Purpose: This paper analyzes trust in superiors as an informal control mechanism to reduce budgetary slack. We examine how relationships between trust of subordinates in their superiors and economic incentive reduce the tendency of subordinates to create budgetary slack. Methodology: An experiment was designed with participants who play the role of manager or executive alternatively Findings: Results show that the introduction of an economic incentive does not aff ect the relationship between

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... ust and budgetary slack. Implications/limitations: This study will let organizations to further the budgeting process by using informal mechanism, such as trust, as a complement to traditional mechanism (e.g. monetary/ economic incentives). This enhances the eff ectiveness of the organization's actions and policies. Originality/Value: The fi ndings of this study complement the results of previous studies on how trust is related to fi nancial and non-fi nancial performance criteria.