*562OPINION

On January 2, 1977, while acting in the scope of his employment, John Richey was killed when his vehicle left the road near Long Lake at Mile 86.4 of the Glenn Highway. Industrial Indemnity Company of Alaska paid workers’ compensation benefits to Richey’s wife and brought this action against the State of Alaska under AS 23.-30.0151 and the Alaska Tort Claims Act, AS 09.50.250-.300.

The complaint alleged that the state’s negligence was the proximate cause of Ri-chey’s death. Various specific acts and omissions were referred to as constituting actionable negligence in the complaint, including the failure to install a protective guardrail at the accident site.2

The state moved for partial summary judgment, claiming that its admitted failure to install a protective guardrail at the location in question was the product of discretionary decisions by state agents. In support of its motion the state submitted the sworn affidavits of DeVerl Peterson, a traffic and safety engineer with the Department of Transportation. According to Peterson, the original project proposal included a number of guardrails that were excluded in the final plan because of funding constraints.

Industrial Indemnity opposed the motion. It submitted evidence indicating that the original proposal called for installation of a guardrail in the area of the accident and that various highway officials had agreed that the suggested installations were appropriate. Industrial Indemnity also submitted a letter from a federal highway official stating that the Glenn Highway guardrail project had been handled in an abnormal fashion. Following oral argument, the superior court granted the state’s motion. Industrial Indemnity appeals.3

The State of Alaska created a cause of action for contract and tort claims against the state in the Alaska Tort Claims Act of 1962. AS 09.50.250-300. In the area of tort suits, however, the state did not grant a cause of action for claims arising out of “the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a state agency or an employee of the state, whether or not the discretion involved is abused .... ” AS 09.50.250(1).4 We have termed this statuto*563ry immunity the “discretionary function exception” of the tort claims act.

The state contends that it is entitled to immunity for its failure to place a guardrail at the site of John Richey’s accident under the discretionary function exception of AS 09.50.250(1). We agree.

We have held that the discretionary function exception applies to government decisions entailing planning or policy formation. Wainscott v. State, 642 P.2d 1355, 1356 (Alaska 1982); Japan Air Lines Co. v. State, 628 P.2d 934, 936 (Alaska 1981); State v. I’Anson, 529 P.2d 188, 193-94 (Alaska 1974). In suits brought under the tort claims act, we have employed a “planning level-operational level” test to distinguish between decisions involving the formulation of basic policy, entitled to immunity, and decisions regarding only the execution or implementation of that policy, not entitled to immunity. Rapp v. State, 648 P.2d 110 (Alaska 1982); Wainscott, 642 P.2d at 1356-57; Japan Air Lines, 628 P.2d at 936; Jennings v. State, 566 P.2d 1304, 1311 (Alaska 1977); I'Anson, 529 P.2d at 193; State v. Abbott, 498 P.2d 712, 721 (Alaska 1972).

The planning level-operational level test must be applied in consideration of the policies underlying the discretionary function exception of Alaska’s Tort Claims Act. I'Anson, 529 P.2d at 193 (Alaska 1974); Abbott, 498 P.2d at 721. See Wainscott, 642 P.2d at 1356. The principal policy underlying the tort immunity is to limit judicial re-examination of decisions properly entrusted to other branches of government. Wainscott, 642 P.2d at 1356; Japan Air Lines, 628 P.2d at 936; I'Anson, 529 P.2d at 193. See also Johnson v. State, 69 Cal.2d 782, 73 Cal.Rptr. 240, 447 P.2d 352, 360 (1968) (en banc). The courts will refrain from second-guessing the legislative and executive branches on issues of basic policy. Under our system of separation of powers, such decisions are vested in the politically responsive coordinate branches. Thus, in applying the test for discretionary function immunity under AS 09.50.250, we will “isolate those decisions sufficiently sensitive so as to justify judicial abstention.” Wainscott, 642 P.2d at 1356.

In addition, courts must not intrude into realms of policy exceeding their institutional competence. The judicial branch lacks the fact-finding ability of the legislature, and the special expertise of the executive departments. We have consistently held that the courts of Alaska should not attempt to balance the detailed and competing elements of legislative or executive decisions. Wainscott, 642 P.2d at 1356; I'Anson, 529 P.2d at 193 n. 20; Abbott, 498 P.2d at 721. See Reynolds, The Discretionary Function Exception of the Federal Tort Claims Act, 57 Geo.L.J. 81, 121-23, 128-31 (1968); Jaffe, Suits Against Governments and Officers: Damage Actions, 77 Harv.L.Rev. 209, 235-36 (1963).

