| Abstract: |
We know for a fact that changes in budgets follow a leptokurtic or power law distribution. We have solid evidence that the degree of leptokurtosis can be explained by factors such as special features of policy areas, information processing, decision costs, and differences in the institutional setting (Jones & Baumgartner, 2005a; 2005b, Breunig, 2007; Jones, Sulkin and Larsen, 2003; Breunig and Koski, 2006). However, we do not know why leptokurtosis is omnipresent. In this paper we conjecture that leptokurtosis can be explained by four simple observations which must be true of any budgeting process: (1) that several actors request and spend budgets, (2) several actors allocate funding, (3) that actors which do not receive sufficient funding will eventually close down, and (4) that available funding is limited and often smaller than requested funding. We first review the literature on policy punctuations and leptokurtosis, and identify the four simple observations. We then discuss how a simulation can be useful in investigating the implications of these four observations, and introduce a simulation of the interaction of beggars and philanthropists in a budget game. We show that the four observations can account for the omnipresence of leptokurtosis at the sub system level. They cannot, however, explain the magnitude of leptokurtosis found in empirical distributions of budget changes. |