This approach, elaborated by the RAND Corporation, USA in the middle of 60s attempted to integrate in one system the elements of planning, programming and budgeting all together and was called “planning‐programming‐budgeting system” (PPBS). The abbreviation PPBS stands for the following three phases of this procedure: a) Planning is what may be called strategy in the sense that at this point the concern is to define, using prospective studies, the set of long term objectives for which various services will be responsible. b) Programming consists of defining the administrative steps and for organizing the necessary logistics for carrying out the set of actions in order to reach the selected objectives. In this phase, the resources in terms of human resources, capital (investment) and research are determined for the duration period covered. The programmes are laid out through a work plan that is, however, of only indicative value. c) Budgeting is the phase when the annual parts of the programme are translated into annual budget, taking into account the financial constraints. The idea is to adopt on a voluntary and progressive basis, within the administration, a coherent way of preparing, implementing, and controlling decisions made at each level of responsibility. In brief, the PPBS method is to set certain major objectives, to define programmes essential to these goals, to identify resources to the specific types of objectives and to systematically analyse the alternatives available.
It was presumed -- or perhaps desired, wished or ordained -- that evaluations at each level would dictate reallocations of resources between activities, according to the marginal impact yield of the additional money spent. PPBS' rigorous hierarchical structure, its grounding in economics -- the key question was: Where is the marginal dollar most effective?” --, its faith in the inherent comparability of various policy purposes on the basis of expenditures, their common denominator; its promises of both control and fine tuning of all government actions, plus continuous feedback and monitoring; all combined into a vision of an ultimate fusion of budgeting and policy-making. The promised end result was to be a smoothly functioning machine, highly transparent and stable, yet capable of constant reallocations resulting from continuous and integrated evaluations of the impact of policies. (…) All real attempts to implement PPBS as a system were soon abandoned, without much tearshedding. The reasons for the demise of policy-making as top-down-budgeting embodied in PPBS (and later on in ZBB) are well known. The most obvious is the enormous information overload it inflicts on any system, since the evaluation and continuous reassessment of a very wide range of policies requires vast financial resources and, more importantly, consumes a great deal of decision-makers' time (OCDE, 1996: 32).