We offer a new inferential procedure for identifying nonincremental outcomes. Statistical results based on post WWII data series of agency outlays support the model's predictions. Specifically, the Democrats control over the political process, a switch in the party controlling the White House or Congress, and presidential election year promises and political vulnerabilities all appear to cause departures from incremental budgeting. A persistently large deficit and a higher discount rate have a similar effect.
Results are robust across various specifications.
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