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Tightening the Results/Funding Link in Performance Budgeting Systems

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  • Marc Robinson
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    Influential contemporary performance budgeting models have sought to tighten the link between results and budgets. This paper considers three approaches – budget-linked performance targets, budgeting based upon output or outcome costs, and budgetary performance incentives – and assesses their potential to enhance the results/funding link. It is possible to develop real links between performance targets and budgets, although generally not of a formularized nature. Criticisms of performance targets, based particularly on the imperfections nature of performance indicators, tend to be somewhat exaggerated. Considerably more use can be made of output cost information in budgeting – although there are important imitations arising from the nature of some outputs, and from the prevalence of qualitative rationing. Initiatives designed to ensure that agency performance is systematically considered when deciding agency budget allocations are highly desirable. The idea of additional funding as a reward for good performance needs, however, to be approached cautiously and selectively.

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    Paper provided by School of Economics and Finance, Queensland University of Technology in its series School of Economics and Finance Discussion Papers and Working Papers Series with number 147.

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    Date of creation: 20 May 2003
    Handle: RePEc:qut:dpaper:147
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    1. Marc Robinson, 2003. "The Output Concept And Public Sector Services," School of Economics and Finance Discussion Papers and Working Papers Series 155, School of Economics and Finance, Queensland University of Technology.
    2. Marc Robinson, 2002. "Output-Driven Funding and Budgeting Systems in the Public Sector," School of Economics and Finance Discussion Papers and Working Papers Series 101, School of Economics and Finance, Queensland University of Technology.
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