Performance budgeting is an important budgeting tool allowing countries to allocate and prioritise resources more effectively by linking them to measurable outcomes. It enhances accountability and transparency, and cultivates a performance-oriented culture that strengthens public service delivery.
In 2023, 28 out of the 33 OECD countries that responded to the OECD Performance Budgeting Survey (85%) implemented some form of performance budgeting. The most common approach is performance-informed budgeting, used by 14 out of 33 countries (42%), where performance information is included in budget documents alongside financial information to inform budget decisions. Seven out of 33 countries (21%) use a presentational approach, in which performance information is provided as background material, separate from the main budget document. The same number of countries (7) use a managerial approach, using performance data primarily for performance management at the organisational level. This approach often emphasises understanding the underlying reasons for any shortfalls, rather than imposing automatic funding cuts (Figure 9.3).
Performance information is used for a variety of purposes. Just over two-thirds of OECD countries that implement performance budgeting (20 out of 28, 71%) use performance information to inform annual resource allocations, and 16 out of 28 countries (57%) use it to guide managerial decisions. Notably, only about one-third of countries (9 out of 28, 32%) use this information to inform multi-year budget planning (Figure 9.4).
OECD countries use a variety of internal accountability mechanisms to strengthen the impact of performance budgeting by ensuring high-quality data are available for decision making. Almost 80% of countries (22 out of 28) that implement performance budgeting engage in regular discussions between finance ministries and line ministries to improve the quality of performance information. In 13 countries (46%), a senior official must sign off the performance information included in budget documents, adding a layer of supervision and responsibility. In 9 countries (32%), line ministries are subject to specific measures if targets are missed. These might include increased scrutiny, or there might be consequences for future budget allocations (Table 9.1).
External accountability and transparency are supported by the widespread publication of performance reports, with 24 out of 28 OECD countries (86%) making such information publicly available. One emerging practice is the use of interactive web-based dashboards, used by 12 countries (43%). These allow external users to explore performance information in a visual format, and quickly assess which targets have been met or missed. Parliament also plays a crucial role in reinforcing accountability. In 19 countries (68%), elements related to performance budgeting are regularly reported to parliament, while 9 countries (32%) hold parliamentary committee hearings and 8 countries (29%) conduct parliamentary debates that make use of performance budgeting information. However, structured engagement with civil society remains minimal, with only three countries (11%) reporting such initiatives (Table 9.1).
