
tional consequences’ are mentioned only from the
perspective of actors perception (1975, pp. 290–
293). In the following study, the game metaphor is
used to permit an analytical description of changes
in budgeting.
The praxeological approach shifts the focus
onto budgeting processes. As far as the process of
implementing budgetary reforms is concerned,
most attention so far has been paid to the political
aspect of budgeting and to the analysis of the
interface activities between politics and the
administrative machinery (Brunsson, 1989; Czar-
niawska-Joerges & Jacobsson, 1989; Jo¨ nsson,
1982; Meyers, 1994; Olsen, 1970; Wildavsky, 1964;
Heclo & Wildavsky, 1974). It is not by chance that
investigation of the political arenas and the inter-
face work in politics and administration has
strongly emphasized the symbol-oriented e?ects of
reforms; for reforms are presented here as the
handling of a modernization rhetoric that has to
be successfully advocated politically and credibly
demonstrated. However, the consequences of
budgetary reform manifest themselves at the
administrative level. By choosing an adminis-
trative locus for the praxeological procedure,
reform becomes the subject of an analysis of
the persistencies and changes in the craft of
budgeting.
2
The subject matter of the study is intra-admin-
istrative negotiation about the distribution of
public funds. The methods chosen were ones that
demand more than a brief visit. Participant obser-
vation (Hirschauer & Amann, 1997; Spradley,
1980) can capture aspects of dealing with reform
that escape interviews and the analysis of written
documents, namely the budgeting practices that
have become part of the habitualized action
repertoire and are no longer (or can no longer be)
verbalized, as well as those that, in the eyes of
?nance experts, cannot be understood as aspects
of budgeting suitable for legitimation or repre-
sentation purposes (cf. also Wildavsky, 1964, p.
152).
Over a period of 2 months, the author accom-
panied preparations for the introduction of a new
budgeting instrument at one of Berlin’s largest
public authorities. The focus was not so much on
the particularities of administration but on what
negotiation structures develop when an authority
negotiates with other authorities on budget levels
and budget purposes. This perspective is re?ected
in the terminology used, the authorities no longer
being referred to in terms of their function for the
city (culture, sport, ?nance, etc.) but simply as
‘‘the Department’’ and ‘‘the Ministry’’.
The focus was on everyday o?ce work with its
routines: work with ?les and computers, telephone
conversations and discussions among colleagues,
emergency meetings, and talks during the lunch
break. The spatial context of observation was the
‘‘maternity ward’’ where the new budgeting
instrument saw the light of day, the Department’s
?nance section. This project thus tackled ‘‘only’’ a
very small part of a large, fragmented structure. It
was very much up to the Department to give or
restrict access to segments of administrative rea-
lity.
3
The observations presented here have thus
been subject to this external in?uence. The hand-
ling of budgeted and current ?gures is analyzed. A
great deal of time in intra-administrative negotia-
tions was spent harmonizing the parallel inter-
pretations of one and the same draft budget, one
and the same adopted budget, and the forecasts
and individual computations on which they were
based. Owing to her spatial restriction to one
observation post, the observer was able to capture
these activities only by extending participant
observation beyond the Department: she attended
2
This perspective excludes others. All activities preceding or
accompanying administrative activity are left out of account:
the political antecedents, emerging citizen commitment, the
in?uence of individual organizations (such as trade unions),
and media reporting.
3
I requested access to where ‘‘negotiation, administration,
and revision of the Department’s budget’’ took place. On the
basis of this request and a subsequent interview, I was assigned
to the ?nance section at the State Department Administration
O?ce.
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 523
meetings between authorities, conducted ethno-
graphic interviews with o?cials at the various
authorities, and studied the ?les and correspon-
dence of the authorities negotiating with one
another. To permit description of the development
of the reform over a period of 2 years’ observa-
tion, the di?erent sources of data gained in this
period are bundled and strongly aggregated.
In an examination of a speci?c case, the prax-
eology of the game o?ers an analytical concept for
a sociological understanding of institutional
change in administrative action. This concept
addresses not a general theory of social change but
a widespread phenomenon in public administra-
tion as a ?eld of research: the endless succession of
budgetary reforms in the public sector means that
institutional change is of constitutive and strategic
importance. The praxeological procedure
employed obeys a constructivist paradigm: it is
concerned not with testing hypotheses but with
exploring new perspectives on known phenomena.
Constructivism . . . requires . . . the analysis to
be kept su?ciently free of theory. According
to this view, sociological theory is primarily
an attribute of society, not of science. Too
great a correspondence with this theory, a
reproduction of parts of societal theory by
social scienti?c analysis seems to be just as
much a problem here as the traditionally cri-
ticized lack of correspondence between social
scienti?c statements and the societal world
(Knorr-Cetina 1989, p. 92).
It is a matter of pursuing an explorative strategy
and not discussing the inconsistencies in existing
theoretical approaches. The structure of the article
re?ects this intention: the description is not driven
by a theoretical question posed at the outset to
which an answer is sought. A general empirical
research issue and the status of research in the lit-
erature on budgeting and budgetary reform hav-
ing been described, the article proceeds to outline
the speci?c budgetary reform under study (Section
2). This provides the background for analyzing the
rules of the game that govern the budgeting pro-
cess (Section 3). The rules are stressed in the sense
of data exploration by the use of descriptive
headings. They do not determine what is to be
seen but develop an analysis from the material
that is presented in each subsection. Budgeting
phenomena that are identi?ed in this manner can-
not be explained by the approaches described
above. Finally, Section 4 discusses what direction
a theory of explicit and strategic change could
take that permits the budgetary process and thus
budgetary reform to be considered metaphorically
in the light of a game.
2. Public administration as a locus of budgetary
reform: the introduction of lump-sum funding
The subject of the budgetary reform on hand
can be outlined as follows. In the city-state of
Berlin, all aspects of the ‘‘cameralistic’’ structures
4
in government administration are being reformed
on a grand scale.
5
This reform also involves
introducing business administrative forms of bud-
geting.
6
This, in turn, involves shifting responsi-
bility for costs from the center to decentralized
?nancial management. It also means that the out-
lay needed to produce administrative products is
to provide the basis for determining the allocation
of public funds. As yet, however, there is no
4
Average payments obey a cameralist logic. In contrast to
managerial cost ?nding, cameralist accounting is concerned not
with the confrontation of pro?t and loss but with the compar-
ison of approved and implemented outlays (Staender, 1984).
5
Budgeting with government funds di?ers from budgeting
in private enterprise in that there is strong public legitimation
pressure (Luhmann, 1969). This ?nds expression in numerous
legal regulations establishing rules and procedures for budget-
ing. Secondly, at least in Germany, it ?nds expression in a sort
of planned economy that lays down a year in advance where
and for what purpose public funds are to be used (cf. the Fed-
eral Budget Code, the German Budgetary Principles Act). And
thirdly, it ?nds expression in the public accessibility of political
consultations such as committee and parliamentary work (cf.
the Federal Budget Code, cf. the Berlin Budget Code).
