Absorptive Capacity

What is absorptive capacity? In simple terms, absorptive capacity, as used in public financial management, refers to the ability of government agencies to utilize or use the resources (e.g., government funds) made available to them. [1][2][3] One example of resource available to government agencies is their annual budget under pertinent appropriations act. Absorptive capacity means the ability of the government agency to use its budget under the appropriations act and may be measured using different ways depending on what the government wants to measure. The most common measure of absorptive capacity is the budget utilization rate (BUR) which may be...