Budgeting for Innovation: How Funding Strategies Enable or Constrain Public Sector Experimentation

Ringa Raudla, Külli Sarapuu, James W. Douglas, Johanna Vallistu and Nastassia Harbuzova

Public Budgeting & Finance, 2025, vol. 45, issue 4, 28-40

Abstract: We investigate how different funding strategies influence the incentives and capacities of government organizations to undertake experiments. We focus on the effects of “earmarked” vs. “hodgepodge” funding and the implications of different approaches to designing earmarked funding (system‐level vs. organization‐level; top‐down vs. bottom‐up). We conducted 66 interviews with public officials in Estonia and Finland. We find that different funding strategies influence the scope of public sector experiments. System‐level top‐down earmarked funding facilitated the launch of strategic large‐scale policy experiments in Finland. Reliance on hodgepodge funding of experiments in Estonia has led to predominantly small‐scale experiments and increased transaction costs.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/pbaf.12402

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:pbudge:v:45:y:2025:i:4:p:28-40

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0275-1100

Access Statistics for this article

Public Budgeting & Finance is currently edited by Philip Joyce and William Simonsen

More articles in Public Budgeting & Finance from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().