Assessing the Impact of Performance-Based Budgeting: A Comparative Analysis across the

United States, Taiwan, and China

Author(s): Jack Yun-Jie Lee and XiaoHu Wang
Source: Public Administration Review, Vol. 69, Supplement to Volume 69: Comparative
Chinese/American Public Administration (Dec., 2009), pp. S60-S66
Published by: Wiley on behalf of the American Society for Public Administration
Stable URL: http://www.jstor.org/stable/40469073
Accessed: 05-07-2017 07:24 UTC

REFERENCES
Linked references are available on JSTOR for this article:
http://www.jstor.org/stable/40469073?seq=1&cid=pdf-reference#references_tab_contents
You may need to log in to JSTOR to access the linked references.

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted
digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about
JSTOR, please contact support@jstor.org.

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at
http://about.jstor.org/terms

American Society for Public Administration, Wiley are collaborating with JSTOR to digitize,
preserve and extend access to Public Administration Review

This content downloaded from 118.97.87.219 on Wed, 05 Jul 2017 07:24:28 UTC
All use subject to http://about.jstor.org/terms
 Jack Yun-jie Lee
National Open University, Taiwan
XiaoHu Wang
University of Central Florida

Economic Assessing the Impact of Performance-Based Budgeting:

Development,
A Comparative Analysis across the United States,
Public Budgeting,
and Fiscal Taiwan, and China
Administration

Jack Yun-Jie Lee is Professor of Public What is the impact of performance-based budgeting and decision making (Jordan and Hackbart 1999;
Administration at the National Open Univer-
(PBB) on governmental spending? Do various PBB Joyce 1993; Willoughby and Melkers 2005), few
sity in Taiwan. His Ph.D. in Public Policy
implementation strategies result in different outcomes? researchers have explored how it may affect govern-
Analysis is from the University of North

Carolina at Chapel Hill. He was a Visiting
Professor at Nanjing University, China and
a Fulbright Visiting Scholar of Kennedy
School of Government at Harvard University.
He thanks Fulbright Foundation and the
Asia Programs of Kennedy School for their
support of this study.
E-mail: jack3747kimo@yahoo.com.tw
XiaoHu Wang is professor of public
administration at the University of Central
Florida. His research covers topics in per-
formance management and public financial
management. He is the author of Perform-
ance Analysis for Public and Nonprofit
Organizations (Jones & Bartlett, 2009).
The authors. Jack Yun-jie Lee of National Open
University in Taiwan and XiaoHu Wang of the
University of Central Floriday
gathered data from the United
States, Taiwan, and China
(Guangdong Province) to explore
the possible intermediate- and
long-term results of PBB. The
data demonstrate how the impacts
of PBB vary across countries and
regions.
ment spending behaviors. After all, PBB scrutinizes
public program performance and should affect how
these programs behave in
resource allocation decision
[Performance-based budgeting making and curbing wasteful
(PBB)] scrutinizes public
spending. This is especially
critical during periods of rapid
program performance and
should affect how these growth in debts and deficits as
governments struggle to control
programs behave in resource spending.
allocation decision making and
curbing wasteful spending. Using databases from three

E-mail: xwang@mail.ucf.edu
the 1980s, perform- "
ance-based budgeting exploratory
(PBB) has been adopted by many countries to understand how
to improve accountability and the effectiveness of spending behaviors
public programs. The U.S. Congress passed the enriching the conv
Chief Financial Officer Act of 1990 and the Govern- impact. A compari
ment Performance and Results Act (GPRA) of 1993, may uncover possi
which together laid down the legislative foundation and impediments,
for PBB reforms. PBB has also advanced rapidly in findings and broad
other countries in the Organisation for Economic research question o
Co-operation and Development (OECD) as a way to of PBB on spendin
make government more competitive and cost-efficient
and as a response to cynical taxpayers who demand Next is a framewor
more accountable government spending. Many ing growth, PBB p
have expanded the practice of PBB and introduced spending, followed
new legislation that requires performance measure- section to present
cludes with lessons
ment and benchmarking (OECD 2002; Willoughby
and Melkers 2005). In the countries that have used of assessing PBB im
performance measurement for a number of years,
Framework
many have also shifted to report outcomes and build
a stronger link between performance and budgeting
Spending Growth
(OECD 2002; Perrin 2003). Following the princi- By the mid-1980s, the U.S. federal deficit had grown

