Big expectations for poor results? Actor's dynamics in performance- based budgeting

Performance- based budgeting (PBB) has been argued to be a solution to current problems of public sector organizations, but, on the contrary, it has generated new challenges because of its ambiguities. In light of these... [ view full abstract ]

Performance- based budgeting (PBB) has been argued to be a solution to current problems of public sector organizations, but, on the contrary, it has generated new challenges because of its ambiguities. In light of these criticalities, this research analyzes the under-investigated role played by different key categories of actors engaged in the realization of PBB (e.g., Ministry of Finance, National Audit Office, Sector Agency) in order to explore how they have contributed to make the practice a (un)feasible tool for public sector organizations because of the different internal dynamics across them. A multiple case study based on semi-structured interviews and document analysis in two Nordic countries, Finland and Sweden, which have long traditions with PBB, has been carried out. Although the lengthy experiences with PBB, the results show that the lack of sound dynamics in the organizations makes the budgetary use of performance information destined to be limited and partial even in well-developed contexts as Finland and Sweden.

Points for practitioners

The research investigates and interprets how different categories of actors exposed to PBB have contributed, or not, to overcome PBB challenges, thus explaining the reasons of the state-of-the-art. Therefore, this paper provides helpful insights to practitioners in order to understand better the problematic issues to cope with, based on the differences existing across key actors. In particular, the focus on the role of different actors sheds new light on the need of building PBB systems on a network of well-defined relationships and collaborations, inspiring future decisions and actions accordingly.