6
Business management practice is located above all in a
change from so-called input orientation towards output orien-
tation in determining costs (Wahlen & May, 1998). Input
orientation means that expenditures of the coming year are
estimated on the basis of expenditures in the preceding year.
Output orientation means that the expenditures are estimated
according to the amount and quality of administrative products
‘‘ordered’’ by parliament.
524 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
knowledge of costs in keeping with these criteria.
Since there is no point in time when municipal
authorities could ‘‘go on vacation’’ to convert
their systems and their accounts, new budgeting
criteria have to be introduced while their basis is
being ascertained. This process was examined in
the largest Berlin public authority (with a sta? of
just under 30,000) over a period of 2 years. The
new budgeting instrument under investigation is
the so-called lump-sum or block appropriation. It
brings together a large number of subheads in
three pools of costs. There are block appropria-
tions for personnel, for physical resources, and for
investments. The idea behind block funding for
personnel to provide a global budget and spending
limitation for the year is that the Department
should in future take responsibility for managing
its own money. To date, personnel costs have been
managed in such a way that personnel expenses
have been paid out of the relevant personnel sub-
heads regardless of whether the amounts esti-
mated in the budget covered them or not. From
now on, each department receives personnel costs
as a block appropriation. This block appropria-
tion may not be exceeded.
Members of the department personnel section
faced the problem that personnel costs had
hitherto been calculated as average rates for all
authorities in terms of position. Any variation
owing, for example, to the fact that department
employees work much more frequently at week-
ends, at unfavorable times, and at dangerous tasks
than district o?ce workers, was not taken into
account by the average rates. However, actual
payments were not subject to any such limitations,
funds beeing provided as needed. For the ?rst
time, the Department was now required to ?nd
out how much money was needed and for what.
In their concern that the speci?c requirements of
departmentel personnel should not have to be met
by means of supplementary estimates, members of
the Department prepared a projection, which they
sent to the superior authority, the Ministry, esti-
mating that an additional 8% of current personnel
costs would be needed, some DM 165 million.
The problem of accurately estimating lump-sum
appropriations was debated at meetings of the
Berlin Senate departments and authorities. The
minutes of these meetings reveal that the State
O?ce for Information Technology was unable to
process the individual components of salary pay-
ments for appropriate presentation. Not only the
Department but also the Ministry was provision-
ally obliged to resort to projections. A projection,
which the Ministry prepared as an ‘‘answer’’ to the
Department’s submission, rejected the basic
assumptions of the Authority as implausible and
the demands deriving from them as completely
exaggerated. The provisional settlement of the
dispute, reached by letter and in top-level talks
between the Department and the Ministry, was as
follows. Block funding for the Department was for
the moment to be at the same level as for other
authorities. If, at the end of the ?rst accounting
year, a de?cit was apparent that was clearly attri-
butable to speci?c allowance payments for
Departmental o?cers, this de?cit would be
‘‘absorbed’’.
What followed was a discussion on what
‘‘absorption’’ meant. Did it mean that all Depart-
mental liabilities would be covered? Or was it up
to the Ministry to decide the extent to which any
de?cit would be made good at the end of the year?
Once again, letters were exchanged and top-level
talks organized. The outcome remained open for
the moment. The Ministry made its decisions
contingent on the budget situation at the end of
the year, the Department demanded written con-
?rmation of the verbal commitment to cover the
entire expected de?cit. The framework for dealing
with a negative balance at the end of the ?rst
block funding year remained unsettled.
As one of the largest public authorities in Berlin,
the Department is divided into several sections
concerned with the administration of personal
data. In the process of reconstructing how per-
sonnel costs and all directly related items are
recorded, it turned out that there were scarcely
any electronically processed raw data to draw on
and it took months to assemble all the bits and
pieces of information on personnel costs. The aim
was to prepare models and formulas for an elec-
tronically processed monthly report of salary pay-
ments that would make models for ‘‘real money’’
out of the ‘‘play-money payments’’, as one ?nance
specialist put it.
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 525
Preparations for a new method of cost ?nding
were accompanied by preparations that were not
documented. Colleagues in the ?nance section
discussed scenarios for interpreting and handling
the lump-sum appropriation system, and how
Departmental budgeting would be a?ected. For
example, if the Department was now responsible
for its budget, would spending freezes be deter-
mined by the internal budgetary situation and thus
be within the responsibility of the Department?
And if this was the case, who, if not the ?nance
o?cers, would be able to judge this? But no
?nance o?cer wants to be made responsible for
blocking promotions.
Other unanswered questions concerned the reg-
ulatory framework for block funding. What hap-
pens if the balance is positive rather than negative?
Contrary to the principles of lump-sum funding,
any surplus could be taken at the end of the year
to consolidate state ?nances and distributed to
authorities that had mismanaged their resources
because they had not taken the block appropria-
tion system seriously. Not only the consequences
of a negative balance at the end of the year were
unclear, but also the consequences of a positive
balance.
When the lump-sum appropriation became
available it amounted to DM 1,760,434,000, and
thus did not include any special payments speci?c
to the department’s personnel structure. A written
statement was prepared for the Ministry, which
was intended to secure from the outset the com-
mitment made during the negotiations that such
special outlays would be covered retrospectively.
Despite the assumption that the lump-sum appro-
priation was too low, the ?nance section planned
no restrictions for the Department. As one mem-
ber of sta? put it: ‘‘We’re proceeding as usual.’’
The assumption that the de?cits were ‘‘justi?ed’’
and that they therefore had to be ?nanced retro-
spectively was behind this attitude.
At the end of a dramatically tense preparatory
phase, it was surprising that, after the new system
had been introduced, ?nance section sta? told
colleagues they would be ‘‘proceeding as usual’’.
An unexpected turn of events. Just as unexpected
were the developments that occurred during the
?rst year of the lump-sum funding system: the
Department did not need to declare a job freeze.
Indeed new people were taken on. However, state
policy set narrow limits to the Department’s
newly-won independence. Owing to Berlin’s cata-
strophic ?nancial situation, the lump-sum appro-
priation system was suspended for months in
favor of spending freezes imposed from above.
Thus people could not be promoted or positions
?lled throughout the year but only at periods
when no spending freeze was in force. Despite
‘‘normal’’ personnel management, the balance at
the end of the ?rst lump-sum appropriation year
at the Department was not, as expected, negative,
but positive. This was explained by the large
number of positions that, although approved by
Parliament and accordingly covered by personnel
allocations, had not been ?lled. A ?nancial reserve
thus accrued that was able to ‘‘compensate’’ per-
sonnel-speci?c special outlays. Moreover, the pro-
jections and the ?rst simulation models had been
faulty, as was discovered in the course of the ?rst
year. Work during this year focused increasingly
on simplifying the complex model and making it
transparent for outsiders. The submission of con-
vincing evidence that the Department’s personnel
costs were higher than those of other authorities
did not bring an adjustment of block funding for
1998. The Ministry stated that the insu?ciency of
the lump-sum appropriation must be sub-
stantiated before any adjustment could be made.
