Master Public Administration

This is an interesting book addressing Performance Information. Usually, you

run across the term “Performance Measurement,” but this replaces

“measurement” with “information” and, I think the difference is significant. OK,

the book uses the term “Performance Management” in the title but attempting to

measure performance is at the heart of what you are reading.

How information is collected, who collects it, subsequently influences policy

decisions regarding what needs to be addressed, or what we might call “reform.”

How exactly is information used once it is collected? So, there is a relationship

between what takes place on one side (all the information collected) and the

other (using all that information in some reasonable and effective ways).

Instead of thinking of the term “Performance Measurement” which sounds

detached, objective, analytical, the term “Performance Information” raises a

whole host of questions associated with a world that is more imperfect, where

the subjective matters. As the author points out, there is information that is

gathered and used to make changes or reforms but, at the same time, there is a

selective process to what is accomplished. As a result, some aspects of

performance measurement are not achieved or even tried.

Issues such as agency leadership (at either the Federal or state level), a

culture that pervades an organization, or other issues, influence the choices made

in what is to be accomplished.

So now it’s your part. Enjoy reading this book. Address the important points

that you got out of the book—and take the time to explain what is

important and why. As part of your conclusion address a word: Cautious. This is

what you want to be, cautious, when it comes to collecting information and going

through the process of figuring out how to use it once collected.

The book that you are reading is:

Donald Moynihan, The Dynamics of Performance Management: Constructing

Information and Reform (Wash. D.C., Georgetown University Press, 2008)

1) minimum of five pages.

2) Besides covering what you need to from above, comment on what you

think about this book and why. The “and why” means that you want to get

to specifics. Think in terms of, just for example, “Here are three points I

want to raise about this book and here is the reason I want to address

them.” So avoid generalizations regarding your opinions on the book.

1
An Era of Governance
by Performance Management

The beginning of the twenty-first century finds us in an era of governance by per-
formance management. Frederick Mosher charted the history of government in
the United States via the management characteristics of each era, portraying the
twentieth century as dominated by two phases: government by the efficient (1906–
37) and government by managers (the post-1937 era).1 In recent decades, the con-
cept of performance has become central to public management reform, reflecting
a fusion between the key values of both management and efficiency, now more
broadly redefined to include effectiveness.2

In this era, public managers are asked to justify their actions not just in terms
of efficiency but also by the outcomes they produce. They meet performance-
reporting mandates, are asked to do more with less, and must explain the per-
formance of their programs. The public sector is expected to be able to
demonstrate its value and to constantly seek new ways that foster performance.
The most frequent and widely adopted reforms of the past three decades are tied
to the concept of performance. Reforms that have incorporated pay-for-
performance, total quality management, strategic planning, performance meas-
urement, benchmarking, contracting out, increased managerial flexibility, and
decentralization have consistently claimed improved performance as their ultimate
goal. The assumption of these reforms is that changes in management systems
could and should be made in a way that enhances performance.

The popularity of performance management is reflected in its semantic fertility.
In earlier times, progressive reformers spoke simply of performance measurement.
Business executives have recommended strategic planning and management-by-
objective. State governments have attempted variants of performance budgeting for
decades. In addition to these previous monikers, we hear about managing for re-
sults, results-based reforms, and entrepreneurial budgeting. The logic common to
each approach is that government agencies should produce performance informa-
tion and use this information to inform decision making. There will doubtless be

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EBSCO Publishing : eBook Collection (EBSCOhost) – printed on 11/14/2013 3:25 PM via LINDENWOOD UNIV
AN: 228430 ; Moynihan, Donald P..; The Dynamics of Performance Management : Constructing Information
and Reform
Account: 092-800

additional variations that arise, adding a new luster to a core idea that has, at best,
a mixed record of success.

This book is about the era of governance by performance management. It de-
scribes why and how performance management systems are constructed and ex-
amines the assumption that performance information is used to improve public
decisions. In doing so, it argues that we need to rethink the purposes and expecta-
tions of performance management.

Performance management reform has enjoyed ardent champions who have laid
out a doctrine of how this reform shall save government. But it has also had critics
who insist that it is, as Radin puts it, a “hydra-headed monster” that reemerges every
few years despite a record of dismal failure.3 This book seeks to rethink performance
management by acknowledging its weaknesses and its potential. The overarching
theme of this book is that performance management has not worked as expected, but
in some cases it has had positive impacts. Knowledge of the environment of agency-
level actors and the nature of performance information dialogue is the key to un-
derstanding when performance management can succeed. In practice, performance
management reform in the United States has been a messy affair. The implementa-
tion of performance management reforms has not strictly followed the recipe of re-
form proponents and has not led to the benefits predicted by reformers. Despite
problematic adoption, we still see benefits from performance management, largely
occurring within agencies rather than among decisions made by political officials.
The book introduces an interactive dialogue model to understand performance in-
formation use. This model points to the ambiguity inherent in performance infor-
mation. As actors with specific roles and interests communicate with one another,
performance information will be used to serve those interests. The interactive dia-
logue model therefore predicts that cross-institutional dialogues will see performance
information used for advocacy purposes. In intra-institutional dialogues, however,
interests and beliefs are more homogenous, and it is more likely that information en-
genders learning and problem-solving rather than advocacy and conflict.

The current era of governance by performance management coincides with a
period of antibureaucratic impulses. Proponents of performance management say
that it is important not just because of improved effectiveness but also because it
is necessary for the credibility of public action. Such claims are overstated because
public distrust in government is fed in part by scandals and failures that are often
political in nature, and controls to prevent such failures may run at odds with a per-
formance approach that liberates managers. However, in a time of public distrust
of government, the rhetoric of reform becomes more potent, and the language of
results becomes a rare public currency that citizens view as legitimate.