ple of the GPRA, Taiwan and China (Guangdong significantly. The total federal budget deficit grew
from $2.8 billion in 1970 to $221 billion in 1986 and
Province) also adopted PBB in 2001 and 2003,
to $290 billion in 1992. The deficit growth was large
respectively.
enough to require a set of budgetary reforms aimed
Though studies have been conducted to examine in part at curbing the growth of the national debt
PBB s immediate impact on management practices (Carroll 1995; Joyce 1993).

S60 Public Administration Review December 2009 Special Issue

This content downloaded from 118.97.87.219 on Wed, 05 Jul 2017 07:24:28 UTC
All use subject to http://about.jstor.org/terms
More recently, many Asian countries were also challenged to curb
budget deficits and government debts. In Taiwan, for example, the
government faced a fiscal crisis in which public debt grew at an
accelerated pace. According to a report published by the Council
for Economic Planning and Development in 2003, Taiwan led the
world in issuing public debt between 2000 and 2002, resulting in
17.9 percent annual growth in the public debt to gross domestic
product (GDP) ratio during the three-year period. The long-term
deficit of the central government accelerated from NT$2,357.2 bil-
lion in 2000 to NT$3,936.7 billion in five years (NT is the Taiwan
money unit: New Taiwan Dollar). The total public debt of central
and local governments ran up to NT$4.8 trillion in 2006, account-
ing for 40 percent of GDP.
In China, public spending has been a key tool for the government
to sustain economic growth. Public spending relative to GDP in
China has also increased quickly since the mid-1990s (OECD
2005a). One study estimates a 7 percent public expenditure growth
in GDP between 1994 and 2000 (OECD 2005b). With a signifi-
cant portion of off-budget spending, the true level of public expen-
ditures should be even higher.
Performance-Based Budgeting Implementation
In the United States, the Government Performance and Results
Act became law in 1993, establishing a strategic planning and
performance budgeting framework for the federal government.
The Bill Clinton administration established the National Perfor-
mance Review (NPR) Committee the same year to implement
management reform with the objective of budget deficit reduc-
tion. The White House released a legislative proposal, the Gov-
ernment Reform and Savings Act (HR 3400), to implement the
NPR's cost-cutting recommendations. Section 3C of the Clinton
administrations fiscal year 1995 budget, "Delivering a Government
That Works Better and Costs Less," made clear that this reform was
intended to save budget and to cut costs.
The GPRA requires specific objectives, standards, and goals for
federal programs, submission and publication of federal agencies'
performance reports, and integration of performance goals for major
expenditures into the federal budget. The NPR's goal is to enhance
performance accountability by eliminating wasteful spending and
achieving better program results through an extensive performance
review.
Executive leadership support plays an important role in PBB
implementation. Both the Clinton administration and Congress
demonstrated strong support for the GPRA and PBB. The central
role of the U.S. Office of Management and Budget in the imple-
mentation was ensured in the content of the GPRA. Performance-
based budgeting continued in the George W. Bush administration
with the implementation of the Program Assessment Rating Tool
(PART) to assess federal programs' purposes, strategic planning,
management, and results. PART is believed to have had limited
but steady impact on management communication and decision
making (Newcomer 2007). Moreover, the message to improve
government performance and accountability through PBB has
resonated throughout various levels of government in the United
