Inventing the Federal Government's Planning, Programming, and Budgeting System

When Robert McNamara left Ford Motor Company to become the U.S. Secretary of Defense under President John F. Kennedy, he brought with him the belief that most national defense issues could be partly understood as a huge production system that could be rationally organized for optimal efficiency. That same year, RAND economists Charles Hitch and Roland McKean had published The Economics of Defense in the Nuclear Age, which argued that, as RAND's work throughout the 1950s had shown, military problems were, in one important aspect, economic problems of efficient use of resources and could be better understood and addressed with the tools of economic analysis. McNamara embraced the intellectual concepts of the book and Hitch became Assistant Secretary of Defense–Comptroller. Hitch proceeded to assist in creating a new Planning, Programming, and Budgeting System (PPBS) based on the processes of analysis and budgeting outlined in the book and on earlier RAND work on new governmental budgeting and accounting procedures led by David Novick. In the ensuing years, the PPBS approach spread to nonmilitary departments of the federal government as a means of centralizing, depoliticizing, and bringing rational analysis to policymaking and budgeting. Novick's book Program Budgeting, which extended the approach to nondefense arenas, became an overnight federal best-seller in 1965. Quantitative modeling and economic analysis have since routinely informed federal policymaking, and PPBS remains an important part of the structure that embodies this approach.

The Economics of Defense in the Nuclear Age — 1960

Program Budgeting: Long-Range planning in the Department of Defense — 1962

Program Budgeting: Its Underlying Systems Concepts and International Dissemination — 1970

How Much Is Enough? Shaping the Defense Program, 1961-1969 — 1971

Program Budgeting: Program Analsysis and the Federal Budget — 1967