The Origin and History of Program Budgeting

by David Novick

Fall 1968

Volume 11
Issue 1

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Certain elements of program budgeting are as old as civilization. To a greater or lesser degree, every rational person makes plans for allocation of his limited resources, has certain goals or objectives, and considers alternative means of achieving these. The concepts and methods of program budgeting as it is understood and practiced today are, however, of relatively recent origin. There are two roots of these concepts and methods, one in the federal government where program budgeting was introduced as part of the wartime control system by the War Production Board in 1942, the other root, a longer and older one, in industry. A plan was designed to identify the material and component requirements for contracts that were being placed by the military and, probably more important, to measure the inventories and capacities of the U.S. producing industry. It was an interim step on the road to a program budget, since it provided the first over-all picture of the U.S. needs and resources for war.

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