ABSTRACT
CONTENTS 24.1 Introduction ................................................................................................................. 388 24.2 Th e Key Question ........................................................................................................ 388
24.2.1 Economics-Based Reformers versus Pragmatists ............................................. 388 24.2.2 Jeff ersonian Budgeting.................................................................................... 389
24.3 Waves of Economics-Based Reforms ............................................................................ 389 24.3.1 Classical Performance Budgeting: Th e First Wave of Economics-Based
Budget Reforms .............................................................................................. 390 24.3.2 Program Budgeting: Th e Second Wave of Economics-Based Budget
Reforms ...........................................................................................................391 24.3.2.1 Program Budgeting and the Relationships between Activities,
Outputs, and Outcomes ................................................................. 396 24.3.2.2 Th e Impact of Program Budgeting ................................................. 397
24.3.3 Restructuring Budgets to Better Align Resources with Performance .............. 398 24.3.4 Contemporary Performance Budgeting .......................................................... 399
24.3.4.1 Contemporary Performance Budgeting at the Federal Level ...........401 24.3.4.2 Contemporary Performance Budgeting in the States and
Localities ........................................................................................ 405 24.4 Capital Budgeting ........................................................................................................ 406 24.5 Lessons Learned ........................................................................................................... 407 References .............................................................................................................................. 408
24.1 Introduction For more than a half century, public administrators performing budget formulation have been trying to substitute economics-based criteria for politics. Today, the federal government, states, and localities use mixtures of budgeting techniques including classical performance budgeting using workload analysis, program budgeting, and contemporary performance budgeting with its quantitative indicators of outputs and outcomes. Recent reforms and associated techniques such as benefi t-cost analysis are facilitated by the increased power of microcomputers and improved spreadsheet, presentation, and statistics software together with computer networks and tailormade network software. In the past few years, substantial improvements have been made in the Internet dissemination of budgetary information to the public and their legislative and news media representatives.