States (De Lancer Julnes and Hlzer 2001; Melkers and Wil-
loughby 1998).
This content downloaded from 118.97.87.219 on Wed, 05 Jul 2017 07:24:28 UTC
All use subject to http://about.jstor.org/terms
Taiwan
The cabinet of the executive branch of Taiwan (Republic of China),
the Executive Yuan, initiated a national conference on administrative
reforms in 2001, launching a series of budgetary reforms intended to
transform administrative agencies into result-oriented performers. In
the same year, the government issued the Administrative Regulations
of Performance Assessment for Agencies (ARPAA) subordinate to the
Executive Yuan, outlining a PBB framework for the public sector.
With strong support from the prime minister, the ARPAA requires
each agency to submit strategic performance objectives, perfor-
mance indicators, and performance targets in three key performance
areas: services, manpower, and funding. Each agency is required to
develop 5-10 strategic performance objectives, as well as perfor-
mance indicators for each objective that reflect the agency's specific
functions and activities.
All agencies that are subordinate to the Executive Yuan and local
governments are required to implement PBB. At the end of each
fiscal year, each agency is assessed as to how well its performance
compares with the performance objective. PBB-related training
courses have been offered at various levels of government, including
city and county governments, to improve implementation.
Compared with some other PBB systems in the world, Taiwan's
PBB reform has two distinct aspects. One is strong executive
leadership in the Executive Yuan to implement and constantly
evaluate the reform. Hundreds of major PBB projects are classified
and controlled at the Executive Yuan level. Their annual perfor-
mance evaluations are submitted to the Research, Development,
and Evaluation Commission (RDEC) of the Executive Yuan.
The RDEC assembles committees consisting of members from
the Council for Economic Planning and Development, National
Science Council, Directorate General of Budget Accounting and
Statistics, and Central Personnel Administration, as well as experts
outside the government, to review and evaluate these projects and
their affiliated agencies. The final evaluation results are published
on an RDEC Web site for public review and are used in making
funding decisions. The RDEC also monitors the progress of each
program and verifies such progress with on-site inspections.
A monitoring report is published regularly.
The second distinctive feature of Taiwan's PBB reform is a carefully
designed project management process in which each project is sub-
ject to intensive administrative scrutiny during planning, implemen-
tation, and evaluation (Sung 2008). Figure 1 illustrates this process
of preliminary self-evaluation, classification and control, supervi-
sion, and performance assessment. Included first in a medium-term
plan (four years), various governmental projects are incorporated
into an annual plan after a preliminary agency self-evaluation. The
projects are then classified and reviewed at the Executive Yuan,
ministry, and agency levels, where the performance assessment
is conducted. The Department of Regional Affairs of the RDEC
reviews local government projects subsidized by the central govern-
ment. Commissioned by the Executive Yuan, the RDEC is mainly
responsible for project management, although the Council for Eco-
nomic Planning and Development, Public Construction Control,
and National Science Council are also involved in the management
of projects in their specialties.
Assessing the Impact of Performance-Based Budgeting S61
 Source: Reprinted with the permission of the Research, Development, and Evaluation Commission.
The authors thank Deputy Director Wu-Yu Lee of the RDEC for the support.

