STRATEGIC MANAGEMENT ACCOUNTING

Strategic Management Accounting

Executive Summary

Though on paper budgetary reform sounds promising, in practice reformers face numerous difficulties. Recurring problems are, among others, the formulation of (sound) objectives, getting helpful performance data and aligning inputs, performance (output) and societal influence (outcome). This paper discovers the current state of affairs of performance budgeting both quantitatively (an international review of a assortment of OECD-countries) and qualitatively (a case study of performance budgeting and steering in the Netherlands) at the centered level of government. Next to describing an supplement aim of the study is to interpret cross-national variance. The assumption that the characteristics of the political system leverage the scope and shape of a reform is partly confirmed. The accessibility and quality of the quantitative data perplex complicated testing, however. The case study shows blended results. The assumptions drawn from four distinct perspectives (rational, political, institutional and circumstantial) were partly confirmed

Table of Contents

Chapter 1: Introduction4

Aims and Objectives5

Chapter 2: Literature Review7

2. Theoretical framework7

2.1 Conceptual framework7

2.2 Analytical framework10

2.3 International Comparison15

2.3.1 Database15

2.3.2 Results: dependent variable17

2.3.3 Explanation20

Chapter 3: Findings and Analysis21

3.1 Reform drivers23

3.2 'Towards a safer society'25

3.3 National Framework the Netherlands Police27

3.4 Results of the Reforms: Priorities, Policy and Performance28

3.4.1 Explanation29

3.5 Budgetary Framework30

3.5.1 Budget Process30

3.5.2 Structure of the Budget31

Chapter 4: Discussion32

Chapter 5: Conclusion34

Reference35

Appendix38

Chapter 1: Introduction

As both economic pressure and mounting demands from citizens called for better public performance, foremost efforts have been made to focus on performance. Initiated by Anglo-Saxon countries the performance movement is prevalent, nowadays. Within the area of public finance, this has resulted in a 're-introduction' of performance budgeting. This entails, approximately, budgeting inside a strategic context and associated to performance and performance describing in terms of output and outcome (Hoogenboom, 2006).

Given the universal agreement on the value of performance budgeting, the exchange of best practices and the promulgation of standards in international forums, we would anticipate convergence towards further implementation of result-oriented budgeting. Comparative investigations, although, point at numerous differences in terms of scope, uniformity and achievement of the reform. This paper farther explores similarities and differences and the function of contextual factors (Hofstede, 2005).

Aims and Objectives

The paper focuses on the 'front side' of the budgetary process (the allocation) at the central level of government. This will be studied in two ways: quantitatively (an international review among a selection of OECD member states) and qualitatively (a case study of performance budgeting and steering in the Netherlands in the area of public safety). Focal points are the availability and use of performance data in budgeting (both) and performance steering (case study), particular in the following purposes.

A first objective of this paper is to map the international state-of-the-art of performance budgeting and benchmark countries on a set of signs of performance budgeting. Borrowing from the 2007 revise of the OECD Survey on Budget Practices and Procedures likenesses and dissimilarities of a assortment of OECD member states will be defined.

A second objective of this study deals with the implementation of performance budgeting. Though on paper budgetary reform sounds promising, in practice reformers face numerous ...