How important are these performance management reforms to the actual man-
agement of government? It is only a slight exaggeration to say that we are betting

4 Chapter One

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EBSCO Publishing : eBook Collection (EBSCOhost) – printed on 11/14/2013 3:25 PM via LINDENWOOD UNIV
AN: 228430 ; Moynihan, Donald P..; The Dynamics of Performance Management : Constructing Information
and Reform
Account: 092-800

the future of governance on the use of performance information. The current era
is also characterized by a willingness to adopt new structural forms of government
and controls, such as networks or outsourcing, or to simply provide greater free-
dom to managers. New structural forms and modes of control raise difficult ques-
tions. How do we coordinate? How do we manage? How do we control? How do
we exert accountability? How do we improve? How do we engage citizens? Per-
formance information is frequently cited as the answer. We are told that perfor –
mance information will allow elected officials and policymakers to set goals. It will
provide the basis for accountability. It will be tied to incentives. It will allow in-
novations to be identified and diffused. It will improve the allocation of scarce
public resources. It will allow citizens to give feedback on services. The one con-
stant in visions of future government is the availability and smart use of perfor –
mance information. If performance information does not prove to be the linchpin
for the future of governance, we will have to return to the basic questions listed
above and find some alternative answers.

Despite the importance of performance information to the future of gover-
nance, we have a weak understanding of how and why it is used in practice. Gov-
ernments have never been so awash in performance data, mostly because
bureaucrats are required to collect and report it. The wealth of performance data
contrasts with the poverty of the theoretical and empirical justifications for per-
formance-reporting requirements. We have poor theories of performance infor-
mation use, largely informed by a combination of common sense, some deeply felt
assumptions about how government should operate, and a handful of success sto-
ries. The operating theory of performance management reform appears to hold
that it is an unambiguous benefit to governance, it should be adopted, and it will
foster smarter decisions that lead to better governance. The current theory of per-
formance information use might be characterized as “if you build it, they will
come.” It assumes that the availability and quality of performance data is not just
a necessary condition for use but also a sufficient one.

A Reform in Search of a Theory? Defining Performance
Management and Performance Budgeting

Given the range of guises that the performance management idea has appeared in,
it is helpful to start by explaining how performance management and performance
budgeting are defined in this book. I define performance management as a system
that generates performance information through strategic planning and perfor –
mance measurement routines and that connects this information to decision venues,
where, ideally, the information influences a range of possible decisions. Figure 1.1

An Era of Governance by Performance Management 5

represents a simple model of how a performance management system improves
governmental decision making and performance.

In this model performance information lifts the focus of managers from inputs
and processes to results. Performance management, through its production and
dissemination of high-level performance information, promises governmental ac-
tors common goals to pursue and an understanding of how present management
structures could be adjusted to pursue these goals, improving the ability to make
informed decisions about capacity. Performance information is the lifeblood of
the performance management model portrayed in figure 1.1. Performance man-
agement systems are designed to take information from the environment, through
consultation with the public, stakeholders, public representatives, and analyses of
the external environment in the strategic planning phase. Because the external en-
vironment is so large, public officials need some criterion of relevance to make
sense of it.4 Performance management systems provide a means by which public
officials engage in coding—interpreting and refining information from the exter-
nal environment and internal stakeholders into a series of information categories
such as strategic goals, objectives, performance measures, and targets. After this
coding takes place, performance information can then be presented to decision
makers.5 Performance information also provides a language for communicating

6 Chapter One

Based on stakeholder input
and previous performance, government
engages in results-oriented strategic
planning; goals have a clear purpose
and are communicated.

Government engages in
valid and accurate performance
measurement that reflects
progress toward results.
Measures are communicated.

Performance information is
communicated to employees, the
public, and specific decision venues
(including implementing strategic
goals, resource allocation,
policymaking, evaluation, performance
monitoring, performance improvement
efforts, benchmarking, capacity
improvements).

Figure 1.1 Integrating planning, measurement, and decision venues
Source: Adapted from Ingraham and Moynihan, “Beyond Measurement: Managing for Results
in State Government.”

with the external environment, transmitting strategic goals and performance mea –
sures via public documentation, speeches, websites, and other means.

Figure 1.1 also points to the linkage between strategic planning and perfor –
mance measurement, suggesting that effective performance management implies
the integrated use of both.6 Without the linkage, the potential for goal conflict,
confusion, and inaccurate measurement arises.7 Strategic planning without per-
formance measurement fails to link goals to actions or identify implementation is-
sues, failures that generate a lack of credibility among stakeholders.8 Performance
measurement without broader strategic guidance fosters measurement without a
sense of overall purpose; a technical exercise undertaken out of habit or adminis-
trative compliance, with little practical relevance for decision makers.

What is the purpose of all this activity? One justification for results-based re-
form is the accountability to the external environment and elected officials.9 How-
ever, public managers report that the more immediate rationale for results-based
reform is improved internal decision making and improved public performance.10

High-quality information, and the ability to communicate it to the right decision-
making venue in a useful and timely way, are as necessary to these interim objec-
tives as to the broader accountability purposes.11 The communication of
performance information is intended to act primarily as a stimulus to the decision-
making process—provoking, informing, and improving the quality of decisions.12

The budget process is perhaps the most visible and important decision venue
where performance information can be used. A strict definition of a performance
budget is “a budget that explicitly links each increment in resources to an increment
in outputs or other results.”13 This strict definition suggests an equally simple the-
ory of how performance budgeting should work. Once politicians decide what level
of performance they want and are willing to pay for, they fund accordingly. Pro-
grams that fail to perform will lose support relative to the superior claims of higher-
performing programs. The budgeting process, in effect, mimics the free market.
Agencies compete for resources and chase incentives to increase performance.

This theory of performance budgeting is beguiling in its simplicity and distant
from reality. Legislators are loath to link the budget decisions so tightly with any
one factor, since it reduces their discretion and would ignore other relevant aspects
of public programs. Paul Posner of the Government Accountability Office (GAO)
makes this point:

Performance budgeting is not about a mechanical link between performance
trends and budget decisions. If the program does poorly and it is a high prior-
ity, it doesn’t necessarily mean you are going to reduce funding. In fact, you
might find cause to increase funding. If the drug abuse deaths go up, you might
need to increase funding. This information needs to inform the agenda, the

An Era of Governance by Performance Management 7

questions you ask. It doesn’t necessarily tell you the answers on a budget deci-
sion because there are lots of other factors that are involved.14

If the strict definition of performance budgeting is undesirable and unrealistic,
then what about another definition? In practice, performance budgeting is usually
defined to suggest a loose connection between performance information and re-
source allocation without detailing how decision makers should use this informa-
tion. An example from Schick: “A performance budget is any budget that represents
information on what agencies have done or expect to do with the money provided
to them.”15 Such a definition is little different from the definition of performance
management supplied above, but markedly different from the strict definition of
performance budgeting.

