This research examines the effect of budget characteristics (BC) on employee performance (EP) and explores the moderating role of psychological empowerment (PE) in this relationship. The data were gathered from 304 managers in state-owned companies in the Iraqi public sector. The current study draws on Goal Setting Theory (GST) to develop a model for public budgeting in developing economies. Symmetric effects were evaluated using Partial Least Squares Structural Equation Modelling (PLS-SEM), while causal configurations (asymmetric effects) were evaluated using fuzzy-set qualitative comparative analysis (fsQCA). The Multi-Criteria Decision-Making (MCDM) approach was used to prioritize the factors. The results indicate that PE strengthens the effects of budget participation (BP), budget goal clarity (BGL), and budget goal commitment (BGC) on EP. At the same time, it has no significant interaction with budget goal difficulty (BGD). The fsQCA results demonstrate multiple high-performance pathways through which budget designs are translated into performance outcomes. Regarding the MCDM results, goal commitment and participation are the levers with the greatest overall impact, providing practical guidance on where to direct improvement efforts. The methodological contribution of the study is the integration of symmetric and asymmetric approaches with decision analysis. From a practical perspective, the study provides a data-driven roadmap for centrally managed and resource-constrained government entities by promoting participatory budgeting, setting transparent, unified, and achievable goals, and developing the capacity to translate budgets into performance.
Alhasnawi et al. (Thu,) studied this question.