The Impact of Traditional Budgeting Systems on the Effectiveness of Performance‐Based Budgeting: A Different Viewpoint on Recent Findings

This article expands on recent research into performance‐based budgeting (PBB) initiatives in the states. It seeks to explain survey findings showing that, while most states are implementing PBB reforms, few show any evidence of direct behavioral changes resulting from such reforms—either in terms of the development of, or response to, new performance‐based incentives, or allocations that are linked to performance. The explanation offered is that PBB approaches are implemented in addition to traditional approaches, resulting in the traditional approaches dominating PBB. In order to influence behavior, PBB reforms should be implemented as replacements of, not additions to, pre‐existing budgetary regimes.