Policy Diffusion and Performance-based Budgeting

ABSTRACT

This article applied the policy diffusion model as a theoretical framework for interpreting the international spread of performance-based budgeting, based upon 33 OECD case studies of countries that have implemented this reform. The data show that the historical development of performance-based budgeting was fairly consistent with the diffusion model. In particular, the adoption of performance budgeting took off during 1985–1995 and then accelerated over the following 15 years, and the primary innovators were a group of four English-speaking countries with comparatively laissez-faire economies (the United States, Canada, Australia, and New Zealand). The case studies indicated that performance-based budgeting was generally part of a broader program of governmental reform, that executive agencies were more important than parliaments in managing it, that it became quite important in budget- and policy-making, and that implementing it faced a significant number of challenges.

KEYWORDS:

• Effectiveness
• efficiency
• governmental reforms
• performance-based budgeting
• performance measures
• policy diffusion
• United States