Figure 1 Performance-Based Budgeting Project Management in Taiwan

Noticeably, the project management process involves a carefully
designed assessment phase in which each agency uses performance
results achieved in the previous three years to set a performance
goal. The performance goal for the next four years is established,
often at 10 percent higher than the previous goal. The results of this
assessment are taken into consideration in making funding decisions
for the budget next year. Moreover, the agency's performance results
are linked with employees' financial benefits.
China (Guangdong Province)
In 2003, Guangdong Province, China, became the first province in
the People's Republic of China to launch PBB reform. The province,
located in southern China, was the first to implement market-ori-
ented reform in the late 1970s, and it is known for its progressive
economic and political initiatives. In 2003, Guangdong's per capita
GDP was among the highest in China. In 2003, the Guangdong
government's revenues amounted to roughly 13.4 percent of total
provincial government revenues, and its expenditures made up
about 9.8 percent, both the largest in China.
The finance department of Guangdong Province initiated and
coordinated the PBB initiative. After securing support from key
government party officials, members of the local congress, and
other interest groups, the department started publishing an annual
guidebook of regulations and policies to promote its PBB initiative
among department officials. The book also includes expert opinions
from the central Ministry of Finance, the local congress, and the
Guangdong finance, audit, and supervision departments to dem-
onstrate the broad support behind the reform initiative (CDRF
2006).
Furthermore, the department created a new agency, the Perfor-
mance Evaluation Division (PED), to compile and analyze financial
statistics, and to organize and conduct the performance evaluation
of programs. The evaluation consists of an agency self-evaluation as
well as a formal assessment. The formal assessment often focuses on
several selected programs and is done by public officials from the
finance department as well as external experts such as scholars or
university professors. An evaluation report is prepared by the Perfor-
mance Evaluation Division and delivered to agencies and individual
officials (Niu, Ho, and Ma 2006).
Despite its admirable goal, the PBB effort in Guangdong was
considered experimental. It is an administration-driven effort, and
no PBB legislation was passed. The scope of the reform has been
limited, too. Only programs in six large agencies were selected.
These agencies were selected because they had sufficient resources
to implement the initiative and because agency leaders demon-
strated support for the reform. The programs selected are in areas
of transportation, education, tourism, research, and development.
Guangdong is limited by its lack of expertise in performance data
analysis and evaluation. The Performance Evaluation Division has
not successfully developed skills and capacities needed to extend
the PBB to other programs, and the progress in developing expert
inventory has remained unsatisfactory.
Despite its goal to link performance with budgetary decision mak-
ing, Guangdong reformers set a modest objective at the early stage
of the reform to enhance understanding of performance evaluation.
With no drastic changes in the management system, the focus of
PBB was on learning, education, experimentation, and information

S62 Public Administration Review December 2009 Special Issue

This content downloaded from 118.97.87.219 on Wed, 05 Jul 2017 07:24:28 UTC
All use subject to http://about.jstor.org/terms
dissemination to help officials understand the need for PBB. No
significant effort was made to link performance to funding deci-
sions. And, no change was made to alter expenditure classifications
and accounting codes to reflect the program cost needed for making
performance funding decisions.
Table 1 summarizes the key dimensions of PBB in the United
States, Taiwan, and China (Guangdong). While the PBB effort in
the United States is clearly characterized by legislative pressure for
performance accountability in all federal agencies, the intent of the
PBB in Taiwan and Guangdong is more of an administrative effort
to improve managerial practices and operations. Particularly in the
case of Guangdong, no legislation was involved, and the executive
leadership support was relatively limited. PBB training has been
thorough and intensive in the United States and Taiwan, but not
in China, where the PBB effort is designated as experimental, with
relatively limited financial support. Moreover, while the government
in Taiwan shows an assertive intention to link performance results
to funding decisions, the practices in the United States and China
suggest a more cautious approach to performance funding.
Performance-Based Budgeting and Government Spending
How does PBB influence government spending behavior? PBB
practitioners have tried to integrate performance information into
budgetary decision making (Cope 1995; Grizzle and Pettijohn
2002; Willoughby and Melkers 2000). Program outcomes are used
in budget deliberations about funding priorities and levels, helping
to allocate resources more effectively in order to meet expectations
of the public and elected officials (GAO 2001).
Specifically, PBB can be used as a strategy to change spending
behaviors by proposing fewer ineffective programs or by elimi-
nating more ineffective existing programs. In the United States,
for example, the GPRA and related legislation were designed to
control or eliminate wasteful use and mismanagement of pub-
lic funds (Breul 2007). In Taiwan, the PBB effort is specifically
designed to control governmental spending by using performance
management tools when the government is facing a fiscal crisis,
manifested in an accelerating government debt level. PBB practice
is mainly treated as a spending control tool used to placate citizens
and mass media.
It is important to note that budgeting is essentially a political
process, and spending decisions represent a compromise between
diversified political powers. Performance information, even if used
in making spending decisions, is likely adopted to advance the
value of a political agenda in the budgeting process (Joyce 1993;
Wang 2008). There is some evidence to show the impact of PBB
on budgetary decision-making capabilities and behaviors (Jordan
and Hackbart 1999; Lee and Burns 2000; Willoughby and Melkers
2000).
Method
This study employs the comparative method to systematically assess
alternative explanations for PPB practices adopted in different coun-
tries (regions), and to examine effects of these practices on spending
behaviors. The comparative method specifies the conditions under
which one country can learn from another, helping researchers find
new policy options in other countries and discover latent policy
constraints and opportunities.
The selection of countries (regions) being compared is based on
purposive sampling, with the United States as a highly developed
country (GDP per capita of $44,197), Taiwan as a newly developed
region (GDP per capita of $16,442), and China as the largest devel-
oping country (GDP per capita of $3,250).
A time-series design is used to assess the impact of PBB on spend-
ing. This design allows intermediate- and long-term assessment,
generating observations of multiple years before and after PBB as
shown in the following diagram:
. . . OOOOO P OOOOO . . .
where O is an observation of spending in a specific year, P repres
the implementation of PBB, and the ellipses represent any possib
observations of spending. This design allows multiple observation

