Budgeting for Success - Kevan Joey - Bog

Performance-Based Budgeting (PBB) has been, and continues to be, implemented
within developed and developing countries as part of a wider public sector reform
process. The purpose is to embed accurate performance measurement within public
sector organisations (see Franklin, 2006, Aristovnik and Seljak, 2009, Schick, 2007)
and provide a more efficient and effective approach to resource allocation (Shah and
Shen, 2007). PBB adoption and implementation has not been without criticism and
there is ongoing debate as to the real use and effectiveness of PBB. The historical
context within which PBB developed, and the justification for why countries decide
to implement PBB, has been the subject of scant research, which has led to a lack of
understanding as to its purpose and effects.
This thesis undertook an historical examination of PBB as part of fiscal reform within
the public sector. It specifically used a case study regarding the adoption and
implementation of PBB within the Indonesian government as its central field of
analysis. The study used qualitative research methodology, beginning with a
historical review of the evolution of PBB as the new public budgeting system, using
the Lüder FMR model (2002) as a conceptual framework. It then utilized new
institutional sociology (NIS) theory as a theoretical framework to examine the extent
to which isomorphism was evident during PBB implementation within the
Indonesian central government. Finally, the Lüder FMR model (2013) was employed
as a conceptual framework to investigate the motives that underpinned the
development of PBB within Indonesian local government, and the factors
influencing its implementation.
This study offers three conclusions about the historical context of PBB evolution and
the decision by countries to adopt. First, PBB was initially implemented in the
United States in 1949 and expanded to developing countries through United States
(US) and United Nations (UN) funded projects. Using the Lüder FMR model (2002),
this study finds that the primary motive underpinning PBB implementation in the
US was public sector demand for more informative and measured budgets. Similar
motives were also found in the UK, Australia and Denmark. That the
implementation of PBB within the US and UK budgeting systems were largely seen
as positive, was the primary stimulus for PBB implementation across the globe.
Furthermore, this study found the outcome of budgetary reform varied between
countries, from that of a single format that involved traditional budgeting methods,
to 'old PBB', to a dynamic approach involving multiple stages that culminated in
PBB modification.