In brief, lump-sum funding has been introduced.
However, not, as proposed in the business man-
agement model, as an output-oriented system, but
as an input-oriented model.
7
A fundamental rea-
son for introducing lump-sum appropriations,
namely to shift responsibility for ?nancial detail
from parliamentary bodies and the Interior and
Finance Ministries to the individual authorities
7
The Berlin administrative reform wants to determine a
?xed number of products for block funding and to allocate the
money necessary to produce them (output oriented lump-sum
appropriation). However, this assessment requires a cost
accounting system that does not yet exist. The input-oriented
lump-sum appropriation is based on key data derived from the
medium-term budgetary planning for the whole of Berlin and
broken down into decentralised administrative unit budgets.
This procedure is also referred to as ceiling control. (On Ber-
lin’s lump-sum appropriation system see Wahlen & May, 1998,
p. 50–55).
526 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
has reproduced the problem: it is still not clear
who actually is to or is supposed to shoulder
responsibility for ?nance. The envisaged indepen-
dence of the authorities has not been realized. On
the contrary, more dependencies have been estab-
lished than before: The existing accounting system
is still in place, with the addition of a new form.
The superordinate ministries can now intervene in
both the cameralistic and lump-sum systems
(footnotes 4 and 6) . They do so by means of var-
ious types of spending freezes and by delaying
elucidation of the general conditions for lump-sum
funding.
Descriptions of reforms are frequently followed
by the obvious question whether the reform was a
success or not. Anyone who wishes to answer this
question is obliged to overlook the fact that the
evaluation of the result depends on the angle from
which the question is put, which observations are
to be taken into account, which are to be ignored,
and what timeframe is to be considered.
In the praxeological approach this question is
held in reserve. Observation and analysis are con-
cerned rather with ?nding out how a budgetary
reform becomes administratively e?ective. For this
purpose, the following section reconstructs the
practical logic of reforming by analyzing the rules
of the game.
3. Room for manoeuvre and overt reserves
3.1. Budgeting as a game
The intra-administrative rules of the game for
distributing public funds in the age of block fund-
ing are now considered. For this purpose, we take
up Gar?nkel’s metaphor of the game with its
rules. Gar?nkel (1963, 1967) concentrates on
selective and serial excerpts of everyday situations,
in which he examines how social structures are
usually and routinely maintained. By producing
‘‘crises’’, Gar?nkel observes how participants try
to save the situation from crisis, thus rendering
their rules for producing routines particularly
visible. In contrast to Gar?nkel’s use of the meta-
phor, the ethnographic observation of a 2-year-
long organizational negotiation process requires a
more dynamic concept of the game and its rules
than is provided by Gar?nkel’s experimental logic.
Whereas Gar?nkel carries out a move-by-move
analysis of simply structured game proceedings,
we are tackling a complex analysis of the negotia-
tion of negotiating rules. Gar?nkel’s three cate-
gories of rule are adopted — in modi?ed form. A
distinction is drawn between constitutive, strategic,
and fair-play rules. However, unlike Gar?nkel’s
rules, ours are culled from highly diverse resour-
ces, from statutes, regulations, and administrative
directives, from the practices and traditions of
communication in public authorities. They derive
from the format of negotiations, the ?gures. In
other words, both the legal and praxeological
levels to which the rules can be attributed are
multi-dimensional.
To construct a conceptually comprehensive
game framework means waiving description of
each speci?c rule of the game in all of its aspects.
The focus is rather on the typology of rules.
8
The
dense analytical framework means that not indi-
vidual, fragmented budgeting rules but the broad
outlines of a game are described.
Relations between the types of rules are not seen
as static. Constitutive rules can reshape strategic
rules, turning them into the opposite; fair-play
rules can peter out and at some stage cease to be
applied; new rules can establish themselves to
replace them.
The players (in our case the Department and the
Ministry) play a highly traditional game of bud-
geting for the Berlin public authorities.
9
The aim
of the game is for each player to gain as much
leeway as possible so that it can budget creatively.
This is done by struggling to get su?cient funds
for the purpose. This section describes only a few
of the rules that are particularly apparent in the
8
The game could be alternatively described by analyzing the
rules in terms of their temporal or spatial interdependence.
9
To describe the game, administrative units are reduced to a
few characteristics. Like personalities, they are attributed a
uni?ed identity, a will, and a form of action. This form of
description is a very rough simpli?cation, which is accepted as a
device for determining basic patterns relative to budgeting
without getting lost in the complexity of intermediate forms
and steps in practical administrative communication. In this
simpli?ed descriptive format, relations between political and
administrative authorities are left out of account.
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 527
lump-sum funding game. They form a unique
constellation, which, over and above the historical
and speci?c local organizational ?eld, can reveal
overarching structural patterns for calculating
social facts.
In addition to the rules of the game, the ways in
which the two players use a given rule are descri-
bed. This aspect of the game metaphor is referred
to by Go?mann (1970) as an expression game.
10
In the following game description, the expression
game is re?ected in the mutually reinforcing char-
acterization of minimalist suppliers and max-
imalist demanders.
3.2. Constitutive rules: One Round Takes a Year,
Black on White, Red or Black
Constitutive rules lay down what can be done
and what not. They are basic rules without which
a game cannot be played and which each player
takes for granted over and above his or her own
strategies, wishes, etc. In comparison with strate-
gic rules and the rules of fair play, constitutive
rules are covert rules. Their application is neither
discussed (as with strategic rules) nor character-
ized by an abundance of public rituals (as with fair
play rules). They are accessible to empirical
description and analysis only as scraps of meaning
from which the constitutive intension of the rule
can be derived. Each player expects others to do
likewise, and also expects other players to expect
this of him or her (Gar?nkel, 1963, p.190). For
example, the order in which players have their
‘‘turn’’ is a constitutive rule in most games, and is
a precondition for the game proceeding at all. The
constitutive rules of intra-administration budget
negotiations go back in large part to the rules laid
down by federal and state ?nancial regulations.
The constitutive rules that became particularly
apparent through the introduction of block fund-
ing are described below. They constitute the game
in terms of a timeframe (Section 3.2.1), doc-
umentary evidence (Section 3.2.2), and the per-
ception of costs (Section 3.2.3). What is also
described are the cultural acquisitions by which
rules are transformed into, as Go?mann puts it,
‘‘moves’’ in the game.
3.2.1. One Round Takes a Year
One Round Takes a Year is a constitutive rule in
the cameralistic governmental accounting culture.
