The Political Economy of Capital Budgeting

Abstract

The micro approach to the study of the capital budgeting process is illustrated and advocated by this article not as an alternative to the common macro perspective but as a necessary complement. The case describes and explains why the political feasibility of capital budgets may not assure the availability of operating funds. The case is offered as a possible M. P. A. capstone exercise because its analysis requires synthesis and mobilization of knowledge from other courses.

Keywords:

• capital budgeting
• feasibility
• policy agenda
• political economy
• stakeholder analysis