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.
Details
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Author
Moynihan, Donald P.
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Document Date
2003/02/01
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Document Type
Brief
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Report Number
26752
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2010/07/01
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Disclosure Status
Disclosed
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Doc Name
Performance-based budgeting : beyond rhetoric
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Keywords
performance information;performance measure and;benefit of performance;accountability for results;information on performance;budget proposal;government service;performance data;pregnant woman;public debate;young child;entitlement program;budgetary discretion;state funding;Economic Management;elected officials;care access;health results;strategic information;government share;resource base;basic requirement;government function;performance contract;Public Spending;information asymmetry;political debate;public accountability;performance auditing;support system;fiscal advisor;system age;budget request;executive branch;political choice;link budget;program evaluation;budget measure;government spending;performance outcome;account performance;prepare budget;
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Citation
Moynihan, Donald P.
Performance-based budgeting : beyond rhetoric (English). PREM Notes ; no. 78. Public Sector Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/720081468138601046/Performance-based-budgeting-beyond-rhetoric