The Federal Budget Code describes the annual
budgeting principle as follows: the budget covers
the period of 1 year and accounts must deal with
this period [x45 (1), BHO]. The ?nal accounts and
the consequences drawn from the ?nal accounts
are measured against this time frame. In practical
terms, this had the following repercussions:
In an interview, the competent Ministry o?-
cial, who inspects the Department’s personnel
costs, said about the development of block
funding: ‘‘The Department’s ‘moonshine ?g-
ures’ have been relativized. Instead of the
DM 75 million de?cit initially predicted, a
plus of DM 10 million emerged.’’ He descri-
bed the development of the ?nancial situation
from month to month as following: ‘‘In April
a DM 25 million de?cit was forecast, then the
?gure dropped; in July it was at DM 37 mil-
lion again, and dropped thereafter. In Sep-
tember a letter came from the Department
that they would be exceeding their budget by
DM 6 million. We just smiled.’’
Players in the budgetary reform game ‘read’ ?g-
ures to discover not what they mean for the day or
month but what they represent as a result at the
end on the year. The temperature charts the o?-
cial describes had no e?ect on the estimation of
the block appropriation. The most important fac-
tors were the assumptions at the beginning of the
year and the results at the end. In contrast, for
example, to the stock exchange, where the events
of a single day have ?nancial consequences, red
?gures are relevant for block funding only at the
end of the year.
11
Every activity of any player is constitutively
linked with the calculation of the ‘annual round’.
Negotiations were concerned with whether sup-
plementary payments are to be decided at the
10
For a study on the ?nancial system that applies Go?man’s
expression game model to an empirical ?eld cf. Pentland and
Carlile (1996).
528 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
beginning or the end of the ?rst block funding
year. They were also concerned with whether an
authority-speci?c cost allocation base ought to be
developed. Mutual expectations about the success
of both players’ activities are interpreted in terms
of this rhythm.
The rule was used by the Department to develop
a business management form of cost accounting
that would convince the Ministry of the de?cit
within the timeframe of the ?rst year. The Minis-
try used the constitutive rule One Round Takes a
Year to shift the onus to the Department. Adjust-
ment of the block appropriation was to be nego-
tiated not at the beginning of the year but at the
end. The Ministry had thus postponed a commit-
ment to adjust the estimate.
In negotiating lump-sum funding, annual bud-
geting and negotiating strength are closely linked.
While the Department forfeited much of its nego-
tiating strength because it could not report its
special expenses as a de?cit within the period of a
year, the strength of the other side was enhanced.
It had the year ‘‘on its side’’ and now counted on a
further year.
3.2.2. Black on White
Lump-sum appropriation negotiations are
determined by the documentation of costs (Weber:
Aktenma¨igkeit). As long as expenditures cannot
be shown as expenditures under the heads used by
the Department in calculating costs, budgeting
will disregard them. The federal budget code
states: ‘‘On the basis of the balanced books, the
ministry responsible for ?nancing prepares the
budget account for each ?scal year’’ (x337, 2). In
this ?xation on documentary evidence, ?gures are
only ‘‘there’’ when they are already past.
Figures for which there is no proof on paper are
not realities but only assumptions, and, as such,
no legitimate basis for decision making.
Two excerpts from interviews show that the
documentation of ?nancial facts cannot be seen in
isolation from the choice of presentation. And the
choice of presentation depends, in turn, on the
context in which the Black on White rule should,
in the view of the player, apply.
Question: ‘‘Once ?gures are there you can’t
avoid having to deal with them?’’ Answer:
‘‘No, you can question them.’’ Question:
‘‘And what do you do then?’’ Answer: ‘‘I take
my precautions by submitting an endless
mass of printed paper. Sensibly documented
but so complex that they push my pile of
paper aside in disgust.’’ In another context
the art of documentation is described by the
same person as follows: ‘‘If we’re clever
enough and don’t send too much, we don’t
hear the reproach that we’re burying them
under ?gures and just want to hide the essen-
tial. But we can’t supply too little, either,
because then the reproach is that we’re hiding
something and aren’t saying what we know
. . .anyway, these negotiations aren’t about
the speci?c structure of costs, they’re about
nit picking. That’s the best way to call every-
thing into doubt. Here a little million, there a
little million.’’
The Black on White rule is constitutive for the
budgeting game is so far as documentation is gen-
erated reciprocally — in the sense that the one side
documents what it believes the other side wants to
see documented and vice versa.
The basic rule Black on White is applied di?er-
ently by the two players: the Department uses the
basic rule to enhance the credibility of the person-
nel cost documentation in the current year. The
Ministry uses the rule to delay assessment and
thus to gain leeway in negotiations.
3.2.3. Red or Black
The urgency of costs is, however, not established
by black-on-white evidence. It is generated only in
a second step. Only when ?gures appear on paper
11
Not only short-term developments, also long term bud-
getary planning, which covers a 5-year period, leads a shadowy
existence in comparison to the annual budget (Andel, 1983,
p.100; Blankart, 1991, p. 331). The example of major invest-
ments that produce runaway costs after a number of years
demonstrates this ?xation on annual budgeting. What in the
?rst years of ?nancing appears to be a balance between planned
and actual expenditures, leads in the course of projects to
growing di?erences between allocated and required costs. If a
major project has been receiving public support for several
years, it becomes politically di?cult to withdraw.
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 529
not in black but in red are items particularly
important. In the cameralistic accounting system,
funds are appropriated to individual aspects of the
system. These are the supply estimates passed by
Parliament, which set a limit to spending. To
exceed appropriations, thus producing a de?cit, is
justi?ed only if it can be shown that it was inevi-
table. x27 (3) of the Basic Budgetary Rules Act
states: ‘‘Expenditures shall be made or utilized
only for the purpose stated in the budget, in so far
as and for as long as this purpose persists and only
until the end of the ?scal year. . . . (cf. also x 7 (1)
BHO).’’ A de?cit that is still shown as a de?cit
after the closing of accounts is almost auto-
matically considered undeniable.
12
For the sub-
sequent year the need therefore arises either to
increase the grant to obviate a de?cit, or to reor-
ganize ?nancing.
In the following episode a member of the min-
istry sta? summarizes the history of negotiations
at the end of the ?rst block appropriation year:
‘‘We saw the forecast of DM 75 million de?cit
as a risk and made a noise, whereupon the
others (at the Ministry) naturally shook their
heads; incidentally, it also turned out that
these were the usual moonshine ?gures the
Department produces.’’
‘‘The DM 75 million de?cit vanished into thin
air. That’s how fast it goes.’’
An outsider might be justi?ed in wondering how
several million DM can possibly vanish into thin
air. But, strictly speaking, not the costs but the
criteria by which they were computed vanished.
On the basis of the plus and minus criteria alone,
leaving aside all others (e.g. the speci?c personnel
structure at the Department) strange things hap-
pen: regardless of whether the authority has higher
personnel costs and whether they would have to
be assessed di?erently, costs can become ‘‘moon-
shine ?gures’’ and ‘‘vanish into thin air’’ as long as
what counts is an overall end-of-year plus.
Moonshine ?gures and vanishing costs are under-
standable only if the non-verbalized context is
considered, in this case the Black or Red rule. This
rule is constitutive because the players are
mutually aware that matters become intra-admin-
istratively relevant in the form of expenditure only
if they no longer have to be covered by the overall
budget but in the form of supplementary ?nancial
demands or additional funding that has to made
available. Relevance is generated by red ?gures
and excluded by black ?gures.
