Rational and Feasible Budget Allocation

Scarce resources can be allocated to budget categories by processing a set of goals to be achieved, alternative budget categories and relations between each budget category and each goal expressed in whatever terms with which the user is comfortable. A concrete example is given involving the allocating of a $500,000 budget to the police and the courts in the light of the goals of crime reduction and fair procedure in separating the innocent from the guilty. The police do better than the courts on crime reduction, but the courts do better than the police on fair procedure. Fair procedure, it is suggested, is considered more important than crime reduction. With that tentative assumption one can determine what proportion of the budget should be allocated to the police and what proportion to the courts. Initial allocations may be changed in the light of whatever constraints exist concerning minimum amounts that need to be allocated to the police or the courts. The initial allocations can also be subjected to a sensitivity analysis, to see how responsive they are to changes in the inputs concerning the relative importance of the goals and the nature of the relationships between each budget category and each goal.