abstract:Zero-based budgeting is an approach to planning and decision-making which reverses the working process of traditional budgeting. In traditional incremental budgeting (Historic Budgeting), departmental managers justify only variances versus past years, based on the assumption that the "baseline" is automatically approved.
In the early 1970s, then-Georgia Governor Jimmy Carter used zero-based budgeting as a way to focus on justifying every dollar that was being spent in the state government.