The two players use the di?erence between red
and black in di?erent ways. In the case of lump-
sum funding, the Department had a weapon on
hand as long as it expected forecasts of high de?-
cits. Since these cannot materialize on paper
within a year, the Department’s negotiating posi-
tion was substantially weakened by positive ?g-
ures. The Ministry used the Black or Red rule in
taking a decision on assessment of the block appro-
priation. In this connection it was concerned not
with economic personnel assessment but with whe-
ther the Department could produce black ?gures
without speci?c personnel assessment. Since this was
the case, the average appropriation amount was not
to be changed for the current or the coming year.
13
3.3. Strategic rules and an instrument: Room for
Manoeuvre and Overt Reserves, Same or Di?erent,
be Prepared and Take your Chance, Look Back
with Foresight
In addition to the constitutive rules without
which the game cannot be played, there are strategic
12
Cf.x37 LHO Berlin: ‘‘Unscheduled and extraordinary
expenditures require the approval of the Senator for Finance.
Approval shall be given only in the event of an unforeseen and
incontrovertible need. A need shall not be deemed incon-
trovertible if the expenditures can be postponed until adoption
of the next budget act or the next supplement thereto.’’
13
The importance placed on red and black ?gures in public
administration provokes comparison with e?ciency-oriented
market economics. The cliche´ has it that a negative balance has
consequences involving not the expansion but the cessation of
?nancing. A fruitful and di?erent form of contextualization is
o?ered by Law and Akrich (1994, p. 212). They use not the
criterion of state institutions versus private enterprise but the
framework of slow and fast availability of monetary informa-
tion. Where monetary information is more rapidly accessible, a
short-term to and fro between well-?nanced and de?cit-ridden
divisions of an enterprise takes place. The ground is being cur-
rently prepared in Berlin public authorities for such a trend.
530 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
rules. The literature on strategic action in budgeting
describes this with regard to capacities for organiza-
tional learning, to actor-speci?c knowledge resources
(e.g. Meyers, 1994). Here, however, actors are not
considered as the central subject matter under study
but as part of the ensemble of conditions that permit
strategic rules of the game. Go?mann (1982) puts it
succinctly: ‘‘Not, then men and their moments.
Rather moments and their men.’’ In our context,
we are thus concerned not with people and their
games but with games and their people.
Strategic rules have a binary structure. There are
two sides to rapprochement: if a player chooses
the one aspect of the rule, the other player coun-
ters with the opposing aspect. There are also stra-
tegic instruments for budgeting. In contrast to the
rules, the instrument does not have a binary struc-
ture and is used in a similar way by both players.
With this instrument budgets can be transformed
into strategic negotiation spaces. We consider three
strategic rules and one strategic instrument.
3.3.1. Room for Manoeuvre and Overt Reserves
Go?man (1970) has termed prominent activities
in negotiating on budgetary resources as covering
and revealing moves.
14
In the German public sec-
tor context this discourse is characterized by
metaphors of leeway, of room for manoeuvre on
the one hand and of overt reserves on the other.
15
Room for manoeuvre can be obtained in several
ways. Two are outlined below:
When savings are called for, authorities pro-
pose cuts that prove on closer inspection to
be impossible (e.g. because the law prohibits
it). If the impracticability of such a proposal
is not realized by the control authorities in the
state, the authority has ‘‘gained room for
manoeuvre’’.
It is the implicit target to establish scope for
action by holding and gaining room for manoeuvre.
For good reason public verbalization is evaded to
a large extent. A budget specialist described this
evasion as follows:
As long as I was certain about my depart-
mental budget I travelled around Germany
boasting about the much better infrastructure
that Berlin had to o?er than elsewhere. Since
I am no longer certain about the level of
funding, I keep quiet. Who talks big about
the infrastructure being excellent when cuts
are on the agenda?
As Meyers (1994) states, this strategy is only one
side of the rule. The dynamics of advocacy go
hand in hand with the dynamics of control. The
control aspect in this case is the search for overt
reserves, for hidden reserves, for structures amen-
able to ‘‘slimming down’’, or a ‘‘starvation diet’’.
In the course of the introduction of lump-sum
funding such overt reserves are the positions still
?nanced by the state in accordance with camera-
listic practice, but which had not been ?lled by the
Department. For the tactical purposes of the
Ministry (which imposes spending freezes while
delaying the supplementary funding demanded by
the Department), they represent savings poten-
tial.
16
As funds without direct application they
o?er the opportunity (initially) to refuse further
negotiation on the cost-speci?c assessment of
personnel expenditure. They represent a coun-
terweight to the urgency of assessing e?ective
costs.
While such ‘‘hidden reserves’’ are not o?cially
taken into account in the basis for assessment,
they have a strategic importance in budgeting
practice. With the implementation of the block
funding system, budgeting practice is shifting from
negotiations about ?xed costs to haggling over
leeway.
17
The strategic handling of Room for
Manoeuvre or Overt Reserves gained a new
impetus with the introduction of personnel-spe-
ci?c block grants and simultaneous saving con-
straints. With the di?erent form of ?nancing and
14
Cf . Kaltho? (1999), Pentland and Carlile (1996) for other
empirical studies in which revealing and concealing play a role.
15
In German: ‘Luft’, ‘Luftnummern’, ‘atmen ?ach’, ‘da ist
noch Luft drin’ etc.
16
The process of conjuring out ?nancial reserves is descri-
bed in Peters (2000).
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 531
cost reporting, previously non-formalized areas
were now formalized. Room for manoeuvre thus
had to be found elsewhere.
The Department used the calculation of person-
nel-speci?c costs for an opposing end: pools of
costs that previously played no role could now be
put on show — as empty reserves, which at the
same time distracted attention from reserves else-
where (the funded but unoccupied positions).
These background funds give the Department
room for budgeting despite savings.
The Ministry used its tactics of delaying ?nan-
cial commitments to get its hands on newly dis-
covered reserves at the Department as a means of
achieving savings beyond drastic cuts in services.
3.3.2. Same or Di?erent
A third example of strategic rules in the case
under study has to do with treating public services
as a uni?ed structure or as a di?erentiated struc-
ture with speci?c properties.
As has already been stated public service per-
sonnel costs were, until the introduction of block
funding, calculated and allocated on a uniform
basis for each authority, be it the courts, the Berlin
Fire Service, or the Kreuzberg District O?ce. The
Ministries for Internal A?airs and Finance con-
tinue to treat authorities uniformly under the
block appropriation system. The Department
argued against this uniformity of treatment,
pointing out that structures di?er in kind from
authority to authority. Block funding o?ered the
opportunity for ?nancing appropriate to require-
ments: expenditure per person paid, calculated
speci?cally in terms of age structure, bonuses, etc.
In the following example, the two conceptions of
public ?nancing con?ict are demonstrated in con-
?ict with one another.
