From Performance Budgeting to Performance Budget Management: Theory and Practice

• DOI: http://doi.org/10.1111/puar.12915
• Author: Alfred Tat‐Kei Ho
• Published date: 01 September 2018
• Date: 01 September 2018

748 Public Administration Review • Septem ber | Octo ber 20 18

Public Administration Review,

Vol. 78, Iss. 5, pp. 748–758. © 2018 by

The American Society for Public Administration.

DOI: 10.1111/puar.12915.

Abstract: This article examines the decades-long practices of performance budgeting in different countries and

their associated challenges from a multilayered institutional framework. Based on theory and lessons learned, the

article recommends an array of strategies to address institutional and organizational barriers. It also proposes to

reconceptualize performance budgeting as a performance budget management system and suggests how multiyear

budget planning, financial risk assessment, policy planning, the departmental budget cycle, the program budget cycle,

stakeholder engagement, regular spending reviews, and performance audits should be integrated more closely to address

the long-term fiscal challenges faced by many governments and to respond to the public pressure on agencies to do more

with less.

Evidence for Practice

• Performance budgeting is an institutional change.

• Performance budgeting impacts executive budget processes and subdepartmental resource allocation.

• Linking performance with allocation mechanically and punitively is rare.

• Performance budgeting may not displace line-item budgeting.

Alfred Tat-Kei Ho is professor of public

administration in the School of Public Affairs

and Administration at the University of

Kansas. His research focuses on budgeting

and financial management, performance

management and governance, and

e-government. Many of his research projects

are the results of engaged scholarship with

various organizations, including the Asian

Development Bank and local governments

in the United States and China.

E-mail: alfredho@ku.edu

From Performance Budgeting to Performance Budget

Management: Theory and Practice

Alfred Tat-Kei Ho

University of Kansas

Contemporary reforms to integrate performance

information into budgetary decision making

and resource allocation date back to the

beginning of the twentieth century, when the National

Municipal League, the U.S. Census Bureau, and

the New York Bureau of Municipal Research in the

United States advocated the use of municipal statistics

and cost-accounting information to improve the

efficiency and effectiveness of government spending

and program operations (Fox 1977; Williams 2003,

2004). These municipal efforts later influenced U.S.

federal budgetary reform in the 1930s, which called

for more emphasis on economy and efficiency and for

a more rational, systematic approach to administrative

and budgetary practices (Kahn 1997; President’s

Committee on Administrative Management 1937).1

The early reforms, however, did not provide a clear

articulation of the linkage between program statistics,

performance analysis, and budgetary allocation. It was

not until the first Hoover Commission of the U.S.

federal government during the late 1940s that the

concept of performance budgeting was more formally

defined (Lederle 1949).2 Since then, numerous

reform initiatives have been implemented by federal,

state, and local agencies in the United States (Burns

and Lee 2004; Cope 1987; GAO 1997; Hayes et al.

1982; Lee 1991). Similar efforts were launched by

other developed economies from the 1960s to the

1980s, with the United Kingdom, Australia, and New

Zealand as the leaders in piloting many key reform

ideas (Rose 2003; Spiers 1975; UN 1965). For the

past two decades, many international organizations

have also advocated performance-budgeting reform in

developing economies, even though the administrative

capacities and institutional settings of these countries

differ significantly from those of developed Western

economies (Asian Development Bank 2006; Robinson

2007). By the turn of the twenty-first century, the

idea of performance budgeting had been widely

disseminated and practiced around the world,

although the reform effort has faced varying degrees

of success and many well-known challenges (Andrews

2005; Curristine 2005; Gupta 2010; OECD 2007,

2014; Raudla 2012; Robinson and Brumby 2005).

This article examines the decades-long practices of

performance budgeting and their associated challenges

from a multilayered institutional framework and

acknowledges that performance budgeting has

not made a significant impact on the political

appropriation process in many countries. Thus, this

article suggests an array of strategies to address these

institutional and organizational challenges. It also

notes the need to reconceptualize the practice of

performance budgeting as an executive-driven system

Research Article