Rethinking Performance Management

To rethink something means to challenge a dominant paradigm or set of assump-
tions and to look at it in a new light. Talbot, in reviewing the study of performance
management, writes: “As with many administrative arguments, for every doctrine
and its justification there are often counter-arguments and it is important to record
these. Perhaps surprisingly the academic critique of the ‘performance’ movement
has been relatively muted.”16 The sheer ubiquity of performance management re-
forms calls for a careful challenge to beliefs about performance management.

Some have started to make this challenge. An increasing literature has docu-
mented the potential for performance measures to create perverse behavior, in-
cluding goal displacement and gaming.17 This book is the third in a series that
Georgetown University Press has published on performance management. In 2006
Radin published Challenging the Performance Movement, and David Frederickson
and H. George Frederickson published Measuring the Performance of the Hollow
State.18 Each book has turned a critical eye on performance management, con-
tributing to what Radin calls “a new discussion about performance management
that integrates the issues of complexity.”19 Each book has its own perspective.
Radin draws from democratic theory to point to a basic tension between political
values and the values of performance management reforms, most notably the ten-
sion between the separation of powers designed into the U.S. political system and
the assumption of a single central actor that characterizes performance manage-
ment. Focusing on the federal level, she argues that performance management
techniques fail to incorporate concerns about equity and constitute a top-down
approach that excludes and demeans the professionals we rely on to implement our
public programs. Frederickson and Frederickson have mapped the complexities of

8 Chapter One

using performance regimes to govern the hollow state. At a time when more and
more government work is being performed by third parties, federal managers are
increasingly being held accountable to performance standards that are difficult to
exert on third parties.

This book joins the debate on the complexities of performance management,
but it does so in a number of ways that are different. I focus on understanding why
performance management reforms are adopted and how the nature of adoption af-
fects implementation. Radin has argued that performance management reforms
can become a “one-size-fits-all” approach, failing to reflect differences between
programs. Some functions are simply easier to measure and more suited to the de-
mands of performance management. I also argue that performance management
is more likely to succeed in some conditions than in others, focusing on other
agency-level variables such as leadership and resources to explain why.

To a greater extent than other treatments of performance management, I am in-
terested in how people interpret and use performance information. The main con-
ceptual contribution of the book is to propose an interactive dialogue model of
performance information use. The model examines how performance informa-
tion is socially constructed. Talbot points out that a social constructionist per-
spective has been largely absent in the literature of performance management. The
social constructionist view could lead to “the conclusion that such approaches
should be rejected out of hand or, more constructively, that this should lead to an
approach to performance based on dialogue.”20 This book pursues the latter ap-
proach, consistent with recent literature that has emphasized the role of dialogue
in the policy process.21 While performance measures suggest the irreducible ob-
jectivity of numbers, they are in fact ambiguous: selected, interpreted, and used by
actors in different ways consistent with their institutional interests. This model
suggests that a dialogue about performance across institutional interests will be
more likely to be marked by conflicting interpretations and disagreement than a
dialogue within an institution.

In this book I examine recent performance management reform at the federal
level and the state level. While most analyses of performance management tend to
focus on one level of government, the similarities between the state and federal lev-
els suggest the benefit of considering both when examining how performance man-
agement works. Both levels of government have the same basic political
institutions. In addition, both levels of government have embraced performance
management in very similar ways. Every state government has its own version of
the Government Performance and Results Act (GPRA), requiring that agency staff
collect and report performance information to a central budget office, usually as
part of the budget process. There is an active and ongoing interchange of reform
ideas between the state and federal levels, and innovation at the federal level in the

An Era of Governance by Performance Management 9

form of the PART program may become the next wave of reforms at the state level.
The key findings of the book—the reasons performance management is adopted
and used; the ambiguity and subjectivity of performance information; and the po-
tential for learning—do not depend on factors unique to the state or federal level.

Given the focus of the book on U.S. federal and state governments, the appli-
cation of findings to the local level or to other countries should be made carefully.
The adoption of performance management routines has been enthusiastically em-
braced by cities and countries around the world. Some of the basic theories pro-
posed here—such as why performance management is popular and how
performance information may be used—are not conditioned on any particular
political institutions or tendencies. So why might performance management be
different at the local level? One reason is the shorter distance between political of-
ficials, managers, and the actual services delivered. While federal and even state
governments deal with a broad array of services and deliver few services directly,
political leaders and managers at the local level have a much easier time connect-
ing performance information to the activities of frontline employees, and their
services are generally more visible to the public. This context makes it more likely
that performance management practices have a greater impact at the local level,
and research from the local level provides some support for this view.22

When comparing to other countries, differences in political institutions and the
nature of political-bureaucratic relations will create variation in the adoption and
use of performance management routines. One key difference is that the decen-
tralized nature of U.S. political institutions limits the ability of any single actor to
establish its own blueprint for a performance management model, define the mean-
ing of performance information, or determine how performance information is
used. Another difference is that the deep tradition of politicization of the bureau-
cracy in the form of political appointments seems to have discouraged U.S. gov-
ernments from dismantling civil service systems to the same degree as other
countries that have pursued performance management (see chapter 3). On the
whole, compared with the benchmark adopters of New Public Management
(NPM) reforms, the U.S. approach to performance management has not been es-
pecially loyal to any particular prescriptive theory in adoption or as rigorous in seek-
ing to link performance information to decisions in the implementation phase.

The dominant paradigm of performance management, what I refer to as per-
formance management doctrine, is explored in chapter 2. Performance management
doctrine is based on the logic that the creation, diffusion, and use of performance
information will foster better decision making in government, leading to dividends
in terms of political and public accountability, efficiency, and budget decisions.
Performance management doctrine also argues that liberating managers from tra-
ditional controls complements the creation of performance information.

10 Chapter One

Performance management doctrine promises to change the nature of account-
ability. For the public, performance information provides a transparent explana-
tion of how well the government is doing. For elected officials, performance
information provides a basis to reduce information asymmetry and exert oversight,
while goal-setting routines provide an additional basis to exert policy control.23

Case findings question the extent to which performance management is really used
for such accountability purposes.

In exchange for holding managers to higher standards of results-based ac-
countability, performance doctrine promises to give them greater freedoms to
achieve goals. In short, performance management doctrine calls for both a focus
on results and greater managerial flexibility. The doctrine does not anticipate that
performance information might remain unused or used in ways that run contrary
to an ideal of objective decision making. As becomes apparent in later chapters, this
means that many of the predicted benefits of performance management doctrine
do not materialize.