18
At a ?rst review meeting after two months of
working with the block appropriation system,
the ?nance o?cers of the various authorities
met with representatives from the ministries
responsible for personnel and ?nance for an
exchange of experience. The authorities com-
plained: ‘‘What happens if, as will probably
be the case, we are broke by the summer
recession?’’ The Interior and Finance Minis-
try representatives answered: ‘‘We know these
fears from when the block appropriation was
introduced in the Berlin districts. They
proved to be unfounded.’’ The authorities
again: ‘‘Our personnel cost structures can’t be
compared with those of the districts. And
they are also very di?cult to compare
between authorities. We need block funding
speci?c to each authority!’’ The response:
‘‘Your de?cits are absorbed at the end of the
year.’’ The departments: ‘‘But we don’t want
to receive our income only in the end-of-year
procedure. It can’t be the idea of block fund-
ing that the revenues we take care of aren’t
available to us.’’
Exploiting the distinction between Same or Dif-
ferent provides strategic options in all negotiations
on costs where responsibilities are not con-
tractually attributable to one or other party. Stra-
tegically exploitable room for manoeuvre arises in
interpreting organizational objectives, loyalties,
and responsibilities.
The Same or Di?erent rule is used di?erently by
the two players. The Department used one part of
the rule to emphasize the di?erences between itself
and most other Berlin authorities. It justi?ed sup-
plementary payments.
The Ministry used the other, ritualized part of
the rule in calculating all personnel costs uni-
formly. It explained its reasons as follows: if the
17
The Room for Manoeuvre and Overt Reserves game is not
restricted to the speci?c budgeting culture under study. The
rules of the game are strategic rules that structure the give-and-
take in ?nancial negotiations. This form of ?nancial negotia-
tion is also manifest in the media performance put on by
industrial associations when an increase in charges and taxes
threatens. As long as the taxman spares or favors private
industry, silence reigns, which only becomes evident when
additional burdens become politically relevant. The associa-
tions then react with complaints and threats about relocations
and job cuts.
18
In business organizational forms, too, the distinction
between Same or Di?erent is used as a strategic negotiating
resource. Organizational models that provide for an entrepre-
neurial centre with central powers and specialised units/enter-
prises largely independent of the centre but assigned to it with
their own rights and duties, invite the exploitation of negotiat-
ing latitude in deciding where unity stops and di?erentiation
starts.
532 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
speci?c characteristics of the various authorities
are balanced against one another, they ultimately
o?set one another.
3.3.3. Be Prepared and Take Your Chance
In times of ?scal stress the basic rule One Round
Takes a Year developed into a strategic rule.
Annual budgeting as a constitutive rule of the
game serves no longer only as a period but, as far
as ?nancial promises are concerned, rather as a
framework for a sequence of points in time. In the
?rst block appropriation year the situation was as
follows:
From January to March no budget came into
force. The authorities operated with an emer-
gency budget that permitted only the una-
voidable spending. Immediately after the
allocation of block funding in early March, a
job freeze was imposed. From then on this
pattern was repeated throughout the ?nancial
year: job freezes, spending freezes, and the
blocking of speci?c items were declared, lif-
ted, and declared again. During an informal
talk on the occasion of a meeting, the ?nance
experts of two authorities discussed how
much time they had between the emergency
budget and the job freeze (‘‘We had four
hours. Managed to get three things through,
though.’’ ‘‘We had one and half days.’’). A
Ministry o?cial reported that the authority
he was in charge of managed to ?ll 1000
vacancies pre-programmed for this point in
time at the press of a button.
The two players use the Be Prepared and Take
Your Chance rule in di?erent ways. The Ministry
imposed temporary spending freezes to gain con-
trol over the excessive requirements of authorities
and in?uence over the spending behavior of the
authorities.
The Department had control over its own bud-
get only at the points in time when the spending
freezes were lifted. Whatever happened within the
period of a year, e.g. promotions, was, as far as
possible, now done in the periods between spend-
ing freezes.
3.3.4. Looking Back with Foresight
Prognoses serve as a forecast, a simulation, or as
a projection. As an instrument prognoses set the
level of expectations for the three strategic rules.
The e?ects of prognoses cannot be dealt with here
in full detail. Only one aspect of it is discussed,
namely that which shaped the strategic negotiating
scope for the three rules mentioned above.
19
The
forecasts re?ect expectations on ?nancial develop-
ments. As on the stock exchange, it is a matter of
moods and trends. If worse times are expected,
there are gloomy forecasts; if better times, the
forecasts are more con?dent. Figures are provided
with an interpretative context and vice versa an
interpretative context with ?gures. For this rea-
son, the instrument is called Looking Back with
Foresight.
With the introduction of lump-sum funding,
interim forecasts gained in importance, because
the new way of recording costs — no longer by
cost centers but by heads — was a source of
uncertainty. They showed whether foreseeable
?nancial developments and errors in forecast
models had occurred that radically changed the
annual forecast. The forecast became an aid in
interpreting data, and thus had a substantial
in?uence on the players and their playing beha-
vior. In this situation, the two players used the
Look Back with Foresight rule to permit them to
make their most negative fears about the develop-
ment of the ?nancial situation the basis for fore-
casts.
It is probable that managerial cost accounting,
once standardized for all authorities, will be of less
strategic use for either side. The normed categories
have considerable de?nitional power on both sides
of the table of negotiation. At this point the stra-
tegic rule becomes a constitutive rule. For the
moment however standards for economic cost
categories are not yet set.
19
Other aspects of the forecast discussed in the literature
are, in particular, instrumental questions about possibilities to
calculate the future (Premchand, 1983); incremental questions,
namely looking for the determination of actual prognoses
through previous budget structures (Wildavsky, 1964); and the
de?nititorial power of fore-casts over what is understood as
reality (cf. in general Miller & O’Leary, 1990).
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 533
3.4. Rules of fair play: The Role Game, The Trust
Game, The Endless Game
In addition to constitutive and strategic rules, a
third type of rule is revealed by analysis of block
appropriation practices. The rules of fair play
include rules that de?ne the common interpreta-
tion of the game. Whoever disregards them is a
‘‘bad player’’, a spoilsport. Three such rules will
serve as examples. Depending on the given situa-
tion and who is involved in negotiating budgets,
di?erent fair-play rules can apply, without the
rules having to be mutually free of contradiction.
3.4.1. The Role Game
The players perceive each other on the basis of
ritualized role patterns. These existing role attri-
butions had a strong in?uence in the introductory
phase of block funding. Two pertinent quotes give
an insight in what is at stake with such a rule:
‘‘The Department had a 100% reserve men-
tality. Within the Department people believed
they could be denied nothing. Given their
speci?c function in the city, their demands
would have to be met’’ (statement by a Min-
istry o?cial). ‘‘The Ministry is not aware of
the dimensions we’re talking about in the case
of personnel block funding. Their main inter-
est is to keep negotiations open as long as
possible’’ (statement by a Department o?-
cial).
