Performance Budget Management is key to efficient spending and engaging the public.

Contemporary reforms to integrate performance information into budgetary decision making and resource allocation date back to the beginning of the twentieth century, when the National Municipal League, the U.S. Census Bureau, and the New York Bureau of Municipal Research in the Unied States advocated the use of municipal statistics and cost-accounting information to improve the efficiency and effectiveness of government spending and program operations (Fox 1977; Williams 2003, 2004). These municipal efforts later influenced U.S. federal budgetary reform in the 1930s, which called for more emphasis on economy and efficiency and for a more rational, systematic approach to administrative and budgetary practices (Kahn 1997; President’s Committee on Administrative Management 1937).1 The early reforms, however, did not provide a clear articulation of the linkage between program statistics, performance analysis, and budgetary allocation. It was not until the first Hoover Commission of the U.S. federal government during the late 1940s that the concept of performance budgeting was more formally defined (Lederle 1949).2 Since then, numerous reform initiatives have been implemented by federal, state, and local agencies in the United States (Burns and Lee 2004; Cope 1987; GAO 1997; Hayes et al. 1982; Lee 1991). Similar efforts were launched by other developed economies from the 1960s to the 1980s, with the United Kingdom, Australia, and New Zealand as the leaders in piloting many key reform ideas (Rose 2003; Spiers 1975; UN 1965). For the past two decades, many international organizations have also advocated performance-budgeting reform in developing economies, even though the administrative capacities and institutional settings of these countries differ significantly from those of developed Western economies (Asian Development Bank 2006; Robinson 2007). By the turn of the twenty-first century, the idea of performance budgeting had been widely disseminated and practiced around the world, although the reform effort has faced varying degrees of success and many well-known challenges (Andrews 2005; Curristine 2005; Gupta 2010; OECD 2007, 2014; Raudla 2012; Robinson and Brumby 2005). This article examines the decades-long practices of performance budgeting and their associated challenges from a multilayered institutional framework and acknowledges that performance budgeting has not made a significant impact on the political appropriation process in many countries. Thus, this article suggests an array of strategies to address these institutional and organizational challenges. It also notes the need to reconceptualize the practice of performance budgeting as an executive-driven system Research Article From Performance Budgeting to Performance Budget Management: Theory and Practice 749 of performance budget management (PBM) so that theory is more aligned with practice. The key components of PBM are discussed, suggesting that multiyear budget planning, assessment of long-term financial risk, policy planning, stakeholder involvement, and regular spending reviews and performance audits should be integrated with the departmental and program budget cycles. This type of PBM is needed to address the long-term fiscal realities that many countries and subnational governments face and to respond to the public’s expectation that the government should do more with less