This paper attempts to ascertain what light the empirical
literature sheds on the efficacy of performance budgeting.
Performance budgeting refers to procedures or mechanisms intended
to strengthen links between the funds provided to public sector
entities and their outcomes and/or outputs through the use of
formal performance information in resource allocation decision
making. The paper seeks to identify and examine the literature on
"governmentwide" performance budgeting systems-that is, systems
used by central budget decision makers (ministry of finance and
political executive) to link the funding they provide to those
agencies' performance. Performance budgeting principles are,
however, applied not only on a government wide basis, but also in
funding systems applied to specific categories of government
services. This paper does not attempt to review the empirical
literature on all such "sectoral" performance budgeting systems.
Rather, it undertakes a case study of the literature on one
specific sectoral system-output-based hospital funding systems.
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