In implementing the block appropriation sys-
tem, the Department assumed the role of the per-
son ‘‘who always asks for too much’’ and the
Ministry assumed the role of the person ‘‘who
always makes swingeing cuts even if he can’t fully
appreciate the position.’’
20
The Department pro-
jection was rejected by the Ministry as excessive
and implausible; the counter estimate presented by
the Ministry, which was much lower, was not
accepted by the Department because it was alleg-
edly unrealistically low. In determining the level of
expectations for negotiations, a bargaining rule
has developed in the public service, which can be
formulated as follows: since cuts can always be
expected, the demander is well advised to ‘‘calcu-
late’’ as much as possible. The supplier need not
count on its savings targets being met, so that they
have to be set higher from the outset. Both sides
know both rules. Where the respective ‘‘pain
threshold’’ lies beyond which face could be lost is
an open question. These conditions result in dif-
fering ritual ways of playing the game. The more
drastic the terms in which the budgetary position
is portrayed by the funding party, the more urgent
will be the needs reported by the authorities. If a
party has once gained a reputation as a ‘‘max-
imalist’’, it will have no choice but to live up to
that reputation. Regardless of whether this is
understood as mere (individual) prejudice or an
accurate judgment, the important thing is that
such aids to interpretation take on strategic weight
in negotiations, thus committing the other side to
the complementary role. In the constantly recur-
ring budgeting game, the parties’ conceptions of
themselves and their interlocutors become ?xed
with regard to how the funding demands of public
authorities are judged in terms of their roles.
In the Role Game (Section 3.4.1), the exploitable
resources are dramaturgy and rhetorical force: the
maximalist demanders have their backs to the wall
(as far as savings are concerned), while the minimal-
ist suppliers ‘‘bow to reality’’ (as far as the cata-
strophic ?nancial situation of the state is concerned).
20
What are here described as the roles of ‘minimalist sup-
plier’ and ‘maximalist demander’ are referred to in organiza-
tional sociology budget research as spending advocates and
controllers/guardians (Czarinwska-Joerges & Jacobsson, 1989;
Jo¨ nsson, 1982; Meyers, 1994; Wildavsky, 1975). In contrast to
Wildavsky, Meyers (1994) points out that role distribution is
not tied strictly to the institutional locus but to situations. The
Berlin Budgetreform exempli?es this in ?nancial negotiations
involving more than two parties. Here the range of roles is
broader. In the case of block funding implementation at the
departmental level, the Department is in the same boat as all
those public authorities that pay money for dangerous working
conditions, allowances for shift and night work, weekend work,
and work at unfavorable times. In Berlin, they include, for
example, the Fire Service. In this coalition, the Fire Service is
the authority that, in contrast to the Department, did not
vehemently push its demands for supplementary grants.
Whereas the Ministry played the role described above vis-a` -vis
the Department, the Berlin Fire Service played the role of the
character who has to be looked after and who has to be
encouraged to insist on its rights.
534 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
3.4.2. The Trust Game
In the implementation of the block appropria-
tion system, the superior authority has neither
extensive insight nor the capacity to control the
subordinate authorities. It must therefore rely on
wide-meshed control and on trust. Vice versa, the
subordinate authority has to rely on its forecasts
being accepted and on its interests being repre-
sented by the controlling authority vis-a` -vis other
state authorities. There is thus a necessarily
mutual relationship of trust, which both sides
hedge about with numerous structural aids.
21
One
such institutional structure is that every level in
the administrative hierarchy in one authority has a
corresponding level in the hierarchy of the other.
Contacts between authorities are generally
between ‘‘peers’’. Along these multi-level commu-
nication lines, settled working relationships are
established, thus stabilizing control and trust
relations.
The Trust Game allows players to test the limits
of con?dence: imperative funding and imperative
requirements, from being absolute categories are
now negotiable.
3.4.3. The Endless Game
Negotiations on an adequate block appropria-
tion were characterized by a use of language that
suggests linearity (‘‘adopted’’ budgets, ‘‘com-
pleted’’ ?nancial years). A look at negotiation
structures, however, suggests a circular process
that is functional precisely because it has no end
(cf. also Peters, 2000). This can be reconstructed
from the correspondence on the lump-sum alloca-
tion system as follows.
The o?cial document that announced the
introduction of uniform block appropriations
left open the question of special arrangements
and ecxeptions. The Department argued on
the basis of these conditions and submitted a
well-founded assessment of demand. The
game thus went into the second round.
In the second round the Ministry managed to
impose its proposal to wait until the end of
the ?rst year for the special payment.
The third round in the budget game now
began: the promise of supplementary pay-
ments at the end of the year could be inter-
preted in more than one way. The
Department demanded a clear undertaking.
Following an exchange of letters and meet-
ings at the executive level, this clear under-
taking was given.
The fourth round, in view of the good results
for the year, further negotiations on person-
nel cost assessment were postponed by the
Ministry until the following years.
In negotiations on the allocation of public
funds, a mutual willingness to cooperate is main-
tained by keeping negotiations open. With the
help of a concatenation of temporary decisions,
controversial issues are postponed and watered
down. Negotiations on taking account of the
Department’s special personnel payments in block
funding remained open. Neither a winner is pro-
claimed nor the end of the game declared.
The Endless Game was used by minimalist sup-
pliers during the introduction of block funding to
refer demands for more money to the future and a
better budgetary position. In contrast, the max-
imalist demanders gained room for manoeuvre by
referring to past ?nancial commitments that
should, in their view, be implemented in the future.
3.5. The Reform Game
In sum, the game is about the art of gaining and
holding as many resources as possible (in the form
of money) to establish scope for action. The
introduction of block funding a?ected some of the
budgeting rules:
(1) Annual budgeting as a constitutive rule in
the budget game no longer guaranteed
?nancing for an authority for a year but only
provided an advance, the ?nal amount being
negotiated at the end of the year on the basis
21
The mutual relationship is also brie?y described in Wild-
avsky (1975, p. 69f.).
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 535
of actual and substantiated expenditures.
Pro?ts and losses are not, as postulated in
the block funding model, ‘‘permissible’’ and
in the responsibility of the authorities. It was
a matter of constitutive consolidation: if a
surplus was suddenly earned it was skimmed
o?; if a de?cit threatened, a budget freeze
was imposed to prevent it. Through this
form of crisis management, the rule One
Round Takes a Year was not only a con-
stitutive but also a strategic rule.
(2) To allow them to control their own budgets
under such restrictive ?nancial conditions,
the authorities prepared themselves to rush
through during the brief periods when their
budgets were at their disposal what they had
been used to spreading throughout the year.
The Be Prepared and Take Your Chance rule
makes speci?c points in time in the course of
the year rather the ?nancial year relevant for
budgeting.
(3) The strategic instrument Look Back With
Foresight is developing into a constitutive
rule: a new form of budget control has been
arising from the documentation and stan-
dardization of monthly payroll payments in
accordance with economic criteria. The
development internal controlling, in the
broadest sense of its meaning, was and is
in?uencing the perception and organization
of how public funds are distributed. The
individual authorities have become subject to
such economic monitoring.