Turning to the case at hand, the superior court rested its ruling on the ground that the state had never decided to install a guardrail at Long Lake Hill. The court reasoned that the question of whether or not to install a guardrail at the accident site was one of policy,5 and that an affirmative decision to go ahead with the installation had to be made at the discretionary level in order to advance the chain of events to the operational stage.6 We agree with both parts of the superior court’s analysis.

*564In our recent decisions in Rapp v. State, 648 P.2d 110 (Alaska 1982), and Wainscott v. State, 642 P.2d 1355 (Alaska 1982), this court held that the state’s failure to install sequential traffic signals at two intersections were planning-level decisions immune from negligence liability. In Wainscott, we observed that:

There are undoubtedly numerous intersections throughout the state where known traffic hazards could be significantly reduced by the installation of more sophisticated traffic control devices. Available funding, however, requires that the Department of Transportation select among these locations in deciding where to make improvements ....

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If we were to assess the propriety of this decision, we would be engaging in just the type of judicial review that the discretionary function exception seeks to prevent. The selection of a traffic control device for the New Seward — O’Mal-ley intersection was not a purely ministerial decision implementing a preexisting policy, but rather a decision that called for policy judgment and the exercise of discretion.

642 P.2d at 1357. Accord, Rapp, 648 P.2d at 110; Jennings, 566 P.2d at 1311-12. We think that the state’s failure to install a guardrail at mile post 86.4 of the Glenn Highway is analogous to its failure to place traffic signals at the intersections in Rapp and Wainscott. Both types of decisions involve planning, an assessment of competing priorities, and a weighing of budgetary considerations.7 There is no dispute that the proposed Glenn Highway guardrail installations were cut back because of a lack of funding from the Department of Transportation.8 Decisions regarding the allocation *565of scarce resources are usually discretionary, and thus immune from judicial inquiry. Wainscott, 642 P.2d at 1357 n. 6. See Bearce v. United States, 614 F.2d 556, 561 (7th Cir. 1980), cert. denied, 449 U.S. 837, 101 S.Ct. 112, 66 L.Ed.2d 44 (1980).9 The state produced a calculation that to install a guardrail at Long Lake Hill would now cost at least $425,000.00. DeVerl Peterson, Department of Transportation Traffic and Safety Engineer for the Central Region, stated in his first affidavit that “this particular mile and one-half stretch of the Glenn Highway is not unique and that the installation of guardrails on similar sections of highway on the Glenn Highway alone would require the expenditure of several tens of millions of dollars.” There is a factual dispute concerning the state’s figures, and Industrial Indemnity maintains that the cost of guardrails in 1969 (when the Glenn Highway project was first under consideration) was only one-fifth of the present-day estimates made by the state. Even resolving this question in a manner most favorable to Industrial Indemnity, it remains clear that guardrails are expensive, and that a decision by the state to place guardrails along the Glenn Highway would necessarily affect the state’s ability to provide other governmental services. We would be engaging in precisely the type of policy evaluation that the discretionary function exception is designed to foreclose if we were to inquire into the wisdom of the state’s guardrail policy in this case.

Although the foregoing discussion is adequate to dispose of the case at bar, appellant raises an additional argument that warrants comment. Industrial Indemnity does not claim that an affirmative decision was ever made to place a guardrail at Long Lake Hill. It maintains, however, that the state undertook to carry out a “guardrail project” on the Glenn Highway, that the state commissioned engineers to determine where guardrail installations would be appropriate, that these engineers formulated a project proposal based upon empirical warrant standards, and that the state did build many of the guardrails as recommended in the original project proposal. Industrial Indemnity claims that somewhere in this sequence of events the state assumed a duty to erect certain guardrails determined to be appropriate in the engineering survey.10 Once this duty was created, the ultimate decision of where to place individual guardrails was made by project engineers, who had to choose among the proposed installations due to incomplete funding. Industrial Indemnity argues that the engineers’ final selections were operational decisions made to implement the general policy of the guardrail project, and that the state may thus be held liable for their *566determinations with respect to particular installations. A necessary extension of this argument is that the state is vulnerable to suit with respect to every site on the highway where the original project proposal called for a guardrail, but where no guardrail was ever installed. We think that Industrial Indemnity’s theory cannot co-exist with the rule of law that budgetary decisions are immune from suit under the discretionary function exception of the tort claims statute. The Department does not make decisions on a guardrail-by-guardrail basis, but the necessary consequence of its determination to allocate less money to the project was that fewer guardrails would be built. We do not think that a decision by the Department to fund only a portion of a proposed project renders the state vulnerable to lawsuits with respect to every proposal not carried out. This would be the result of allowing private individuals to claim that specific omissions were the product of improper decision-making. We therefore hold that, once it is determined that the decision at issue is of the type entrusted to the planning level of government, a claimant must show that an affirmative assumption of duty has been made by the state in order to have a claim for relief for alleged operational negligence in performing that duty.11

