Public Sector Governance and Accountability Series: Budgeting and ...

Budget Methods and Practices 119
were exported from the United States to developing countries through the
United Nations (UN).
Program Budgeting Systems
Since the middle of the 20th century, the pressure to spend more effectively
and develop better budgeting techniques produced an almost universal
acceptance that budgeting is not only about planning for inputs, but also,
perhaps primarily, about planning for the results that governments want to
achieve. In developments that can be traced back to the introduction of program
budgeting in the United States in the 1940s, more results-oriented
budgeting techniques were developed in iterative processes that benefited
from the country’s own and other countries’ mistakes. Although a lot of the
early development occurred in industrial countries—the transfer of programming
budgeting to the United Kingdom in the 1970s, New Zealand’s
output focus in the 1980s, Sweden’s system of management by objectives—
the use of results-oriented budgeting by the United Nations as a precondition
for aid assistance triggered its quick spread to the developing world. There
are several variants of introducing a focus on the results of spending into
budgeting practices, and they are often grouped together as a movement
under the term program budgeting. Exactly how program budgeting terms
are used varies enormously in practice. Box 4.1 provides a reference to key
terms and where they first came into use.
In 1965, the United Nations published A Manual for Programme and Performance
Budgeting. This book advocated performance budgeting comprising
program structures, a system of accounts and financial management, and a
measurement of efficiency. Dean (1989, as quoted in Rose 2003: 7) defines
program budgeting as follows:
Programming, or the subdivision of the government budget for information
purposes into programs and activities representing identifiable
units with similar aims or operations
Identifying the operational aims of each program and activity for the
budget year
Budgeting and accounting so that the separate costs and revenues of each
program are shown
Measuring the outputs and performance of activities so that these can be
related to the activities’ costs and to operational aims
Using the relevant data to establish standards and norms so that costs and
performance can be evaluated and government resources can be used
more efficiently.