Attacking Budgetary Incrementalism

There is wide agreement that attacking budgetary incrementalism is an important objective of budget reform. But when we go into battle against incrementalism, we need to be clear on what exactly we are fighting against. Like many other people, I use “incrementalism” to refer to the tendency of budgeting to treat baseline expenditure as given, […]

Unit Cost Budgeting: Use Selectively (4/4)

The idea that governments should base their budgets on output unit costs is very influential. Everywhere in the world one finds people who think that unit costs are the key to making performance budgeting work. Nowhere is this more true today than in the developing world.* I know of several developing countries where the budget […]

Unit Cost Budgeting: The Uncertainty Problem (3/4)

In this blog piece – the third in a series of four – I look at why budgeting based on unit costs doesn’t work well for services where there is a lot of uncertainty about the quantity of output which government will need to deliver. This is one of the key reasons why unit cost […]

When Unit Costs Don’t Work (2/4)

In this blog piece — the second of a four-part series on unit cost budgeting — I look at why unit cost budgeting cannot be applied to outputs which are highly “heterogeneous,” of which there are many in government. This is one of the main reasons why unit cost budgeting should be viewed as a […]

Unit Cost Budgeting? (1/4)

Funding public services based on output unit costs is a great idea. However, it only works for selected government services. The idea that the entire government budget should be based on output unit costs is therefore misguided. This series of four blog pieces looks at why this is a tool with strictly limited application in […]

The Illusion of Outcome-Based Budgeting

The notion that performance budgeting means budgeting based on outcomes is surprisingly widespread. It is, however, a misconception – a misconception which has led to confusion and missteps in PFM reform in some countries, particularly in the developing world. Outcome-based budgeting refers to the idea that governments should budget by deciding the outcomes they wish […]

Making Spending Review Fit for Purpose

Spending review, as I wrote recently, will be needed more than ever in the post-pandemic era. Surely, then, it is encouraging that there has over the past decade been a major expansion in the number of countries practicing spending review? Well, yes, but there is a problem. The problem is that in some countries, the […]

blue and yellow measuring tape

Non-Performing Performance Indicators

It is shocking that, in quite a few countries which embarked on performance budgeting reforms years ago, performance indicators remain awful. Performance indicators are, after all, a basic building block of any performance budgeting system. Yet OECD surveys – most recently in 2018 – have repeatedly shown that in half of member countries, available performance […]