| Summary: | The aim of this study has been to explain the relationship between capital (development) expenditures and the growth of recurrent expenditures in the Zambian Ministry of Agriculture and Water Development (1975-1983). Three models were developed and tested.
The first model tested the theory of incrementalism. Proponents of incrementalism advocate that the recurrent budget in a previous period is the most important explanatory variable in the determination of recurrent budget expenditures in the subsequent period. An extension on the first model included capital expenditures in the determination of recurrent budget expenditures. Theories have been advanced that capital expenditures cannot be undertaken without affecting the growth of recurrent expenditures. A third explanatory model included the stock of capital, the recurrent budget in the previous period, the rate of inflation, and the lagged price of copper as important variables in the determination of recurrent budget expenditures.
Ordinary least squares (0LS) estimation techniques were used to obtain the coefficients and the magnitude of the variables in these three models. The third model explained 98% of the variation in recurrent budget expenditures. The results showed that the recurrent budget in the previous period and the rate of inflation were the most important explanatory variables
in the determination of the recurrent budgets in Zambia. The price of copper and the stock of capital, although both having a positive relationship with the recurrent budget in the subsequent period, were weak determinants. The study noted that the weak relationship between the capital and recurrent budget may be due to the ad hoc transference of recurrent costs, created by capital projects, to the recurrent budget. The study suggests a policy for the transference of these costs to the recurrent budget. === Land and Food Systems, Faculty of === Graduate
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