Austerity and the use of performance information in the budget process

IMPACT

Using evidence from Austria, Ireland and Portugal, the authors show that, although the experience of a fiscal crisis can act as a useful trigger for adopting performance budgeting reforms, the context of fiscal stress and austerity does not offer a fertile ground for implementing reforms. In addition, it can undermine the use of performance information in budgetary decision-making. This article will help policy-makers and practitioners to develop realistic expectations about the impacts of performance budgeting in a climate of austerity and fiscal stress.

ABSTRACT

This article examines how fiscal stress and austerity influence the use of performance information in budgetary decision-making. Using data from élite interviews conducted in Austria, Ireland and Portugal, the authors show that, overall, the era of austerity in those countries over the past decade has not been conducive to using performance information for making budget decisions. The guardians of the public purse have striven to exert control over expenditure levels and hence the budgetary discussions have tended to focus on inputs.

KEYWORDS:

• Austerity‌
• cutback management
• fiscal crisis
• performance budgeting
• performance information

Acknowledgements

Research for this article was supported by the Estonian Research Council: grant PRG1125.

Disclosure statement

No potential conflict of interest was reported by the author.