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

172 Anwar Shah and Chunli Shen
performance measurement and performance budgeting. Their motives may
come from external demands for service quality and accountability, as well
as from internal demands for efficiency and effectiveness (Wang 1999). It is
also essential to identify the producers and consumers of information and
to provide an appropriate incentive strategy for the use of performancebased
information. Furthermore, decision makers must understand that
ultimately performance-based information may be most helpful for management
improvement, rather than for budgetary matters. Political will is
critical to the implementation of results-based accountability. Even a less
sophisticated system can achieve a great deal in the presence of political will,
whereas a more sophisticated system will achieve very little if the political
will to use it is not present.
Importance of Legislative Support
Strong and consistent political support from the legislature is critical for
performance budgeting initiatives. To pursue internal rationality and efficiency
criteria without regard to the political environment jeopardizes the
prospects of the endeavor. Legislative understanding and involvement are
critical but were often neglected in previous initiatives (such as PPBS,
MBO, and ZBB), partly because those reforms were seen mainly as
administrations’ internal management initiatives (GAO 1997). Lack of
legislative support is an important reason for the failure of those reforms
(Melkers and Willoughby 1998).
Budgeting reform inevitably affects all branches of government. It
cannot operate on a path toward technical refinement or analytical
sophistication independently of the political environment (Kelly 2003).
The use of performance measurement in budgeting entails changes in
governments’ operations, personnel, structures, and even cultures—
changes that always lead to a power struggle and power transfer and, thus,
result in resistance from those who are adversely affected. The role of legislators
in budgeting often focuses on balancing budgets and controlling
public spending. Hence, they show interest in control-oriented budget
formats, such as line-item budgeting, in which they can manipulate and
monitor budget revenues and expenses item by item. Legislators may
resist performance measurement, fearing a shift of power to the executive
branch (Carroll 1995; Jones and McCaffery 1997). Individual service
agencies may also gain budgeting, personnel, and purchasing power
through delegation from the legislature and central management offices.
The political effect of performance budgeting reform demonstrates that