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Improve Government Budgeting With a Performance-Based Approach
Learn how to implement performance-based budgeting to improve your use of public funds.
By 2028, 65% of government organizations will meet the growing demand for transparency and accountability by utilizing performance outcomes in their budgeting process. This research provides guidance on integrating performance-based budgeting techniques with legacy budgeting practices to better align resources with desired outcomes.
Download the research report to:
- Set performance metrics and targets that align with strategic and departmental priorities.
- Budget using performance outcomes to identify areas where reductions, eliminations or expansions may be necessary.
- Drive cultural change to shift budget-owner behavior and engage budget owners in the budgeting process.
About Government Budgeting
Government budgeting is the process by which public sector organizations plan, allocate, and manage financial resources to achieve their strategic goals and fulfill public needs. Traditionally, many government budgets have been built on historical spending patterns, where funding levels remain largely unchanged year after year regardless of actual outcomes. This legacy approach can result in misaligned budgets, delay key initiatives, and limit the government’s ability to respond to evolving priorities.
In response to increasing demands for transparency, accountability, and better results, government organizations are shifting toward performance-based budgeting (PBB). PBB allocates funding based on program outcomes that directly contribute to organizational goals. By integrating data and evidence into the budgeting process, governments can make more informed, forward-looking decisions about where to invest resources.
Implementing a performance-based approach requires a cultural shift within government organizations. It involves engaging department leaders early in the process, setting clear performance metrics, and ensuring that funding decisions are aligned with strategic priorities. While this transition can take several budget cycles to fully realize its benefits, it ultimately leads to more effective use of public funds, greater ownership and accountability, and improved outcomes for citizens.
Government Budgeting FAQs
What is government budgeting and why is it important?
Government budgeting is the process by which public sector organizations plan, allocate, and manage financial resources to achieve their strategic goals and meet public needs. It ensures that taxpayer funds are used effectively, supports transparency and accountability, and helps governments respond to shifting priorities and emerging challenges.
How does performance-based budgeting differ from legacy government budgeting?
Legacy government budgeting often relies on historical spending patterns, funding programs at similar levels year after year regardless of outcomes. Performance-based budgeting, on the other hand, allocates resources based on program outcomes and alignment with strategic goals. This approach integrates data and evidence to improve how resources are distributed throughout the budgeting process.
What are the key benefits of adopting performance-based budgeting in government?
Performance-based budgeting helps governments allocate resources more efficiently by linking funding to measurable outcomes and program effectiveness. This approach promotes greater transparency, accountability, and strategic alignment, ensuring that taxpayer money is directed toward initiatives that deliver the most value to citizens. It also encourages continuous improvement and data-driven decision-making across government agencies.