Budget Constraints and Multiobjective Planning

Abstract

The purpose of this paper is to explain the relation between multiobjective planning of public investment programs and the use of budget constraints, because this important matter is normally not considered in governmental proposals of new planning methods. The multiobjective approach to planning includes: (1) identification of the several objectives of the public organization for which the plans are being made; (2) for each objective development of metrics of its benefits and costs; and (3) design of alternative programs that emphasize alternative combinations of objectives as a means of showing how governmental and private actions can contribute to objectives. In a formal sense a budget constraint is a limit on the total expenditure that can be made for a project or program; and if the constraint is binding, it affects the design of the project or program.