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

A Primer on Performance Budgeting 153
public servant does as long as he or she observes the rules. The performance
budgeting system seeks results-based accountability—holding managers
accountable for what they achieve, not how they do it.
How to Do Performance Budgeting: International
Experiences
The past two decades have witnessed a wave of enthusiasm for performance
management and budgeting reforms in industrial nations and in Malaysia,
spreading eventually to other developing countries. The experimentation
with and experience of performance budgeting are wide ranging. Because
performance budgeting develops at various stages in terms of how performance
information is used in the budgeting process, this chapter distinguishes
performance budgeting in four categories:
1. Performance-reported budgeting (PRB) presents performance information
as part of the budget documentation, but budgetary actors do not use it
for resource allocation.
2. Performance-informed budgeting (PIB) refers to a budgeting process that
takes program performance into account but uses the information only
as a minor factor in making decisions.
3. Performance-based budgeting (PBB) implies that performance information
plays an important role for resource allocation, along with many other
factors,but does not necessarily determine the amount of resources allocated.
4. Performance-determined budgeting (PDB) means that allocation of
resources is directly and explicitly linked to units of performance.
Table 5.5 provides a snapshot of performance budgeting reform progress
in selected countries according to these categories. Overall, these reforms are
still in experimental stages; there are no truly mature examples of an integrated
performance budgeting system. In light of the political nature of the
budgeting process and the insufficiency of information, this chapter argues
that PBB, which takes performance as one of the key factors in resource allocation,
stands out as the best format for bringing about the spirit of rationalism
in decision making. Armed with performance data—as well as value judgments,
negotiations, and compromises—policy makers are also able to make
more informed budgetary decisions. Even when performance information is
imperfect, making available at least some information on performance may
add some greater degree of confidence to budgetary decision making and gain
greater buy-in on government policies by the electorate.