In contrast to the performance management doctrine, a more critical literature
points to problems with performance management and suggests it is destined to fail.
This critical perspective highlights the troubled history of performance manage-
ment efforts, especially efforts that sought to reorganize the budget process, such as
planning programming and budget systems in the 1960s and zero-based budgeting
in the 1970s. There are a number of logical reasons for these failures. One basic
problem is the issue of information overload. Wildavsky pointed out that perfor –
mance information systems produce mounds of information that no one particu-
larly cares about and that collectively is beyond the cognitive abilities of any
individual to process.24 Another criticism is that politics makes performance infor-
mation irrelevant. Strong political preferences make performance information un-
necessary. Relative to partisan goals, ideological biases, stakeholder pressure, and
constituent needs, performance data is not especially influential. In addition, per-
formance information does not help elected officials by making political decisions
simpler—indeed, it is an additional layer of information to incorporate.

Performance management reforms, frequently borrowed from the private sec-
tor or parliamentary systems, have been critiqued as incompatible with the sepa-
rated powers of the U.S. political institutions.25 Such reforms assume that the
executive branch is the critical decision maker in government. Legislators are un-
likely to accept any model of performance management that reduces their discre-
tionary power over goal setting and resource allocation.

Another criticism made of public management reforms in general is that they
are adopted for symbolic purposes that have little to do with actual performance.
Reforms have isomorphic tendencies and communicate political values but do lit-
tle else.26 This explains the repeated tendency to adopt similar reforms that have

An Era of Governance by Performance Management 11

not contributed much in the past.27 An extension of this argument is that because
of the symbolic value of reform, little thought will be given to making implemen-
tation of the reform possible. As public managers realize the passing and symbolic
nature of reforms, they respond with compliance and occasionally gaming of per-
formance regimes.28

Overall, this literature makes criticisms that remain valid. Evidence presented
in this book suggests that elected officials are rarely interested in performance in-
formation use. Performance management reforms are used as symbolic tools to ex-
press frustration with bureaucracy. Legislatures tend to regard performance
initiatives from the executive branch with suspicion, and public employees can be-
come cynical about the latest version of performance management.

Despite all these problems, I argue that performance management reforms can
change managerial behavior, and performance information will be used. This more
positive assessment is simply a function of looking for success in different places.
Joyce and Tompkins warn that many of the negative assessments of performance
reforms have come because of a focus on elected officials and on the budgeting
process.29 Most of the benefits of performance management reform that I observed
occurred at the agency levels, away from resource allocation decisions.

The Outline of the Book

The balance of this chapter provides a summary outline of the chapters that fol-
low and gives a sense of how performance management is reconsidered. Chapter
2 explains the claims of performance management doctrine in greater detail. The
success of the performance management doctrine is reflected in its widespread
adoption, which is examined in chapter 3. All state governments and the federal
government in the United States have devoted significant time, energy, and re-
sources to adopting performance management systems since the 1990s. In effect,
this has meant that governments have created reporting requirements for agencies
to produce performance information—which includes mission statements, strate-
gic goals, performance targets, and actual measurements of achievement. The Gov-
ernment Performance Project (GPP) graded these efforts in 1999 and 2001, and
in 2005 it graded both performance management efforts and aspects of informa-
tion technology in a revised category called information. The grades were based on
how consistently state governments met explicit and widely accepted public man-
agement criteria. Information was collected via a detailed survey completed by
state government officials, content analysis of public documentation, and inter-
views of state officials undertaken by journalists from Governing magazine. For
some aspects of the GPP, quantitative scales were developed based on survey re-

12 Chapter One

sponses and content analysis that informed the creation of grades, but the final
grade assessments represented a judgment of both quantitative and qualitative ev-
idence by the journalists and academics involved in the project.30 Table 1.1 pro-
vides these grades.

The data presented in chapter 3 offers a cross-state snapshot of what state gov-
ernments are doing. Evidence from content analysis finds that state governments
have actively established performance information systems by requiring agencies
to create and report on strategic goals and performance measures on a frequent
basis. While all state governments appear to produce some form of performance
information, the detail, nature, and availability of this information vary a good
deal. States have adopted reporting requirements without giving much attention
to the part of performance management doctrine that argues that a new focus on

An Era of Governance by Performance Management 13

Table 1.1 Government performance grades for managing for results and
information category

1999 2001 2005 1999 2001 2005
MFR MFR info. MFR MFR info.

State grade grade grade State grade grade grade

Alabama F D+ C Montana C C C
Alaska C- C- C Nebraska B- B- C+
Arizona B- C+ B- Nevada C C B-
Arkansas D C- C+ New Hampshire D+ D C-
California C- C- C New Jersey B- B- C
Colorado C C+ C+ New Mexico D+ C B
Connecticut D+ C- C- New York D+ C- C+
Delaware B B B North Carolina B- B C+
Florida B C+ B North Dakota D C- C
Georgia C+ B- B- Ohio C+ B C+
Hawaii C- C D Oklahoma D+ D C
Idaho C- C- C+ Oregon B+ B B
Illinois C B- C+ Pennsylvania B- B B
Indiana C B- C Rhode Island C C C+
Iowa B+ A- B South Carolina B- B B
Kansas C C+ B- South Dakota D D D
Kentucky B B+ B Tennessee C B- C+
Louisiana B B+ A- Texas B+ A- B
Maine C C+ C+ Utah B+ B+ A-
Maryland B- B C+ Vermont B- B B-
Massachusetts C C C+ Virginia A- A- A-
Michigan B B+ B+ Washington B+ A- A-
Minnesota B B B+ West Virginia C C C+
Mississippi C D+ C+ Wisconsin C C B-
Missouri A- A- A- Wyoming C C+ C

Source: Government Performance Project

performance should be accompanied with a relaxation of the traditional controls
that restrict managerial uses of human and financial resources. In effect, state gov-
ernments have adopted performance information systems proposed by perfor –
mance management doctrine, but they have neglected the managerial freedom
aspects. These cross-state findings give rise to a number of questions: Why are per-
formance management reforms so popular? Why are they being adopted in the
manner that they are, focusing on performance information systems but not man-
agerial autonomy? How is performance information used?