We conclude that the decision whether or not to build a guardrail at the site of John Richey’s accident on the Glenn Highway was within the ambit of the discretionary function exception of AS 09.50.250(1). Thus, the decision below granting summary judgment to the State of Alaska is AFFIRMED.

joined by BURKE, Chief Justice, dissenting.

In deciding whether the discretionary function exception of AS 09.50.250 applies, it seems to me that we should assume that negligence on the part of the state exists. By doing this we can guard against the easy tendency to confuse the absence of negligence with immunity as a reason for decision. Such confusion can have the effect of creating erroneous precedents.

Confusion of this nature appears to be present in Jennings v. State, 566 P.2d 1304 (Alaska 1977), where we held that the state’s failure to provide a crosswalk several hundred feet from an intersection near which a grade school was located came within the discretionary function exception. We noted that at the intersection nearest the school a crosswalk had been built, an *567electronically controlled traffic signal had been placed, and school crossing guards were usually present. Id. at 1307. We stated:

Of controlling significance, in our view, is the fact that the child was struck ... at a point some three blocks away from the [intersection nearest the school at which crossing safety measures had been taken].

Id. at 1312. The fact that the state had provided safe passage across the busy road at the point nearest the school is significant to the issue of whether the state fulfilled its duty to use reasonable care to provide safe pedestrian crossings. However, it is difficult to see how this fact bears at all on whether the state’s decision not to build a crosswalk where the accident happened was of a planning rather than an operational nature.

The majority’s opinion in the present case also seems to confuse the absence of negligence with immunity. Thus the opinion quotes a highway engineer’s affidavit that the particular stretch of highway involved here “is not unique.” (Maj. op. 565). Further, the opinion notes:

It is not entirely clear which guardrails Industrial Indemnity believes the state became obligated to build. Industrial Indemnity does not claim that the project engineers were bound to accomplish the impossible task of erecting all of the guardrails in the original project proposal in spite of the cutback in funding. To prevail in its claim, Industrial Indemnity would presumably have to be successful in showing that the guardrail at Long Lake Hill should have been built instead of a guardrail that actually was built at another site. The state engineers’ decision to substitute another guardrail for the one at Long Lake Hill would have to have been so unjustifiable as to constitute negligence. One of the basic flaws of Industrial Indemnity’s argument is that it can suggest no criteria which the courts could use to determine whether the guardrails actually built were the right ones or the wrong ones. Even with respect to Long Lake Hill, appellant makes no specific allegations which would support its claim of ministerial negligence.

(Maj. op. 565 n. 10) These statements strongly suggest the absence of negligence under the facts as presented.

Assume, however, that there was evidence that Long Lake Hill was unique in that it was especially unsafe because of some combination of narrow shoulders, steep dropoffs, curves and traffic usage patterns. Assume also that there had been numerous fatalities on the hill of which the state had notice and that the other locations on the Glenn Highway where guardrails in fact were placed as a part of the guardrail project were places where special hazards did not exist and no history of fatal accidents was present. Under such circumstances there would be, to use the terms of the majority opinion, criteria which could be used to determine that the guardrails in the guardrail project were built in the wrong place. Thus, even though the arguably discretionary nature of the decision not to place guardrails on Long Lake Hill is the same under the facts actually presented as it is in my hypothetical, one may question whether the majority would conclude that discretionary immunity would apply if a clear case of negligence had been presented.