Table 1 Performance-Based Budgeting Practices: A Comparison

United States Taiwan GuangDong Province

Design
Key purposes Performance accountability, Managerial efficiency and effec- Managerial efficiency and
spending control tiveness, spending control effectiveness
Key driving forces Legislators and some administra- Administrators Administrators
tors

Legislation Yes Yes No

Scope All agencies All agencies Selected agencies
Implementation
Presence of executive Strong Strong Moderate
leadership
Education and training Strong Strong Moderate
Implementation length 1993 2001 2003
(since...)
Evaluation
Performance results linked to Moderately intended Strongly intended Moderately intended
funding decisions
Performance results linked to Strongly intended Strongly intended Strongly intended
improving management and

Asse

This content downloaded from 118.97.87.219 on Wed, 05 Jul 2017 07:24:28 UTC
All use subject to http://about.jstor.org/terms
of spending, resulting in a hypothesis that spending variations after DSL = a + bxGDPt_x + bt_x + bt_x + b4 PBB,
PBB indicate the possible impact of PBB. Multiple observations
where SGRt and DSLt are measures of spending at time t; GDPtX is
also allow a measurement of possible intermediate- and long-term
the growth rate of GDP at time t-l; Rf x is the growth rate of rev-
impacts of PBB. In the assessment, government spending is mea-
enue at time t-l; E^x is the growth rate of expenditure at time t-l;
sured by the spending growth rate and the spending level in relation
PBB denotes the practice of PBB (1 if PBB was adopted, and 0 if
to government revenues and GDP, defined as follows:
PBB was not adopted in a given fiscal year); t represents the annual
data for 1980-2006; and a and b are parameter estimates.
Spending Growth Rate in t (SGR)
= {Total Expenditure t- Total Expenditure tX) I Total Expenditure^ Note that the SGRf model does not include EfX. This is because
SGRf and Et_x should be highly associated. The SGRf model excludes
Deficit or Surplus Level in t (DSL)
EtX in order to avoid a severe condition of the models endogenesis.
= {Total Revenue t- Total Expenditure) I GDPt

Findings and Discussion

PBB practices should help control spending growth, so that a
negative relationship between PBB and 567? is expected. DSL is a
measure of the spending level in relation to revenues and GDP. A
positive relationship between PBB and DSL is expected, indicating
that PBB should increase the surplus or reduce the deficit.
This study subscribes to the normative economic theory of supply
and demand to develop the empirical model for analysis, and it
also adopts the prescriptive public administration theory in public
spending (incrementalism) in selecting the
control variables. Clearly, government spend-
ing is affected by numerous socioeconomic In
and organizational factors that should be GuangdongPBB may
controlled in the model detecting the impact
provide
of PBB. These factors can be classified as
a significant impact on the
those that create societal demands for public
spending, as well as those on the supply side
(the government) that produce the capacities
to meet the demand. Thus, spending (S) can
be specified as a function of societal demands
{D) for public programs and government s capabilities to meet the
demand (C):
S=f(D,Q
Table 2 shows regression results of the spending growth rate for the
three countries (regions) in the analysis. Results using data for dif-
ferent time frames in parameter estimation of the models are similar,
suggesting that the models are robust. The F tests of the models
indicate that all of the models are statistically significant at the . 1
level. Tests show that models do not suffer severe conditions of mul-
ticollinearity (all VIFs < 2.195). The Durbin-Watson statistics and
related tests indicate that the models may not suffer autocorrelation.
All regression coefficients for PBB are nega-
tive, showing the expected signs of direction
the United States
for PBB impact. Also, the results indicate thatand
. have
. a.
significant
resultsimpact on spend- do n
ing growth in Taiwan, where the regression
evidence that
PBB
coefficient is statistically significant at the .05
level. A significant relationship between PBB
spending and
growth rate.
spending growth in Taiwan suggests that
PBB restrains spending growth. In the United
States and Guangdong, however, the results
do not provide evidence that PBB has a sig-
nificant impact on the spending growth rate. These results indicate
that the PBB impact varies, depending on purposes and imple-
mentation strategies. In Taiwan, as discussed earlier, a clear goal of
spending control was developed for PBB and the corresponding

