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The impact of performance-based budgeting on state fiscal performance

Author

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  • W. Crain
  • J. O’Roark

Abstract

Almost all American States have tried some form of performance-based budgeting, and this study examines the impact of this budget process innovation on state expenditures. Using panel data for 1970 through 1997 the findings indicate that performance-based budgeting curtails state spending per capita by at least two percentage points. However, not all state government programs are affected equally; some budget categories experience spending increases after the implementation of performance budgeting. The paper also examines the adoption pattern among states of performance budgeting rules. Copyright Springer-Verlag Berlin/Heidelberg 2004

Suggested Citation

  • W. Crain & J. O’Roark, 2004. "The impact of performance-based budgeting on state fiscal performance," Economics of Governance, Springer, vol. 5(2), pages 167-186, July.
    • Handle: RePEc:spr:ecogov:v:5:y:2004:i:2:p:167-186
    DOI: 10.1007/s10101-003-0062-6
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    Citations

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    Cited by:

    1. Boris Cournède & Antoine Goujard & Álvaro Pina, 2013. "How to Achieve Growth- and Equity-friendly Fiscal Consolidation?: A Proposed Methodology for Instrument Choice with an Illustrative Application to OECD Countries," OECD Economics Department Working Papers 1088, OECD Publishing.
    2. Ivo Bischoff & Frédéric Blaeschke, 2013. "Incentives and Influence Activities in the Public Sector: the Trade-off in Performance Budgeting and Conditional Grants," MAGKS Papers on Economics 201320, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. Ivo Bischoff & Frédéric Blaeschke, 2012. "Window-Dressing and Lobbying in Performance-Budgeting: a Model for the Public Sector," MAGKS Papers on Economics 201212, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    4. Bischoff, Ivo, 2008. "Conditional Grants, Grant-Seeking and Welfare when there is Government Failure on the Subordinate Level," ZEW Discussion Papers 08-031, ZEW - Leibniz Centre for European Economic Research.
    5. Trenovski Borce & Marjan Nikolov, 2015. "Cost-Benefit Analysis Of Performance Based Budgeting Implementation," Journal Articles, Center For Economic Analyses, pages 5-44, December.
    6. Alessandro Giosi & Silvia Testarmata & Sandro Brunelli & Bianca Staglianò, 2012. "Does the Quality of Public Finance Enhance Fiscal Discipline in the European Union? A Cross-Country Analysis," DSI Essays Series, DSI - Dipartimento di Studi sull'Impresa, vol. 21.
    7. Meldina Kokorovic Jukan & Elman Nadzakovic, 2022. "Performance Budgeting In The South-East Europe Countries: A Comparative Study On Present State And Future Perspectives," Economic Review: Journal of Economics and Business, University of Tuzla, Faculty of Economics, vol. 20(2), pages 23-40, November.
    8. Min-Seok Pang & Ali Tafti & M. S. Krishnan, 2016. "Do CIO IT Budgets Explain Bigger or Smaller Governments? Theory and Evidence from U.S. State Governments," Management Science, INFORMS, vol. 62(4), pages 1020-1041, April.
    9. Fatih Deyneli, 2019. "Does Performance Budgeting System Affect Fiscal Performance in OECD Countries?," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 8(2), pages 22-34, December.
    10. Mr. Brian Olden & Mr. Duncan P Last & Mr. Sami Yläoutinen & Ms. Carla Sateriale, 2012. "Fiscal Consolidation in Southeastern European Countries: The Role of Budget Institutions," IMF Working Papers 2012/113, International Monetary Fund.
    11. Dubravka Jurlina Alibegovic & Zeljka Kordej De Villa, 2006. "The Challenge of Building Proper Urban Indicator System: A Proposal for Croatian Cities," ERSA conference papers ersa06p354, European Regional Science Association.

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