A. The Origins of Performance Budgeting
The concept of performance budgeting has a long history. Although elements of program budgeting were in evidence in the United States prior to World War II, the term performance budgeting is more clearly associated with the 1950s reforms in the United States. The latter attempted to develop performance information for budgeting and to reorient the U. S. federal budget process from its focus on inputs to one that also included the outputs derived from using those inputs. The approach really took off when the Hoover Commission on the organization of the executive branch of the government in 1949 promoted this approach and encouraged its widespread implementation. The Budget and Accounting Procedures Act of 1950 required agency heads, in coordination with the Bureau of the Budget, to support their budget requests with information on performance and program costs by organizational unit. The U. S. budget for the 1950/5 1 fiscal year was the first to show the effects of this changed perspective. It should be noted that, even from these beginnings, the Hoover Commission used the terms program budgeting and performance budgeting almost synonymously.
. In these early days, performance budgeting was not viewed as a fundamental change in budget decision making, but rather a useful adjunct that was perhaps relevant for only some service-based operations. These reforms were seen as being severely handicapped by inadequate accounting systems that could not identify the full costs of government operations; the equally constraining problem of developing measures of performance; and, most particularly, the lack of interest of decision makers in using performance information (Bulkhead, 1956). In practice, program and performance budgeting proved time consuming and required much administrative support: improved accounting, costing, activity, and performance-measurement systems. Nor was it very popular with appropriation committees, w ho were more comfortable with detailed line item controls rather than providing lump-sum appropriations in return for specified levels of performance. Budgeters also often preferred that information on operating targets, workload, and performance standards not be explicit but remain largely hidden in detailed objects of expense.