Publication: Performance-Based Budgeting : Beyond Rhetoric
Date
2003-02
ISSN
Published
2003-02
Author(s)
Moynihan, Donald P.
Abstract
Performance-based budgeting has long
been a recommended reform in both industrial and developing
countries. Yet considerable ambiguity remains on how to
define and implement this approach. A relatively strict
definition is that performance-based budgeting allocates
resources based on the achievement of specific, measurable
outcomes (Fielding Smith 1999). This definition promises a
rational, mechanistic link between performance measures and
resource allocations, with the ability to state the level of
outputs that can be achieved with an additional amount of
resources. But outputs cannot always be quantified
precisely-and while performance information offers benefits
to governments, it cannot eliminate the inherently political
nature of budgeting. Over the past decade U.S. state
governments have experimented extensively with performance-
based budgeting. Yet while 47 of 50 states claim to use some
form of it, driven by legislative or administrative
requirements, there is no evidence that any state relies on
a strict performance-based system. Even though U.S. state
governments have fairly high human and financial capacity,
they have encountered limitations in implementing
performance-based budgeting-raising questions about the
potential benefits of this approach.
Citation
“Moynihan, Donald P.. 2003. Performance-Based Budgeting : Beyond Rhetoric. PREM Notes; No. 78. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/e187419b-631b-5e68-89b2-b7da48286b74 License: CC BY 3.0 IGO.”