Identification and inclusion of all of the supply and demand fac-Table 2 Regression Results for the Spending Growth Rate
tors in a model is impossible and does not serve the exploratory
U.S. Taiwan Guangdong
nature of this study. After all, the main purpose of the analysis is to
Intercept .006829 17.291 4.676
explore the relationship between PBB and budgetary outcomes by
(0.019) (2.042) (0.788)
controlling socioeconomic and financial factors in a given politi-
cal-economic context, rather than to construct a perfect model to GDP^ 1.21 -0.225 0.582
(2.308)** (-0.201) (2.259)**
explain expenditure levels or budget deficits. With the clarity and VIF=2.195 VIF=1 .456 VIF=1.022
parsimoniousness of the model in mind, we use GDP as a proxy for
flM -0.157 -0.189 0.172
societal demand factors and revenue growth as a proxy for supply (-0.819) (-1.161) (1.220)
factors. VIF=1.374 VIF=1.570 VIF=1.02
PBB -0.192 -20.103 -.1903
(-0.100) (-2.783)** (-0.316)
This study also employs the prescriptive public administration VIF=1.719 VIF=1.099 VIF=1.023
theory in public spending, which holds that public expenditure R2 0.271 0.324 0.252
F 2.845 3.677 2.576
is the result of previous spending behaviors (incrementalism). In
(.060) (.027) (.078)
considering past spending behaviors, multiple observations in
D-W 1.829 1.358 2.025
expenditure growth in the past are included in the model. Therefore,
a time-series statistical model is constructed for the United States, Note: Unstandardized regression
*Significant at the .10 level; **
Taiwan, and Guangdong, respectively, for the period 1980-2006,
.01 level, two-tailed test.
which covers the time span of PBB, specified as: R2 = Buse raw-moment R2
D-W = Durban-Watson statistic
SGRt = a + bYGDPtX + b2RtX + b3 PBB VIF = Variance inflation factor