Answering these questions, or at least beginning to answer these questions, is
crucial to understanding how performance management initiatives work and their
prospects for success. To help rethink performance management, I employ exist-
ing theoretical approaches (the policymaking and implementation literatures) not
frequently used in the performance management literature and develop a new the-
ory on how performance information is used, a theory that I call the interactive di-
alogue model of performance information use.

Why Are Performance Management Reforms Adopted? Why Are They
Adopted in the Way that They Are?

Using theories from the policymaking literature, chapter 4 argues that the adop-
tion of formal performance management reforms is a function of the role of cen-
tral agencies in defining the reform and the motivation of elected officials selecting
the reform. The instrumental costs and benefits of reforms guide elected officials.
The adoption of performance management reforms is due to its symbolic value to
elected officials and professional value to central agency actors.

Performance management is attractive because it communicates to the public that
elected officials share their frustration with inefficient bureaucracies and are holding
them accountable, saving taxpayer money, and fostering better performance. These
symbolic benefits are useful on the campaign trail, especially for challengers who
promise to reform government. Once officials are elected, performance management
reforms are a logical policy option, providing at least the appearance of satisfying
campaign promises. Reforms can also be used to try to convince the public that the
government is being run efficiently and competently, making incumbents deserving
of reelection and the public purse deserving of taxpayer monies. Elected officials
might also perceive potential benefits in terms of policy control by using perfor –
mance information as a means of specifying goals and holding bureaucrats account-
able, but the case evidence offers few examples of elected officials using performance
management in this way.

Elected officials seek to minimize the costs of performance management doc-
trine. In practice, this means that governments have adopted performance-

14 Chapter One

reporting requirements for agencies, but they have ignored doctrinal arguments
for reducing traditional managerial controls. Reporting requirements impose few
costs for elected officials. They require little additional funds, and the burden falls
chiefly on the agency bureaucrats who collect and disseminate information. Elim-
inating traditional management controls over financial and human resources has
real costs. These traditional controls on bureaucracy are still valued, especially by
the legislature but also by public service unions concerned about the potential loss
of benefits to their members and possible abuses of power. Central agency actors,
who shape public management policy ideas, approve of additional reporting
mechanisms that fit with the budget process, but they are wary of loosening con-
trols they have historically been tasked with enforcing.

How Are Performance Management Reforms Used?

Consistent with previous criticisms of performance reforms, the case evidence sug-
gests the symbolic aspects of reform. However, the case evidence also suggests that
such reforms do not stop after adoption and that the symbolic nature of reforms is
not necessarily inconsistent with practical benefits. Even though U.S. governments
adopted reforms in a way inconsistent with performance management doctrine,
agency managers often have found ways to make these reforms generate positive
benefits, although not always in the ways predicted by performance management
doctrine.

Once the adopters of reforms have created an official reporting requirement, it
is up to agency managers to do something with it. Chapter 5 uses implementation
theory to understand what happens next. Agency options range from passive com-
pliance with the letter of requirements to active use of performance management
to bring about organizational changes. The use of performance management re-
forms at the agency level is a function of the formal reform adopted, agency lead-
ership motivation, managerial authority, and resources.

Given the symbolic motivations behind the adoption of reforms, we might ex-
pect that agency managers would be cynical about performance management.
There is cynicism, but agency leaders in the state governments I examined saw per-
formance management reforms as an opportunity to add value to their organiza-
tions in a variety of ways. Some of these benefits were consistent with performance
management doctrine—creating strategic clarity and improving managerial
processes. More frequently, benefits were not those specified by performance man-
agement doctrine—such as developing alternative strategic goals that essentially
rewrote policy, shaping the organizational culture, improving internal and external
communication, and fostering leadership development. Leaders pursued these ben-
efits trying to not only improve organizational performance, but also to improve the

An Era of Governance by Performance Management 15

capacity of the organization. Agency officials, like elected officials, consider the costs
and benefits of reforms, but they are more concerned about the instrumental ben-
efits to be leveraged from performance management. In doing so, each leader has
an agenda he or she wishes to pursue, informed and constrained by the organiza-
tional environment.

Leaders of the state agencies appeared to be the most important factor in the
implementation of performance management, but their ability to use reforms has
been shaped by their managerial authority. While these leaders gained no addi-
tional discretion with performance management reforms, they found ways to use
performance management within existing constraints. Resources are another im-
portant factor for implementation. Here, the case evidence points to the necessity
of adequate resources to enable performance management to work. The absence
of resources makes it difficult to provide the personnel to carefully collect, dis-
seminate, and consider data. Poorer agencies are also more likely to be reactive
rather than systematically fulfill a plan. Where managers are constantly battling
with unexpected crises that can be cured only by resources rather than strategic
thinking, performance management is little more than a distraction.

How Is Performance Information Used?

Performance management reforms rest on the assumption that once performance
information is made available, it will be widely used and result in better decisions
because it will foster consensus and make decision making more objective. But the
limited evidence of use does not match that model. Instead, it is consistent with
an interactive dialogue model of performance information use.

The interactive dialogue model argues that performance information is not ob-
jective and is selected and presented by advocates seeking to persuade others. Per-
formance information is presented and considered in written and oral texts—
reports, meetings, presentations, memos, appropriations bills, etc. These texts rep-
resent the goals of their authors and their efforts to use performance information to
bring others to their cause. How individuals perceive performance data will depend
on their individual background and beliefs and the institutional role they fill. Dif-
ferent actors can look at the performance information on the same program and dis-
agree on what the information means. This dissonance may simply be because they
select different data to talk about, consistent with their interests. It is also because
of the inherent ambiguity of most data, meaning that the same data can hold mul-
tiple meanings. Performance information tells us nothing about context and im-
plementation, factors that shape how we interpret whether a program is effective.
Performance information does not necessarily result in clearer decisions if the ac-
tors involved cannot agree on what it tells them about current performance, chang-

16 Chapter One

ing budgets, or management. As roles motivate the actors involved to understand
performance information differently, the inherent ambiguity in performance in-
formation will be exploited.

