Directions in Development: Toward Next-Generation Performance Budgeting

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This analysis explores the challenges national governments face in connecting performance measurement to the annual budget process. It draws on comprehensive reviews of four advanced countries that were early adopters of reform and three pioneers from Central and Eastern Europe. The study examines both current systems and the evolution of their approaches over time, aiming to bridge the gap between self-assessments and best-practice guides. It addresses the concerns of budget departments in Eastern Europe and Central Asia, many of which are eager to implement performance-based budgeting and learn from the experiences of earlier reformers regarding practical challenges and adaptations to best practices. The case studies reveal a common pattern of disappointment with performance budgeting outcomes, yet a strong belief in its potential has led to ongoing efforts to enhance the connection between budgeting and performance. These efforts have resulted in significant variations in implementation and benefits across countries. Such variations provide valuable insights for developing next-generation performance budgeting models, helping to avoid common pitfalls while integrating successful modifications from those with extensive experience in the field.