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

5
A Primer on Performance
Budgeting
anwar shah and chunli shen
T
he past two decades have witnessed a growing interest in
performance management and budgeting reforms, in response to
louder public demands for government accountability in industrial
countries. These reforms are intended to transform public budgeting
systems from control of inputs to a focus on outputs or outcomes,
in the interest of improving operational efficiency and promoting
results-oriented accountability. These experiences have significant
relevance for public sector reforms in developing countries. This
chapter is intended to guide policy makers and budget practitioners
who are contemplating reforms of their budgeting systems to bring
them into conformity with the needs of the 21st century.
The chapter first reviews the main motivations for reform of
budgeting systems and highlights the limitations of the traditional
budgeting system in coping with demands for accountable governance.
The second section introduces performance budgeting
systems. Third is a discussion of considerations for performance
budgeting reforms. The fourth section highlights the potential of
performance budgeting systems as tools for improving government
performance and accountability. The fifth section covers performance
budgeting practices in selected industrial and developing
countries. The sixth section lays out some lessons for countries
that are contemplating the performance approach in budgeting.
The last section highlights the main conclusions.
137