Which budgeting approach is popular but simply replicates past spending patterns?

Incremental budgeting is a popular approach that focuses on using the previous year's budget as a base and making adjustments for the upcoming period. This could involve adding or subtracting a percentage based on expected changes like inflation, policy shifts, or anticipated revenue changes. The quantitative nature of incremental budgeting makes it straightforward, as it often requires less time and effort to compile compared to other budgeting methods.

However, one of the key criticisms of this approach is that it may not encourage critical evaluation of programs and services. Since it simply replicates past spending patterns, it can perpetuate inefficiencies and may not account for shifts in priorities or changes in organizational needs. As a result, while it may provide a familiar framework for budget preparation, it does not promote innovation or adaptability in resource allocation.

Zero-based budgeting, on the other hand, requires justification for every expense, starting from a "zero base" rather than the previous year's figures. Performance-based budgeting focuses on the outcomes and results of spending, and program budgeting is oriented around specific programs rather than line items. These alternative methods are designed to evaluate and improve the allocation of resources, in contrast to the more mechanical approach of incremental budgeting.