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

Acronyms 
OECD
Organisation of Economic Co-operation and Development 
PM
Prime 
Minister 
MbO
Management by Objectives 
UN
United 
Nations 
PPBS
Programme, Planning and Budgeting Systems 
NASA
National Aeronautics and Space Administration 
SMART 
Specific, Measurable, Achievable, Reports-focused and Time-bound 
SAI
Supreme 
A 
INTOSAI 
Internal Organisation of Supreme 
NHS
National Health Service 
SAO
State 
Audit 
Office 
ROB
Result-Orientated Budgeting

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Chapter 1: Current Practice in OECD Countries
Over the last twenty years, budgetary reform in OECD countries has involved an increasing 
emphasis on outputs and outcomes but not at the expense of an inputs focus. This change in 
emphasis requires a focus on programme performance in addition to traditional focuses on 
administrative control and procedures. This section examines the current state of play in selected 
OECD countries. 
An OECD review of developments in its member countries shows that 
•
Most governments include performance information in budget documentation and half subject 
this information to audit; 
•
Reporting of performance against outputs and outcomes is variable, with several formats being 
used and up to half of the countries surveyed not covering the whole range of government 
activities; 
•
Half of the surveyed counties used performance information to inform budgetary allocations; 
•
60% of the surveyed countries still account on a cash basis; 
•
Nearly 50% of countries surveyed require Ministry of Finance approval for viring of funds from 
one output to another (PUMA, 2002a). 
Table 1 summarises the state of play in selected OECD countries, which have attempted to move to 
a results-orientation. A number of general points can be made. First, the introduction of results 
oriented budgeting is an iterative process which can be traced back to the introduction of PPBS in 
the post war period in the United States when government programmes were linked to budgeting.
More recently, an explicit results focus can be traced back to the early 1990s, for example in the 
United States, which introduced the Government Performance and Results Act in 1993. It should 
be emphasised that the PUMA survey shows that taken overall, OECD member states’ pattern of 
change is extremely variable.
This survey focuses exclusively on those states that have moved towards an output and outcome 
orientation, with most of those countries (including Australia, Canada, New Zealand, the United 
Kingdom and the United States of America) attempting to link outcomes to the allocation of 
resources. New Zealand was considered to be a world leader when it adopted an output focus in the 
late 1980s and early 1990s. However, they have been overtaken by other OECD member states in 
recent years. All selected countries report that the move to results oriented budgeting is unfinished 
business, with ongoing reforms currently being planned and implemented. Reforms include the 
development of systems by improving their technical strengths and the rolling out of programmes 
across further areas of government, including agencies and sub-central government. Major 
technical issues continue to include the linking of outputs to outcomes, and of outcomes to 
resources, and the development of appropriate accounting systems to support these moves. 
Second, developments in OECD countries are supported by the OECD Working Party of Senior 
Budget Officials led by the Minister of Finance of the Netherlands. 2001 saw the publication of the 
inaugural edition of the OECD Journal on Budgeting which published commissioned articles by 
senior officials and academics from OECD member states. In 2002 the Working Party published a 
set of Best Practices for Budgetary Transparency drawn from the experience of member countries.
These cover the budget; reporting mechanisms; disclosures; integrity, control and accountability; 
audit; and public and parliamentary scrutiny (OECD, 2002b). 
Third, and arising from the previous point, OECD member states are focusing on a range of 
common issues. These include the need to make clearer links between outputs and outcomes, as 

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discussed above. In addition, countries are working on the development of statements of goals 
which become the focus of attention of department and ex-ante accountability examining the 
performance of departments in relation to those goals. This has required them to develop 
sophisticated performance management regimes which in turn have led to changing policy 
management structures within the executive and enhanced roles for legislatures and Supreme Audit 
Institutions. For example, the United Kingdom’s approach is based on a shift in the role of the 
Treasury from the management of interest rates to the planning and evaluation of government 
departments’ expenditure links to goals and targets. Other countries report a strengthened oversight 
role for the legislature and changing roles of audit bodies from oversight of the legitimacy of 
departmental expenditure to include programme evaluation. 

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