In my opinion, the only immune discretionary decision involved in this case was the decision to own and maintain a highway system. Once that decision was made the state no longer had discretion to fail to use due care to assure that its highways were reasonably safe. In State v. I’Anson, 529 P.2d 188 (Alaska 1974) we held that the state is under a duty to use reasonable care to keep its highways in safe condition for the reasonably prudent traveler. Id. at 195. In order to fulfill this duty the state may be required to place appropriate signs or paint no passing barrier stripes on a highway and we held that the failure to do either was not protected under the discretionary function exception. Id. at 193-94. Similarly, in Johnson v. State, 636 P.2d 47 (Alaska 1981) we held that the failure to post a “non-standard” sign to warn that a railroad crossing posed particular hazards to bicyclists was *568not shielded by the discretionary function exception. Id. at 66.1 In Japan Airlines Co., Ltd. v. State, 628 P.2d 934 (Alaska 1981) we held that the alleged failure of the state to build an airport taxiway having a width meeting certain safety standards was not immune. We stated:

In the present case, the state undertook the task of providing the traveling public with a taxiway designed for use by wide-body jets. In so doing it also assumed the responsibility of designing, constructing, and maintaining the taxiway safely. Once the state made the decision to build the taxiway, the discretionary function exception did not protect it from possible negligence liability in the operational carrying out of the basic policy-planning decision to build the taxiway.

Id. at 937 n. 2.

In my opinion this case cannot be distinguished in any principled way from I’Anson, Johnson, or Japan Air Lines. Just as it costs money to erect signs, paint no passing stripes, and build wider taxiways, it also costs money to construct guardrails. However, once the state undertakes to own and maintain a highway system, its obligation is to use reasonable care to keep its highways in safe condition. In certain areas appropriate signs, highway stripes, or guardrails may be required in order to fulfil this duty. If so, the failure to take such precautions is not immunized by the discretionary function exception.

A closely analogous case is State v. Webster, 88 Nev. 690, 504 P.2d 1316 (1972). There, the Supreme Court of Nevada held that the failure of the state to construct a cattle guard which would have served to prevent livestock from straying onto a controlled access highway was not protected by the discretionary function exception. The court stated:

In Pardini v. City of Reno, 50 Nev. 392, 401, 263 P. 768, 771 (Nev. 1928) this court said: “[WJhere a railing or barrier is reasonably necessary for the security of travelers on the street, which from its nature would otherwise be unsafe, and the erection of which would have prevented the injury, it is actionable negligence not to construct and maintain such railing or barrier.” The possibility of liability by the city in that case was not predicated on its failure to construct a guardrail in accordance with a plan, but on its failure to construct one at all. The failure of the city to construct a guardrail ... as the failure of the State in this case to install a cattle guard at the entrance to the controlled access freeway, came at the operational level, after the discretionary decision had been made. Where a cattle guard is reasonably necessary for the security of the traveling public on a controlled access freeway, the failure to install it renders the State amenable to suit.

Id. 504 P.2d at 1319.

Also instructive are two California cases. In Ducey v. Argo Sales Co., 25 Cal.3d 707, 159 Cal.Rptr. 835, 602 P.2d 755 (1979) the Supreme Court of California held that the State of California was liable for failing to place a median barrier on a busy freeway. Id. 602 P.2d at 759-63. This conclusion was reached largely on the authority of Baldwin v. State, 6 Cal.3d 424, 99 Cal.Rptr. 145, 491 P.2d 1121 (1972), which held that the design immunity provision of California Government Code § 830.6 did not shield the state’s failure to provide a needed left turn lane at a busy intersection. The Baldwin opinion makes it clear that design immunity under California law is based on the same considerations as immunity for discretionary governmental functions. Id. 491 P.2d at 1124, 1125 n. 6, 1128, 1129 n. 9. In Baldwin the court noted that the duty to correct dangerous highway conditions could encompass *569such devices as “warning signs, lights, barricades or guardrails.... ” Id. 491 P.2d at 1130.

Wainscott v. State, 642 P.2d 1355 (Alaska 1982) is distinguishable from the present case because a discretionary decision was made there that the highway in question was to be utilized for through traffic.2 It would obviously be inconsistent with such a decision to require the construction of a stop signal. Rapp v. State, 648 P.2d 110 (Alaska 1982) (per curiam) can be distinguished on the same basis.

For the above reasons I would reverse the decision of the superior court and remand this case for trial.