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

2.3 Programme, Planning and Budgeting Systems (PPBS) 
PPBS came to Washington during World War II following application at the level of local 
government (to the Department of Agriculture, then to the Department of Defense under Robert 
McNamara in 1961) (Peters, 1995; Premchand, 1993). It was also used in France and Canada.
PPBS continued to be used in the US Department of Defense in the 1990s, with only marginal 
changes since the 1960s. President Johnson determined the adoption of PPBS by civilian agencies 
requiring them to “articulate their program goals in specific, preferably quantifiable, results, and 
conduct evaluations to measure the degree to which these results were achieved” (Mathiasen, 1993, 
p 24). Application in the US Defense Department reflected the view that military leaders’ expertise 
was too closely linked to a particular service for them to make objective or rational policy. Policy 
and programme planning is over 10-20 years, with programming and budgeting over six years.
Jones and Bixler (1992, p 22) point out that the system fails to take account of rapid changes in 
world conditions such as the Iraqi invasion of Kuwait. 
Defining PPBS 
A former Member of the UK Parliament, John Garrett has described PPBS as “a planning system in 
which expenditures are displayed in a way which relates them to major policy objectives and in 
which analysis is carried out on the costs and benefits of alternative routes to those objectives” 
(Garrett, 1972, p 115). 
PPBS in the UK 
One of the terms used by Osborne and Gaebler, output budgeting, was used a quarter of a century 
earlier by the UK Department of Education and Science. Former UK academic Spiers (1975) 

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described the system adopted by the Department which is remarkably similar to that prescribed by 
Osborne and Gaebler, save for the financial rewards for results. 
Garrett compares the input approach to budgeting in the general estimates for the UK Ministry of 
Agriculture with the programme based approach adopted by the US Department of Agriculture. In 
the UK, inputs included salaries, rents and financing committees, while in the US the categories and 
sub-categories of programmes of departments such as “communities of tomorrow” and “health and 
safety” were listed. Garrett points out two problems related to the latter approach. First, the aims 
of government are more difficult, complex and diffuse than those in business. Second, often 
governments do not articulate objectives and these have to be “distilled from legislation and 
regulations, Ministerial statements and the proceedings of official inquiries and Parliamentary 
committees” (Garrett, 1972, p 118). 
Garrett recognises that for some complex programmes, it may be difficult to measure achievement.
He recommends the use of ‘intermediate’ indicators of volume or service provided where the 
ultimate benefit may be difficult or impossible to measure. He cites the example of an evening 
class where the objective is cultural enhancement and the intermediate indicator is number of places 
provided or occupied. A problem that PPBS shares with other managerialist approaches such as 
MbO is that, following the point that Peters makes about benefit payments, it is entirely possible to 
achieve output targets while making little or no contribution to the realisation of an outcome if there 
is a poor correspondence between the two.