S64 Public Administration Review December

This content downloaded from 118.97.87.219 on Wed, 05 Jul 2017 07:24:28 UTC
All use subject to http://about.jstor.org/terms
strategies of spending control were implemented vigorously, while growth,
the U.S. adoption of PBB in spending control, though intended, is more cau
not fully enacted in practice. PBB in Guangdong was not purposely
linked to spending control. In Taiwa
reform h
Table 3 shows the results of regression on the deficit or surplus level. growth,
The models are robust after repeated tests using data from different spending
time frames to estimate the models' parameters. The F tests indicate and the
that models for the United States and Taiwan are statistically signifi- read wit
cant at the .001 level, while the model for Guangdong is statisti- items (e.
cally significant at .107. Tests show that the models do not suffer are not i
severe multicollinearity (all VIFs < 3.004). The Durbin- Watson ture leve
statistics and related tests indicate that the models may not suffer
autocorrelation. PBB has
been exp
Results for the deficit or surplus level are equally diverse as those explain w
for the spending growth rate. PBB may reduce the deficit or surplus mental a
level in the United States (p < .001), but such impact disappears in 2006), m
Taiwan and Guangdong. Interestingly, the results show a posi- and to r
tive relationship between PBB and the deficit or surplus level in increase
Guangdong. This suggests that the implementation of PBB propels,
not reduces, the spending level in relation to revenue and GDP, The fore
or that PBB reduces the revenues collected in relation to expen- countrie
ditures. Either way, PBB appears to increase the budget deficit in mentatio
Guangdong. formal l
critical i
The findings seem to provide evidence that PBB has gradually agencies
become an essential part of administrative practice in the U.S. and resp
federal government, indicating that the performance-based reform political
strategy may affect the deficit level. A recent study shows that a rela- it also pr
tively large number of federal managers use performance informa- support
tion in making resource allocation decisions, and they have adopted perform
performance-based practices in management (Newcomer 2007).
Although these practices have little impact on curtailing expenditure Strong e
PBB imp
the law
Table 3 Regression Results for the Deficit or Surplus Level
impleme
U.S. Taiwan Guangdong nections
Intercept -4.091 -1.964 0.432 operatio
(-3.278)*** (-2.800)*** (0.399) ing the
GDPt1 -0.043 0.159 0.030 perform
(-0.237) (1.727) (0.648)
tion system).
VIF=2.256 VIF=1.570 VIF=1.069
E -0.110 -0.074 -0.085
(-1.631) (-3.026)*** (-1.986)* Strong intent and effort to link performance results with resource
VIF=1.421 VIF=3.004 VIF=1 .869 allocation decision making, as shown in Taiwan, also appears impor-
R 0.170 0.066 0.021
tant for the PBB impact on spending. The literature indicates that
(2.576)*** (3.016)*** (0.654)
VIF=1.225 VIF=2.933 VIF=1.790 performance measurement is widely used in budget preparation and
PBB 2.736 -0.625 -2.274 examination, but less so in funding decisions by the legislature for a
(4.056)*** (-1.030) (-2.118)** variety of technical and political reasons, including concerns about
VIF=1.733 VIF=1.521 VIF=1.022 the validity of the measurement system and fear that performance
R2 0.607 0.445 0.282 funding is a threat to the political power structure. The threat of
F 8.478 4.417 2.164 these obstacles should be recognized and eliminated in order for
(.000) (.009) (.107) PBB to influence spending.
D-W

Note: Implementation length may also play a role in realizing the PBB
Unstandardiz
Significant at
impact. As the U.S. and Taiwan experiences show, PBB is anthe
exhaus-
.01 level, two-tailed
tive assessment process demanding intensified effort in time and
R2 = Buse raw-mom
D-W = paperwork to define performance, develop data collection systems,
Durban-Wat
VIF = conduct analysis, and evaluate the results. Accounting
Variance and audit
infla

Assessing the Impact ot Perrormance-basea buagexing m>d

This content downloaded from 118.97.87.219 on Wed, 05 Jul 2017 07:24:28 UTC
All use subject to http://about.jstor.org/terms
systems should provide the information needed for assessment. De Lancer Julnes, Patria, and Marc Hlzer. 2001. Promoting the Utiliza-

Also important is the creation of positive incentives to encourage tion of Performance Measures in Public Organizations: An Empirical

compliance with and support for PBB. Clearly, the development Study of Factors Affecting Adoption and Implementation. Public

and improvement of these necessary elements in PBB take time, and Administration Review 61(6): 693-708.

the maturation of a PBB system may indicate the development of Grizzle, Gloria A., and Carole D. Pettijohn. 2002. Implementing Perfor-

an organizational culture that is more accustomed to performance mance-Based Program Budgeting: A System-Dynamics Perspective.

funding. Public Administration Review 62(1): 51-62.

Jordan, Meagan M., and Meri M. Hackbart. 1999. Performance Budget-

Summary ing and Performance Funding in the States: A Status Assessment.

