Results-oriented Budget Practice in oecd countries odi working Papers 209

6.2 Amenability to performance measurement 
An OECD study distinguished between three types of performance management systems, given 
three major objectives of performance management systems: management and improvement, 
accountability and control, and budgetary savings (OECD, 1997a). An emphasis on management 
and improvement will result in a system that emphasises competition, performance budgeting that 
emphasises output and outcomes and accounting systems that stress an awareness of costs.
Incentive systems will stimulate performance improvement. Accountability and control systems 
will emphasise transparency and openness, with performance agreements setting out 
responsibilities. Savings objectives will focus on inputs, with less emphasis on performance 
systems. Solutions will often be the cheapest, not the best. 
Pollitt builds upon work by Bouckaert and Ulens (citied in Pollitt 2001) to offer four types of 
programmes which vary in their amenability to performance measurement in descending order: 
•
Tangibles: standardised recurrent products e.g. road building
•
Non-tangibles: services tailored to the needs of individuals e.g. teaching
•
Non-tangible ideal services: ‘less standardised, less routine services’ e.g. policy advice 
•
Regulatory activities: e.g. social services inspection
He cites Gillibrand and Hilton’s explanation of the difficulty of linking resources to results in the 
case of the Ministry of Defence: 
“It deploys extremely expensive assets, to produce a result which is tangible in concept, but 
mercurial in practice, ‘fighting power’” (cited in Pollitt, 2001, p 20). 
Gillibrand and Hilton’s work raised the question of price/quality trade-offs which has important 
implications for results based budgeting. Where both costs and outputs are clear then it is relatively 
easy to appropriate resources to results. Where outputs are less standardised, the appropriation 
becomes more problematic. Pollitt notes cases of regulatory services such as policy advice where 
performance targets are increasingly being defined in terms of variables such as timeliness.
However, this rather sidesteps the question of what constitutes good policy advice.