Association for Public Policy Analysis & Management

The evolution of performance budgeting has spanned decades and has remained the norm of budgetary practice among OECD countries. According to a survey of OECD budget offices in 2016, about two-thirds of the 26 reporting countries require the practice. However, within these countries, there is a great variety of practices, and the use of performance data and evidence in goal setting, budget preparation, appropriation, budget execution, and spending review differs among these countries. In general, managerial responses to poor performance are more likely than budgetary consequences. There are also mixed signals about the roles of performance information in improving the conditions of public finance in these countries, and it is unclear how much the legislatures of these countries rely heavily on performance information to make budgetary decisions. Based on the long history of performance budgeting reform among OECD countries, this paper discusses the potential and limitations of evidence-based decision-making, how various institutional and organizational factors may influence the practice, and what should be done more to encourage it so that policymakers, budgeting officials, and program managers will be more equipped to handle various fiscal challenges and the growing pressure to do more with less.