As I have noted elsewhere (Frank and D’Souza, 2004), much of the academic research in the performance measurement realm is survey driven.
Regrettably, the use of Likert scale fixed response questions fails to capture the blood, sweat, and tears required to convert an agency from line-item, control-oriented budgeting to a results-oriented format, in which allocations are made in line with productivity and strategic aims.
In ‘‘Toward Financial Freedom: Budgeting Reform in the U.S. Courts,’’
J. Edward Gibson chronicles the multi-year effort of the U.S. Courts to adopt performance budgeting. As the author notes, the U.S. Courts were an unlikely testing ground for budget innovation and the late Chief Justice William Rehnquist was an unlikely advocate for reform. But increasingly stringent budgets and a commitment to change brought a model of performance budgeting into being. The price, however, was steep. Many actors required two budget cycles of training. The 11thCircuit was a ‘‘guinea pig’’ used as a pilot for several years to get the proverbial kinks out of the system. Many actors had to amend their traditional budgetary roles;
many of the proponents had to acknowledge that not all their objectives could be met.
In the final analysis, an environment that rewarded commitment to change and a tolerance for the risks attendant to its institutionalization were critical ingredients. This case study provides an excellent overview of institutional factors contributing to the success of performance-based budgeting and shows a keen understanding of the nuances of leadership and trust that facilitate its implementation.
Many have advocated performance-based budgeting and management as a mechanism for demonstrating to citizens that their government can produce high quality services that are consistent with their needs. In ‘‘Public Participation in Local Performance Measurement & Budgeting,’’ Alfred Ho and Paul Coates detail the findings of their multi-year Sloan Foundation funded grant in nine Iowa communities that explicitly tested for the ability to link citizen input into the development of performance measures.
From the editor’s perspective, the most interesting component of this study is not the development of citizen relevant performance measures.
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More important was the re-socialization of both the citizens and the bureaucracy that took place during the research period. The former came to understand the differences between private and public service delivery, and to gain respect for the bureaucracy as a service provider. Similarly, the bureaucracy was sensitized to the fact that citizens could provide them with useful input on what to measure. Further, the bureaucracy learned to appreciate that performance measures were not simply an internal performance improvement tool; they could indeed play a vital role in educating taxpayers. This is an important lesson, one that demonstrates a potentially high payoff to investment in performance-based management mechanisms.
Milan Dluhy’s ‘‘Enhancing the Utilization of Performance Measures in Local Government: Lesson from Practice,’’ is based on the author’s research and experience as Director of the Institute of Government at Florida Inter- national University in Miami. Dluhy notes that an unfortunate misstep the bureaucracy often takes in budget reform is failure to consult with the legislative branch prior to implementation. This was the mistake that Lyndon Johnson made in 1966 when he tried to implement Planning, Programming, and Budgeting at the Federal level and as Dluhy notes, it appears that many would-be implementers of performance budgeting at the local level make the same mistake.
Dluhy notes the import of developing SMART measures (e.g., specific, measurable, achievable, relevant, and trackable) with the appropriate ‘‘buy- in’’ from experts and political stakeholders. Institutionalizing performance measures takes time. It also requires an organizational champion who assures it is not simply a paper exercise, but one which is put to use in budget submissions, strategic planning, and employee remuneration. And lastly, Professor Dluhy notes that implementation of performance measure- ment and budgeting cannot be viewed as a personal political agenda — it must be deployed as a tool for improving jurisdiction well-being.
The notion that local governments should monitor and report perfor- mance of their operations is nothing new. Ken Smith and Lee Schiffel note in ‘‘The Intersection of Accounting and Local Government Performance Measurement,’’ a young man (and future Nobel laureate) interning with the International City Managers Association, by the name of Herbert Simon, was advocating such measurement in 1938!
Fast forward nearly 70 years and we find many professional organiza- tions, the International City and County Managers Association (ICMA) and the Government Accounting Standards Board (GASB), to name just two — that are advocating for such measurement. But, as Smith and Schiffel detail, these organizations have conflicting ideas about what should be measured and how it should be reported. From the authors’ vantage, these unanswered questions inhibit development of a common performance
reporting language that would facilitate benchmarking and interjurisdic- tional comparisons.
Further, as Smith and Schiffel note, the rather spotty participation in the current ICMA effort lends credence to the reality that comparative performance measurement across jurisdictions presents thorny definitional and benefit-cost questions that academic researchers have neglected.
Meanwhile, the accounting profession, which advocates mandatory performance reporting, and the general public administration community, which sees performance measurement for internal performance improve- ment, fight a performance measurement paradigm war that intellectually shortchanges both sides.
This is a sobering and thought-provoking chapter that suggests performance reporting and budgeting are not fads. But the perceived cost- effectiveness of implementation remains uncertain to many practitioners due to the failure to agree upon the parameters of a common reporting model.
Performance measurement, like any other activity, does not take place in a vacuum. Institutional settings and the political climate are drivers of performance. In ‘‘Reformed County Government Structures and Service Delivery Performance: An Integrated Study of Florida Counties,’’ Alejandro Rodriguez examines the impact of structure and performance in the area of road maintenance. As the readers probably know, Public Choice adherents believe that smaller, overlapping jurisdictions will perform better than those with less competition. Contrariwise, mainstream public administration adherents see ‘‘bigger as better’’ with the Weberian monocracy yielding better performance for taxpayer dollars. Using both quantitative and qualitative findings, Rodriguez finds that counties that were more reformed
— organized with fewer jurisdictions and more direct county authority over road maintenance — had better maintained roads at lower cost.
Would these findings be replicated elsewhere? That is impossible to answer. What is important to note is that however we define performance, it is likely that institutional arrangements and intervening characteristics, such as community income and education levels, may be critical determinants of performance outcomes respective of administrative actions. Stated differ- ently, Rodriguez’s findings are a reminder that there may be elements of performance that are beyond direct management control; this is a critical factor that all stakeholders in a performance measurement system must understand at the onset.
The design and development of performance measures for any agency is likely to be a difficult task. As Patrick Mullen notes in ‘‘Federal Performance Reporting Requirements: From Financial Management to E-Government,’’
development of these measures at the federal level has been extraordinarily difficult. Many agencies have conflicting goals and objectives and readily available benchmarks or peers may be nonexistent. Furthermore, many
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stakeholders feel that the Government Performance and Reporting Act (GPRA) of 1993 may eventually go the way of other federal budget reforms such as Planning Program and Budgeting Systems (PPBS) or Zero-Based Budgeting (ZBB). What’s more, at the same time that agencies are being required to comply with GPRA they are also facing a plethora of mandates in the realms of accounting and e-government.
This broad-gauged effort at ‘‘reengineering,’’ however well-intended, has the potential to overwhelm personnel and to subvert the intended improvements. Nonetheless, a positive unintended outcome of these simultaneous reform efforts is the experimentation taking place in the realm of performance reporting. Agencies are now developing annual reports that comply with GPRA and the other management reforms that have taken place in the federal government in the last 15 years. In essence, federal agencies are now developing reports that have a ‘‘balanced scorecard’’
feel to them, detailing financial management, information technology, and operating performance measures. The ‘‘crowded management space’’
that Mullen describes is the apparent necessity that is fostering innovation in the reporting realm. Mullen’s work describes a model that may have application beyond the federal sector.