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November 28, 2011

For Legislating for Results: Research on the Legal Foundations of Performance-informed Budgeting Systems in the States

Posted by Yi Lu, Associate Professor, Department of Public Management, John Jay College of Criminal Justice

Legislating for results is a new emerging body of research on performance budgeting. This research places the legal foundations of performance-informed budgeting systems front and center. The legal foundations are important because a key question in this field is how to integrate performance information and budgeting. The answer is not about identifying more individual factors, instead, it lies in organizing and connecting the factors to have a holistic understanding of the integration dynamics. One way to address the holistic understanding is to study how well the legal foundations connect the various factors into a coherent framework.

Our research examined performance budgeting laws in the thirty-nine US states with relevant legislation on the books. The preliminary results indicate that states which scored as having strong performance budgeting systems are more likely to have laws in place that specify a wider array of performance measurement development, protocols, and oversight for application to budgetary decisions. In addition, these states are more likely to have law that dictates responsibilities for establishing a statewide strategic plan and a role or roles for citizens in the budgeting process.

Findings suggest that for the successful application of a performance budgeting system, the law should, at the very least, specify components relating to measurement development, types of measures, linkages of measures with agency strategic plans and connections of plans to budgets, and performance information updating, oversight, evaluation, and reporting. In addition, the law should articulate the responsibilities of the executive and legislative branches and extend a visible role to citizens. Results here seem to confirm the positive relationship between the comprehensiveness and specificity of law and the strength of system implementation. State governments with strong performance budgeting systems, as measured by the scores of Government Performance Project, have more comprehensive laws and greater specificity regarding who is responsible for tasks, how performance information is used and its review. States with weaker systems are less likely to have such robust laws. These findings lend some credence to propositions that performance budgeting law matters to this reform’s success.

To know more about this, please see:

Lu, Yi, Katherine Willoughby, and Sarah Arnett.  2011. Performance Budgeting in the American States: What’s Law got to do with it? State and Local Government Review 43 (2):79-94.

Lu, Yi, Katherine Willoughby, and Sarah Arnett. 2009. Legislating Results: Examining the Legal Foundations of PBB Systems in the States. Public Performance & Management Review 33 (2):266-287.

Melkers, Julia E., and Katherine G. Willoughby. 2004. Staying the Course: The Use of Performance Measurement in State Governments. IBM Center for the Business of Government.

Liner, Blaine, Harry P. Hatry, Elisa Vinson, Ryan Allen, Pat Dusenbury, Scott Bryant, and Ron  Snell. 2001. Making Results-Based State Government Work. Washington, DC: The Urban Institute.

If you have any questions, please feel free to contact Dr. Yi Lu via email at ylu@jjay.cuny.edu.

Note: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF or IMF policy.

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