Study on State-Level Performance-Based Budgeting

A study by Yilin Hou, a professor at the University of Georgia, examined performance-based budgeting. Performance-based budgeting is defined as a system of budgeting that allocates resources based on the achievement of specific, measurable outcomes. Hou looked at the following aspects of performance-based-budgeting:

• development of performance measures,
• its use in budgeting and management,
• its utility across the business cycle, and
• its usefulness for budget players.

After surveying data from 11 states, Hou found performance-based budgeting was used occasionally by legislators but more often by executive agencies. It was also found to be used more often in boom years than down years.