This study uses data from three countries (regions) to explore the Public Budgeting and Finance 19(1): 68-88.

possible intermediate- and long-term impacts of PBB. It finds Joyce, Philip G. 1993. The Reiterative Nature of Budget Reform: Is

that PBB with different purposes and implementation strategies There Anything New in Federal Budgeting? Public Budgeting and

may have different impacts on governmental spending. PBB with Finance 13(3): 36-48.

a clear intention of expense control and resource allocation may Lee, Robert D., and Robert C. Burns. 2000. Performance Measurement

reduce the expenditure growth rate, as in the case of Taiwan, and in State Budgeting: Advancement and Backsliding from 1 990 to

improve the deficit and surplus level, as in the case of the United 1995. Public Budgeting and Finance 20(1): 38-54.
States. Melkers, Julia, and Katherine Willoughby.
1998. The State of the States: Performance-

From a practical perspective, the results Based Budgeting Requirements in 47 out of

From a practical perspective,
indicate that if PBB is designed to influ- 50. Public Administration Review 58(1): 66-73.
the results indicate that if
ence spending behaviors, efforts should be Newcomer, Kathryn, 2007. How Does
PBB is designed to influence Program Performance Assessment Affect
made to solicit legislative support; to involve
top executives in the entire PBB process of spending behaviors, efforts Program Management in the Federal Govern-

design, implementation, and evaluation; to

establish clear funding performance objec-
tives; and to develop a culture of perfor-
mance improvement. Academically, this
study develops a model to empirically test
the hardly examined intermediate- and long-
term impacts of PBB. The model provides a
basis to further the academic investigation on
should be made to solicit
legislative support; to
involve top executives in
the entire PBB process of
design, implementation, and
evaluation; to establish clear
funding performance objectives;
ment? Public Performance and Management
Review 30(3): 332-50.
Niu, Meili, Alfred Ho, and Ma Jun. 2006.
Performance-Based Budgeting in China: A
Case Study of Guangdong. Paper Presented at
the Second International Conference on Pub-
lic Management: 21st Century Opportunities
and Challenges, University of Macau, China.

the impact of performance management in and to develop a culture of Organisation for Economic Co-operation

the public sector. and Development (OECD). 2002. Develop-

performance improvement.
ing Performance Measures for Public Financial

Importantly, the study enriches the conver- Management. Paris: OECD.

sation of performance management by introducing the relevant

information in a comparative setting. Compared with studies in a Effectiveness and Equity. Paris: OECD.

sole country or region or studies of cross-sectional databases, the

validity of this research is enhanced through cross-examining PBB Finances to Better Serve Growth. Paris: OECD, http://www

practices and empirical results from different countries and regions org/document/31/0,3343,en_2649_34595_35343711_l

with a longitudinal timeframe of 20 years. Hopefully, this explor- html, [accessed August 17, 2009].

atory research will attract more scholarly attention to the compara- Perrin, Burt. 2003. Implementing the Vision: Addressing Challe

tive study of PBB in further research. Results-Focused Management and Budgeting. Paris: OECD.
Sung, Yu-Hsieh. 2008. Economy Experience Sharing - Chin
Presentation at the APEC Workshop on Government Perf
References and Results Management Report.
Breul, Jonathan D. 2007. GPPA - A Foundation for Performance U.S. General Accounting Office (GAO). 2001. Results-Orient
Budgeting. Public Performance and Management Review 30(3): Practices in Federal Agencies. Washington, DC: Government
312-31. Office. GAO-01-1084SP.

Carroll, James D. 1995. The Rhetoric of Reform and Political Reality
in the National Performance Review. Public Administration Review
55(3): 302-12.
China Development and Research Foundation (CDRF). 2006. Hand-
book of Public Budgeting [in Chinese]. Beijing: CDRF.
Cope, Glen Hahn. 1995. Budgeting for Performance in Local Govern-
ment. In The Municipal Yearbook 1995, 42-52. Washington, DC:
International City/County Management Association.
Wang, XiaoHu. 2008. Convincing Legislators with Performance Mea-
sures. International Journal of Public Administration 31(6): 654-67.
Willoughby, Katherine G., and Julia E. Melkers. 2000. Implementing
PBB: Conflicting Views of Success. Public Budgeting and Finance
20(1): 105-20.
ernments: Understanding Budgeting, Comm
Effects. Public Administration Review 65(2):

S66 Public Administration Review December 2009 Special Issue

This content downloaded from 118.97.87.219 on Wed, 05 Jul 2017 07:24:28 UTC
All use subject to http://about.jstor.org/terms