Chapters 6 through 9 develop the interactive dialogue model and offer examples
in different settings. Chapter 6 lays out the basic logic behind the interactive dia-
logue model and points to illustrative examples at the state level. In budget forums,
state agencies tend to select performance data that reflects a narrative they are seek-
ing to develop. The narrative generally argues that they are doing well with existing
resources and points to current and future needs. This is a familiar story in the
budget process, but now agency officials can use performance information in a way
consistent with this narrative. There are variations on the standard narrative. Agen-
cies strapped for resources are likely to point to the operational problems created by
a lack of cash. Agencies seeking to prompt policy changes will offer evidence of the
benefits of new programs versus old ones. The various actors involved in the policy
process can be expected to use performance information consistent with their in-
terests. Agency actors will contribute to the dialogue in ways that protect agency
preferences and budgets. Central agency officials will seek to assess the persuasive-
ness of different claims and emphasize performance data that reflects the interests
of the leader of the executive branch. Legislative committees will favor information
that helps their oversight of agencies and is useful in determining budget allocations.

Some of the distinctions I draw from the critical perspective derive from the in-
teractive dialogue model of performance information use. This perspective sug-
gests that actors do not suffer from information overload because they do not try
to process all information but select information that they find useful. At an agency
level, information overload is less of a problem because actors deal with a limited
number of programs. Agency managers select information that they can use to ad-
vocate to the external policy environment or to use for internal management im-
provements. The interactive dialogue perspective acknowledges that political
preferences will dominate decisions, but that does not mean that performance data
is not used. Even among actors with strong preexisting preferences, performance
information can be used to justify choices made and to convince others of those
choices. Advocacy does not fit into the performance management doctrine ideal
of performance information use, but it is still a use.

The Office of Management and Budget (OMB) under George W. Bush has
aimed to change the frequency and nature of performance dialogue at the federal
level. Chapter 7 presents recent performance management reform from the per-
spective of the OMB. Since the late 1990s federal agencies have faced the same
performance-reporting requirements as state agencies in the form of the Govern-
ment Performance and Results Act (GPRA). The Bush administration has argued
that GPRA is a failure, or at best, only the beginning of a coherent performance

An Era of Governance by Performance Management 17

management strategy. To this end, the OMB has required that agencies build their
congressional budget submissions around their annual performance plan. In addi-
tion, the OMB has started to assess program performance data using an evaluation
mechanism called the Program Assessment Rating Tool (PART), publishing sum-
mary assessments of program effectiveness alongside budget recommendations.

The changes pursued by the Bush administration aim to alter the performance
dialogue in a number of ways, explored in chapter 8. The OMB hopes that mem-
bers of Congress will become more comfortable in using performance data. Thus
far, many congressional appropriations subcommittees have complained that in-
formation on inputs and workload that they consider valuable is being lost in favor
of performance information they have little role in selecting and are not interested
in. The reaction to PART assessments has also been guarded. The interactive dia-
logue model points to the role of power in structuring dialogue; the PART expe-
rience illustrates the risk of such using power to dominate a dialogue. While the
OMB sees PART as transparent and systematic, others view it as subjective, re-
flecting the perspective of the OMB, the White House, and the Republican Party.

However, the PART process has forced a dialogue within the executive branch,
even if agencies have been suspicious of the process. PART provides a third-party
review of programs that offers a simple and clear summary opinion on whether the
program is effective. It increases the level of discussion about program performance
and forces agencies to meet a basic standard of evidence to show that their pro-
grams are working. The assessments occur on a regular basis and generate man-
agement recommendations that the OMB expects agencies to implement.

PART is also affecting budget discussions. The relationship between PART as-
sessment and budget recommendations is not strongly systematic, but thus far it ap-
pears to suggest that programs deemed ineffective or unable to demonstrate results
will have lower proposed budgets (which Congress could then choose to ignore).
The relationship between performance information and budget recommendations
is not systematic because of the additional information that must be considered
and because of the ambiguity of performance information itself. For many pro-
grams political preferences will override the assessments. The nature of the use of
performance information in public budgeting, therefore, does not resemble a ra-
tional one-best-way approach to decision making, where performance information
fosters consensus. Rather, it more closely resembles an interactive dialogue, where
different actors seek to persuade the others by using information that supports their
own arguments and by proposing alternate perspectives on the same information.

Even if two actors can agree on what performance means, performance infor-
mation does not tell us what to do next. The simplest example is a situation in
which a program performs poorly. One individual may read the information as
suggesting that the program is a failure, a waste of public money, and should be

18 Chapter One

eliminated. Another might look at the program and argue that it provides a valu-
able public service and would be more successful if given more resources. A third
individual might say that the program needs to be reorganized for better manage-
ment before any funding decisions can be made. Each option offers a logical in-
terpretation of the same piece of data.

Conflicting interpretations increase when a more diverse group of actors are in-
volved, but varying interpretations can occur even within an institution of ho-
mogenous individuals. Despite the best efforts of the OMB, budget examiners
have been found to interpret performance data differently and apply different stan-
dards for what constitutes acceptable evidence of effectiveness. Chapter 8 presents
the results of an experiment that further illustrates how ambiguity leads to multi-
ple interpretations. Graduate students in two public affairs programs served as sub-
jects in an experiment where they reanalyzed PART assessments and used logical
warrants to disagree with OMB evaluation and funding decisions. The subjects
were not motivated by a particular institutional role; they arrived at different con-
clusions due to the ambiguity of the performance data.

A dialogue about performance can also occur within agencies. Because agency
actors are more homogenous and share a focus on implementation, there is greater
potential for generating agreement on the meaning of performance data and for
building a shared narrative that becomes part of the organizational culture. In this
setting politics is less likely to disrupt the use or splinter the meaning of perfor mance
information. Dialogue about performance can also foster learning opportunities,
which are examined in chapter 9. This learning can come in a variety of forms,
whether it is learning to change existing organizational processes for the purposes
of performance improvement, learning ways to improve organizational capacity, or
challenging the basic underlying goals of the organization. The prospects for dia-
logue to foster learning improve when organizations create learning forums. Learn-
ing forums are routines that encourage actors to closely examine information,
consider its significance, and decide how it will affect future action. Learning also
improves when these forums include a variety of perspectives, dialogue is based on
an equal footing among participants, and different types of knowledge are em-
ployed. These conditions challenge some basic practices within hierarchies—man-
agers are not used to stopping to examine performance information, nor are they
used to setting aside status differences and treating views from different parts of the
organization with equal respect. However, the simple supply of performance data
does not create its own demand for use, and the most critical challenge facing agen-
cies is to find ways to encourage managers to examine performance information and
then use their collective knowledge to improve how they run agencies.