(4) The strategic utilization of Room for Man-
oeuvre and Overt Reserves was stirred up
anew by the fact that managerial cost
accounting made previously non-formalized
areas describable, and, vice versa, lessened
the importance of previously formalized
areas. The game of hide and seek thus gained
a new dynamic. Block funding not only pro-
duced a completely new form of budgeting; it
also changed the traditional game of seeking
to win and keep as many (?nancial) resour-
ces as possible through new rules and ways
of handling rules. A strategic instrument thus
developed into a basic rule and a basic rule
became a strategic rule.
Wittgenstein ([1956]1989) says: ‘‘Whoever
describes with a rule [. . .] does not forsee the
application that he will choose in a speci?c case of
the rule.’’ The relevance of the rule concept, as it is
outlined here, lies in its situational and contextual
e?ects.
22
The rules are not understood and used as
external criteria. For an analysis of the imple-
mentation of reforms in budgeting practices the
rule concept merges the substance of the law with
well-tried traditions of interpretation, with the
exercise of statutory discretion and the changing
cultural contexts of interpretation. The basic rule
One Round Takes a Year, for example, is often
violated without provoking sanctions. If, for
instance, elections take place in Berlin in autumn
and the new government is not in a position to
pass the budget before the coming March, this is a
legitimate justi?cation for ignoring the rule. And
this is not a rare occurrence (cf. Zahradnik, 1997).
The criterion governing the use and interpreta-
tion of the rules described above is the production
of legitimacy. Providing public testimony on
pro?ts and losses means having to prove that the
taxpayers’ money has not been wasted (in the
event of a loss), but also that the government is
not guilty of failing to render necessary assistance
(in the case of a surplus; cf. Peters, 2000). The art
of budgeting investigated in this article is the art of
players convincingly underpinning the legitimacy
of their positions in negotiating by creatively
handling existing rules, either by reproducing,
modifying, maintaining or dropping them.
4. Conclusion
In this analysis, the game metaphor has been
applied in describing budgeting processes as
administrative work. As a descriptive and analy-
tical format, the game shows how expicit change is
generated on the stage of intra-administrative
negotiation. In a close meshing of ritual, strategic
and constitutive rules, each player pursues the
22
This rule concept refers to Wittgenstein’s deliberations
([1956]1989), the ethnomethodological debate on the rule con-
cept (cf. Bogen, 1993; Coulter, 1995; Lynch, 1992) and con-
sideration of policy planning and reform processes (van
Gunsteren, 1976).
536 K. Peters / Accounting, Organizations and Society 26 (2001) 521–539
goal of gaining or retaining the greatest possible
scope for action. For this purpose, all the rules
that help the player to legitimize his or her own
position are demonstratively used. A budgetary
reform provides a number of new game resources:
resources that are woven in as the legitimation of
strategic interests (Room for Manoeuvre or Overt
Resources), which make it possible to use existing
rules di?erently (One Round Takes a Year), which
are continued in new rules (Be Prepared and Take
Your Chance), which create new rules (Look Back
with Foresight), and which do not a?ect certain
parts of intra-administrative negotiations at all
(Red or Black, Same or Di?erent, Role-Game).
This observation of budgeting and reform as a
practical administrative game shows the structural
di?erences between the negotiating processes in
1995 and 1997. The changes that occurred have
not resulted in a major breach or profound
uncertainty, but take e?ect in various modi?ca-
tions of activities, rather insigni?cant in them-
selves, which were largely not envisaged by the
reform models. This ?nding is not very surprising,
when one considers the widespread preconception
about ubiquitous resistance to change in (Ger-
man) public administration. However, it goes
beyond mere con?rmation of this prejudice. The
empirical analysis level chosen showed ?rstly the
speci?c complexity of reform projects, the micro-
structural changes in the practical administrative
activities and the rules of the game to which it
gives rise. No reform model can encompass this
complexity so completely that it can determine in
advance what direction has to be taken in the
established modes of playing to attain the goals
set. Secondly, the analysis of such processes of
change shows what multi-layered practical rules
the budgeting process obeys. From this point of
view, legislative changes constitute only a setting,
not an administrative reform. Only when the
actors concerned make it part of the games they
play and thus of local budgeting as intra-adminis-
trative negotiation does it take speci?c e?ect. In
the context of an analytical understanding, the
practice of budgeting as intra-administrative
negotiation shows that this activity is con-
ceptualized as a continuing game, as concrete
social performance. It consists principally in
interpreting ?exibly couched sets of ?gures in such
a way as to produce a budget that is designed to
be temporary and can ?nd public approbation.
The speci?c case study thus produces the follow-
ing general results:
1. The budgeting game can capture ‘‘unin-
tended consequence’’ bescause it contrasts
results against the original reform models
and thereby identi?es changes that could not
have been foreseen by the model.
2. What remains an operational black box
when analysis of reform concentrates on the
political components of budgeting (Bruns-
son, 1989; Brunsson & Olsen, 1993; Czar-
niawska-Joerges & Jacobsson, 1989; Olsen,
1970), can be reconstructed through the
empirical analysis of administrative games as
central components of explicit and strategic
change.
3. According to this study, insight into the
constitutive structural level of administration
is essential in understanding how reforms
attain social reality. Legislation, the discre-
tionary powers it grants, well-tried traditions
of negotiation, modes of calculating, the sta-
tus of technology, and how sudden dis-
turbances are handled feed into the speci?c
changes by which reforms are accomplished.
4. This approach, described above as prax-
eological, allows the view of reform to be
contradicted that, concentrating on the sym-
bolic performance of budgeting, sees the
budgeting process as merely re?ecting chan-
ges discussed in other areas (Czarniawska-
Joerges & Jacobsson, 1989, p. 31). Examina-
tion of intra-administrative negotiating
structures has sharpened the focus on the
question of where the potential for explicit
and strategic change in budgeting is loca-
lized.
5. A distinction must accordingly be drawn
between, on the one hand, inventing and
imposing reform projects in political arenas,
and, on the other, mobilizing resources and
giving shape to the reform at the adminis-
trative level. As negotiations between the
Department and the Ministry in the case
K. Peters / Accounting, Organizations and Society 26 (2001) 521–539 537
study show, it is not useful to examine the
budgeting process in isolation from speci?c
administrative interests. It is part of all
negotiation about scope for action, which
invariably seems to take a monetary form.
Although the signi?cance of intra-adminis-
trative negotiations for the shaping of bud-
getary reforms has long been no secret, it is
repeatedly a blind spot in scholarly description.
Acknowledgements
I am grateful to the Financial Experts of Berlin
Ministries for granting me the opportunity to do
my observations. I also owe thanks to the Metro-
politan Research Group at the Social Science
Research Center Berlin for ‘‘setting me on track’’,
to Klaus Amann and Trevor Pinch for valuable
suggestions and comments, to Michael Power for
his support, and to two anonymous reviewers.
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