Budget starting position matters: A "field-in-lab" experiment testing simulation engagement and budgetary preferences

Budget scholars have long theorized the impact of citizen engagement in the budget process. However, there is a void in the literature on modern types of engagement such as online budget simulations. Basic questions like what governments can do to increase the level of engagement and what effects such changes have on outcomes remain unanswered. Using a behavioral public budget and finance framework, we designed and tested an experiment with a local government budget simulation and varied the starting condition between balance, surplus, and deficit to assess the impact of starting condition on relevant outcomes of engagement and budgetary preferences. Results show that two measures of engagement and most budget preferences were influenced by the starting condition. Field-in-lab experiments like this one have the potential to further develop behavioral budget theory and be used to test online government platforms that are used by governments for engagement and many other purposes. Even though there may be political reasons for starting a budget simulation in balance, starting budget simulations in a deficit or a surplus increases engagement as measured by the number of changes in the budget simulation.Starting a simulation in deficit decreases the number of people that complete the simulation.Starting a budget in surplus leads to higher ending balances.Both deficit and surplus starting conditions changed budgetary preferences relative to starting a budget in balance.These results lend insight into how even modest changes can influence multiple outcomes, and the model provides a framework for future research and practice on behavioral interventions in simulations and engagement.