Managing Multiple Institutional Logics in Public Budgeting: A Qualitative Study at Two Ministries of Foreign Affairs

Abstract: The purpose of this study is to create an understanding of how Ministries of Foreign Affairs (MFAs) manage institutional complexity in their internal budgeting processes. By looking at public budgeting through an institutional theory lens, we study organizational behavior driven by institutional logics. These are broad and abstract sets of values, beliefs and principles that influence the interpretation of social situations. We employ an abductive research methodology, supported by interviews conducted at two North-European MFAs. The main findings are twofold. Firstly, we re-conceptualize the compromise tactic from Carlsson-Wall et al. (2021) into what we call situational dominance. We define this as the dominance of one logic and suppression of the other due to pressures extremifying the underlying hierarchical ordering of logics. Secondly, we integrate budgeting literature with institutional theory to conceptualize observed behavior we call institutionally acceptable gaming. This tactic is conceptualized as behavior deviating from intended budgeting processes, but still in accordance with institutional logics and thus tacitly tolerated throughout the organization. We contribute to institutional theory and public budgeting literature by further conceptualizing responses to institutional complexity in budgeting processes.