Chapter 10 concludes the book by summarizing some lessons that emerge from
rethinking performance management. In doing so, it is hard not to conclude that

An Era of Governance by Performance Management 19

our expectations of performance management are at a turning point. Across state
governments and at the federal level, there exists an unprecedented machinery to
create and disseminate performance information. The creation of this machinery
was based on lofty expectations and unrealistic assumptions about the ease of chang-
ing existing patterns of decision making. Governments can offer anecdotal evidence
that they occasionally use performance data, but few are willing to say that it is used
systematically. As the shortcomings of performance management doctrine become
apparent, a reevaluation is necessary. Examined alongside the promises of perfor –
mance management doctrine, actual achievement appears relatively modest.

Rethinking performance management means acknowledging this shortfall, as
well as acknowledging that inflated expectations set the reform up for failure. A bet-
ter understanding of why these reforms are adopted, and what incentives agency
managers have to implement reform, is a good starting point. A more credible un-
derstanding of how performance information shapes decision making, as offered by
the interactive dialogue model, is crucial. These theoretical advances suggest the
need for a more modest set of expectations about the contribution of performance
management reforms to management and budgeting. Using these standards, even
if performance data does enter the dialogue that public managers engage in, it must
compete with other factors that influence the decision and will be used according
to the interests and interpretations of the different actors involved in a decision. It
will not make decision making any easier. Since performance information is am-
biguous, it will be one additional piece of contested information that enters the
policy process.

This understanding of performance management is a far cry from the model
presented in performance management doctrine, which suggests that performance
information is the key to unlocking government accountability and effectiveness.
But this book also challenges a negative view that suggests performance informa-
tion is never used, that it is incidental to decisions, and that the management of
that information is entirely symbolic. Performance information may not dominate
decisions, but it is increasingly present in the dialogue that leads to decisions.
While there is certainly a symbolic aspect in how performance management re-
forms are adopted, the implementation of these reforms and the use of perfor –
mance information are driven by instrumental concerns.

Data Collection

Assessing the era of governance by performance management requires in-depth
analysis of how the political and managerial processes relevant to performance
management work and interact and are strengthened if done on a comparative

20 Chapter One

basis. It is therefore worth briefly discussing the data collected for this book. The
book rests on a multimethod effort to understand the creation and use of per-
formance management reforms. Data was collected using close-ended and open-
ended surveys, interviews, experiments, and content analysis. These methods and
their applications in the book are highlighted in table 1.2.

The data collected was designed to help answer the questions central to the
book: Did the adoption of performance management reform in state government
actually follow the recommendations of performance management doctrine? What
are the motivations behind performance management adoption? How and why are
performance management reforms actually implemented at the agency level? How
do public actors use performance information? Table 1.2 summarizes each data
source and where it is used in the book.

To understand whether actual performance management adoption followed
the recommendations of performance management doctrine, I drew data from the
first two rounds of the Government Performance Project undertaken at the
Maxwell School at Syracuse University. State governments provided in-depth de-
scriptions of performance management systems and their uses, and GPP staff ex-
amined public documentation to verify these claims. In particular, the GPP
undertook content analysis of strategic plans, budgets, and performance reports to
assess the range of performance information available and created measures of

An Era of Governance by Performance Management 21

Table 1.2 Data Sources

Data source Use in chapter

Government Performance Project 2000 cross-state surveys of performance
management, financial management, and human resource systems. 2, 3

Cross-state content analysis of state strategic plans, state performance reports,
budget documents, and agency strategic plans and performance reports. 3

Case study analysis of Alabama, Vermont, and Virginia, based on document
and interview analysis. Interviews of state budget officials and Department
of Corrections senior and line managers. All interviews transcribed. Interview
transcripts and state documents coded using qualitative software. 4, 5, 6, 9

Case study of the development and application of the Program Assessment
Rating Tool at the federal level. Based on document analysis and interviews
of officials in the Office of Management and Budget and the Government
Accountability Office. 7, 8, 9

Content analysis of legislative discussion of performance at the federal level. 7

Experiment with graduate students in public affairs to examine the ambiguity
of performance information. 8

state-by-state managerial autonomy based on survey responses. This information
is reported in chapter 3.

The cross-state picture shows how performance management reforms were
adopted, and this information naturally leads to the questions of why they were
adopted in the way that they were and how they were implemented. I sought to
answer these questions using in-depth case studies of performance management ef-
forts in three states (Alabama, Virginia, and Vermont) and from current efforts at
the federal level. Seeking to maximize theoretical replication and avoid the ten-
dency of best-practice research to generalize from high performers, states were se-
lected for study according to their fit with high (Virginia), medium (Vermont),
and low (Alabama) categories of experience and competence in performance man-
agement.31 The selection was consistent with the GPP grades that each state has
received for its performance management activities.

The state government evidence on adoption is featured in chapter 4. State gov-
ernment evidence on performance management implementation is featured in
chapters 5 and 9. To examine implementation, I controlled for function by focus-
ing on the corrections system in all three states, a large but understudied function
in public management.32 Corrections incorporates a wide range of services—incar-
ceration, education, creating behavioral change, custodial care, the production of
goods and services—and is therefore representative of different agency types.33 I
visited each state to undertake in-depth interviews of the key participants in the per-
formance management process: (a) operational managers in correctional institu-
tions, (b) senior managers at the Department of Corrections (DOC), and (c)
managers in the state management and budget office. This sampling technique is
useful in discovering variation in the views of members of different parts of the
same organization.34 In addition, to gain the views of political and career officials,
my interview pool included a mix of appointees and career staff at both the
statewide and agency level. I developed a key informant in each pool of interviewees
and used a snowball method of sampling the additional interviewees, some of whom
were interviewed multiple times. Interviews were semistructured, based on a stan-
dard interview protocol and probes (see appendix A for the interview protocol).35

In addition to the cross-state data and the three state case studies, I also exam-
ined the status of performance management at the federal level, focusing on the
Bush administration initiative to evaluate the performance of all federal programs
and to make agency budget submissions more performance oriented. These ef-
forts provide a fascinating case study of the creation of a performance management
reform, illustrating the difficulties involved when a budget office seeks to develop
a performance-focused budget process and a centralized mechanism to assess
agency performance. I studied these changes by interviewing federal officials, par-
ticularly those in the OMB who were involved in creating and implementing these

22 Chapter One

reforms and legislative actors overseeing the reform.36 The discussion of the adop-
tion and early experience of these reforms is examined in chapters 7 and 8.

