Public budgeting and public policy are inseparable: the rules that govern expenditure decisions also govern the making of public policy. Budget scholarship has long recognised that budget institutions are not neutral—the mechanisms of budgeting are competitive strategies that shape whose preferences prevail and how policy choices are made. These institutions also cannot be understood purely by their formal structure; rules are interpreted and applied by actors in ways that shape what they do. This matters because the bureaucracy plays a substantive role in policy formulation: significant policy choices are shaped by officials within agencies, upstream of formal decision points.
Despite this, the procedural budget rules that structure policy formulation within bureaucracies have received comparatively little scholarly attention, and their policy consequences have largely been treated as a byproduct of budget institutions. This paper argues that procedural budget rules should be understood as a deliberately selected category of procedural policy instrument—tools that operate not on policy targets directly, but on the policy process itself, structuring the behaviour of policy actors and the design of government programs. This reframing situates procedural budget rules within the policy design concept of procedural policy tools.
The paper presents a theoretical framework for examining the policy effect of procedural rules that integrates three analytical perspectives: organisational, behavioural, and policy. The organisational perspective treats procedural rules as formal organisational rules operating within a broader rule ecology, examining specific rules within their institutional context. The behavioural perspective examines how rules are interpreted and enacted by policy officials—a process that is neither uniform nor passive, and that is conditioned by a layered set of factors. These two perspectives are adapted from DeHart-Davis’s organisational rules framework incorporating broader insights on budgeting and rule-structured behaviour. The third perspective addresses the downstream consequences of rule-structured behaviour: how procedural budget rules shape option generation, proposal framing, and the design choices embedded in programs, including instrument selection and program structure. Taken together, the framework proposes two parallel pathways from procedural rules to the dimensions of policy design—instrument filtering, through which rules shape the set of policy instruments considered available; and the structuring of policy work upstream of formal decision points, within policy agencies.
While developed in the context of Australian budget processes, the integrated framework is applicable to any form of procedural governance rule whose policy consequences remain underexamined.
