Performance Budgeting in the U.S. Federal Government: History, Status and Future Implications (Report‪)‬

1. INTRODUCTION Performance measurement and performance budgeting are topics that have long been a part of the public administration agenda in the United States (Eghtedari and Sherwood, 1960a; 1960b; Schick, 1971). Interest in performance budgeting developed in response to perceived abuses at the local government level as early as the 1870s in the U.S. (e.g., in New York City), at the beginning of the 20th century (e.g., in the budget research of the New York City Bureau of Municipal Research, which eventually became the Brookings Institution), from a response to growth of government at all levels and particularly of the federal government during the presidency of Franklin D. Roosevelt during the Depression of the 1930s, through the mid-1940s and in the post-World War II era, especially during the Eisenhower presidency (McCaffery and Jones, 2001: 43-67). The first wave of what we would identify as pure performance budgeting occurred during the 1950s under the guidance of the President's Bureau of the Budget (BOB). In the view of the leadership of the BOB in the 1950s, performance budgeting and performance measures were intended to emphasize efficiency and effectiveness. Then, as now, broader measures (outcomes) were desired but often were difficult to define and measure, particularly in human services programs. Nonetheless, performance budgeting in concept has proven persistent over time in the U.S. federal government, as well as in state and local government. Evidence of this trend is found in the huge expansion of the literature in this area in the past decade. It is interesting to note that until the 1990s, in the U.S. and internationally, performance data were intended for internal government use, primarily by budget and management control offices and line agency managers, and after 1993 by members of oversight committees of Congress. The external use of performance measures arose in some part in response to the customer orientation of reform initiatives intended to make government more accessible and to improve service quality to citizens. Such initiatives include the National Performance Review in the U.S., Total Quality Management, and a range of initiatives that have been lumped together, described and analyzed as the New Public Management (see for example Borins, 1997; Schedler, 1997; Thompson, 1997; Lynn, 1997).