Policy Diffusion and Performance-based Budgeting

This article applied the policy diffusion model as a theoretical framework for interpreting the international spread of performance-based budgeting, based upon 33 OECD case studies of countries that have implemented this reform. The data show that the historical development of performance-based budgeting was fairly consistent with the diffusion model. In particular, the adoption of performance budgeting took off during 1985-1995 and then accelerated over the following 15 years, and the primary innovators were a group of four English-speaking countries with comparatively laissez-faire economies (the United States, Canada, Australia, and New Zealand). The case studies indicated that performance-based budgeting was generally part of a broader program of governmental reform, that executive agencies were more important than parliaments in managing it, that it became quite important in budget- and policy-making, and that implementing it faced a significant number of challenges.