What we know and what we don't know about participative budgeting: a systematic literature review

  • Thales Engelfried Leuphana University Lüneburg
  • Lara Hirdina Leuphana University Lüneburg
  • Finja Rauschenberger Leuphana University Lüneburg
  • Lauritz Schulz Leuphana University Lüneburg
Keywords: participative budgeting, cooperative budget, budget participation, principal-agent theory


This literature review sought to assess the theory of participative budgeting in order to provide a review of the underlying theories and to give practitioners grounds to evaluate current organizational situations. To achieve these objectives, 65 articles from 48 journals, published between 1975 and 2019, were analyzed, of which 22 were closer examined.
Our research suggests that participative budgeting cannot be seen as generally beneficial regarding job satisfaction, overall performance, and the creation of budget slack. Instead, its practicability is strongly dependent on multiple variables, such as distance in power, information asymmetries and personality types, which should be considered when implementing the budgeting method.
This study presents an overview of the existing literature and offers an agenda for future research containing recommendations that highlight yet unexplored questions about the budgeting process.