Implementing Performance‐Based Program Budgeting: A System‐Dynamics Perspective

The article proposes a model for evaluating budget reforms that combines insights from budgeting, policy implementation, and system‐dynamics literatures. System‐dynamics modeling combines both quantitative and qualitative research techniques to provide a new framework for applied research; its use is illustrated using performance budgeting as an example. Applied to the implementation of Florida's performance‐based program budget, the model identifies actions in the short run that will increase the reform's likelihood of success: providing clear communications; facilitative budget and accounting routines; reliable performance information. The model also identifies critical legislative behaviors that influence executive implementation: how the legislature in the long‐run uses performance information to inform resource allocation and how it applies incentives or sanctions to programs that achieve or fail to achieve their performance standards. The legislature has the opportunity to use program reviews prepared by legislative staff to invigorate the executive branch's resolve to continue implementing the reform.