Legislative performance budgeting fails – politics, gaming, incremental logics, and fearful legislators.

Reconceptualizing Performance Budgeting as Performance Budget Management

It should be noted that many of the foregoing recommended practices focus on activities controlled and managed by the executive branch. Although the legislative use of performance information in the budgetary process and the proactive engagement of the legislature in the development of performance goals and performance-budgeting strategies are important (OECD 2014; Park and Jang 2015; Podger 2018; Shaw 2016; White 2012), there is a long-held view that performance budgeting is primarily an executive budgeting tool for managerial and planning purposes (Jones and McCaffery 2010; Joyce 2003; Kelly and Rivenbark 2011; Lu 2007; Moynihan 2008). In the 1940s in the United States, performance-budgeting reform was not intended to change congressional budgeting, and throughout its history, the reform has seldom succeeded in doing so. Hence, the conceptualization of performance budgeting as an executive budgeting tool will probably remain more salient than a conceptual focus on its legislative use. The idea that performance budgeting may provide an alternative model of legislative decision making that trumps politics, gaming, and incremental logics is likely to continue to draw skepticism (Radin 2008; Raudla 2012; Wildavsky 1961). From this perspective, it is perhaps helpful for practitioners and the academic community to reconceptualize the practice of performance budgeting as “performance budget management” and focus more on the financial management aspects of the practice rather than on the legislative process and outcomes. PBM is about using the full budget cycle, from preparation, appropriation, and execution to evaluation, as a platform to achieve various managerial, budgetary, and policy-making purposes (see figure 2). Based on the From Performance Budgeting to Performance Budget Management: Theory and Practice 753 recommended practices, PBM activities should integrate multiyear budgetary planning and the assessment of long-term liabilities with policy planning so that policy makers and the budget office can be more informed about the short-term, near-term, and long-term financial risks faced by key policies and outcomes that the political leadership and the public hope to achieve. PBM also should link macro budgetary and policy planning with micro budget planning at the departmental and program levels so that departmental and program priorities and their budget requests are based on consideration of the macro budgetary constraints and the policy priorities of the executive and legislative leadership. In addition to integrating budgetary planning with policy planning, PBM needs to focus on “value for money” considerations, such as the efficiency, effectiveness, and public satisfaction of spending. This focus is more likely to occur at the subdepartmental program level, however, where decisions are less politicized, the outcomes and beneficiaries of spending can be more clearly defined, and the performance logics and the focal points of accountability of spending can be specified more easily (Blöndal et al. 2008; Castro 2009; Ho 2011; Park and Jang 2015). Further, even though there has been a growing emphasis on outcome-orientated budgeting, some legislators and citizens are still interested in monitoring how much tax money is spent on what activities. As a result, they may feel hesitant to delegate the detailed control function to another bureaucratic organization, such as the executive budget office or the auditor’s office. Based on this concern, performance-oriented program budget documentation is likely to coexist with traditional, input-oriented, line-item budgets in some governments (Schick 2014). Finally, under a system of PBM, departmental and program managers need to monitor spending progress and results regularly during the budget execution process. There also should be spending reviews conducted by departments and programs, probably on a rotating basis over a specified period of time so that the budget office and departmental leadership can evaluate the legality, allocative efficiency, cost-effectiveness, and necessity of spending. Occasional in-depth performance audits of selected spending programs by an independent, external entity, such as the auditor’s office, are also needed so that deficiencies, vulnerabilities, risk, and long-term sustainability concerns of spending programs can be identified and proactive remedial actions can be recommended to policy makers and budgeters. Figure 3 provides an example from the City of Olathe, Kansas, which has institutionalized a “threedimensional review” to “look back” at the effectiveness of spending, “look around” to benchmark performance results and learn from peer experiences, and to “look forward” to the future and integrate budget planning with the long-term vision and strategic planning of the community.