Beyond Budgeting in Swedish Municipalities: Institutional Barriers and Democratic Constraints

Abstract

This study examines what institutional and organisational barriers shape the relationship between Beyond Budgeting principles and budgeting practice in Swedish municipalities. Drawing on ten semi-structured interviews with chief financial officers across municipalities of varying size, the study analyses the empirical material through a three-level theoretical framework combining institutional isomorphism, the process framework of Burns and Scapens, and the distinction between instrumental and constitutive effects of budgeting. The study finds that traditional annual budgeting is deeply embedded in Swedish municipal governance through three reinforcing mechanisms. Coercive isomorphism operates through the Municipal Act's legal requirement for balanced budgets; mimetic isomorphism operates through the absence of credible local exemplars of alternative models; and normative isomorphism operates through professional education and the influence of Sveriges Kommuner och Regioner (SKR). The study further shows that Beyond Budgeting applicability is asymmetric: practices operating at the instrumental level, including rolling forecasts, scenario planning and relative benchmarking, are already being adopted organically, while practices operating at the constitutive level face structural barriers rooted in democratic accountability requirements that management reform alone cannot resolve. The study contributes a more precise analytical vocabulary for assessing Beyond Budgeting applicability in constrained institutional contexts, demonstrates the explanatory value of combining macro-level institutional theory with the Burns and Scapens process framework, and establishes a productive connection between the Beyond Budgeting literature and the Swedish public sector management control literature.