ABSTRACT
V.O. Key (1940) once asked, “on what basis shall we decide to allocate X funds for program A instead of program B?” If this question were presented to the average American, she might suggest that policy and program performance should direct budget allocations. She would realize that political power has its place, but she might prefer that it not dominate the budget process. If it were presented to the average federal employee, he might advocate incremental funding, with each program receiving a small increase or decrease each fiscal year depending on the policy and political exigencies of the day. Reasonable people can disagree about the bases on which to allocate public resources, but few would argue that performance be the sole basis for such allocation. In practice, budget decisions must to some degree consider both politics and performance. Therefore, this chapter asks, to what extent does performance serve as a basis for resource allocation in the federal government?