The final key question I pursued is how people interpret and use performance
information. To examine this question I relied on a variety of approaches. I had
asked my state and federal interviewees how and when they used information, and
I looked for examples of use. I also wanted to understand how legislators used per-
formance information in public decision venues. I therefore undertook a content
analysis of congressional discussion of performance in appropriations bills and
hearings. This data is presented in chapter 7. Much of the evidence on the use of
performance information pointed to the influence of institutional perspectives. I
wanted to understand if actors would still disagree about performance information
even without institutional affiliation. Using graduate students from two public af-
fairs programs, I undertook an experiment to examine the degree of ambiguity as-
sociated with performance information. This data is presented in chapter 8.

As with any empirical evidence, generalizations should be made with caution.
The state research focused primarily on corrections, and it is also important to
note that each state has its own particular history and culture that affect governance
outcomes. I describe such basic state differences in appendix B.

Conclusion

This book offers some new perspectives on performance management. While not
claiming to be a complete account, it challenges existing thinking and points to
ways to gain a more complete understanding of whether performance manage-
ment has been worthwhile.

Performance management is not (and cannot possibly become) the solution to
governmental problems that its advocates promise, but it has benefits that offer
clues to how a more effective version of performance management might work. If
decades of results-based reform have not lived up to expectations, this is partly be-
cause the expectations were unrealistically high: Elected officials and senior bu-
reaucrats would have to change how they make decisions, citizens would have to
become avid consumers of performance data, and public managers would have to
run public organizations differently. These changes require a different system of
governance, not just management changes.

This book focuses primarily on public managers because these are the most likely
users of performance information and the best hope for the performance manage-
ment movement. In most respects, public managers are not driven by performance
data in the ways predicted by performance management doctrine, but managers will
occasionally use results-based reforms to add value to their organizations. The

An Era of Governance by Performance Management 23

following chapters identify the logic behind this limited use of performance man-
agement as a basis for rethinking how results-based reforms might be implemented
in the future, focusing in particular on how performance information changes the
dialogue of governance.

Notes

1. Mosher, Democracy and the Public Service.
2. Ingraham and Moynihan, “Evolving Dimensions of Performance.”
3. Radin, “The Government Performance and Results Act (GPRA): Hydra-Headed Mon-

ster or Flexible Management Tool?”
4. Gawthrop, Public Sector Management: Systems and Ethics, 45.
5. Katz and Kahn, The Social Psychology of Organizations.
6. On the risks of a separation between planning and management, see Ansoff, Declerck,

and Hayes, eds., From Strategic Planning to Strategic Management; Toft, “Synoptic (One Best
Way) Approaches to Strategic Management.”

7. Heinrich, “Do Government Bureaucrats Make Effective Use of Performance Manage-
ment Information?”

8. Wildavsky, “If Planning Is Everything, Maybe It’s Nothing.”
9. Gormley and Weimer, Organizational Report Cards.

10. Melkers and Willoughby, “Budgeters’ Views of State Performance-Budgeting Systems.”
11. Macintosh, Management Accounting and Control Systems.
12. Scott, “Organization Theory: An Overview and an Appraisal.”
13. Schick, “The Performing State,” 101.
14. Subcommittee on Government Efficiency and Financial Management, Should We PART

Ways with GPRA, 66.
15. Schick, “The Performing State.”
16. Talbot, “Performance Management,” 502.
17. Talbot, “Executive Agencies”; Hood, “Gaming in Targetworld”; van Thiel and Leeuw,

“The Performance Paradox.”
18. Radin, Challenging the Performance Movement; Frederickson and Frederickson, Measur-

ing the Performance of the Hollow State.
19. Radin, Challenging the Performance Movement, 10.
20. Talbot, “Performance Management,” 510.
21. For example, see Fischer and Forrester, eds., The Argumentative Turn in Policy Analysis

and Planning; Majone, Evidence, Argument, and Persuasion in the Policy Process.
22. Ammons, “Raising the Performance Bar Locally”; Andrews and Moynihan, “Why Re-

forms Don’t Always Have to Work to Succeed”; deHaven-Smith and Jenne, “Management by
Inquiry”; Edwards and Thomas, “Developing a Municipal Performance-Measurement System”;
Melkers and Willoughby, “Models of Performance-Measurement Use in Local Governments”;
Poister and Streib, “Elements of Strategic Planning and Management in Municipal Govern-

24 Chapter One

ment”; Tat-Kei Ho, “Accounting for the Value of Performance Measurement”; Wang, “Perfor-
mance Measurement in Budgeting.”

23. It should be noted that the understanding of accountability in performance management
doctrine is relatively limited since it largely overlooks the positive aspects of rules-based ac-
countability and neglects other approaches, such as political, legal, or professional norms. See
Romzek and Dubnick, “Accountability in the Public Sector.”

24. Wildavsky, Budgeting: A Comparative Theory of Budgeting Processes.
25. Radin, “The Government Performance and Results Act and the Tradition of Federal

Management Reform.”
26. On the symbolic nature of public sector reform in general, see DiMaggio and Powell, “The

Iron Cage Revisited,” and March and Olsen, “Organizing Political Life.” On performance man-
agement in particular, see Roy and Seguin, “The Institutionalization of Efficiency-Oriented Ap-
proaches,” and Carlin and Guthrie, “Accrual Output—Based Budgeting Systems in Australia.”

27. Downs and Larkey, The Search for Government Efficiency.
28. Van Thiel and Leeuw, “The Performance Paradox.”
29. Joyce and Tompkins, “Using Performance Information for Budgeting.”
30. More detail on the GPP criteria, the information collected by the project, and the process

of grade allocation can be found in Ingraham (ed.), In Pursuit of Performance.
31. On theoretical replication, see Yin, Case Study Research, 2nd ed. On best practice research,

see Overman and Boyd, “Best Practice Research.”
32. DiIulio, Governing Prisons.
33. Wilson, Bureaucracy.
34. Ban, How Do Public Managers Manage?
35. Responses were recorded, transcribed, and stored in QSR NUDIST, a software program

designed for qualitative research. QSR NUDIST allows analysis of data using a hierarchical cod-
ing system. The software is flexible enough to allow both inductive and deductive coding and
modification of the coding structure to facilitate the interplay of ideas and evidence. As codes
are established, the definition of each code may be attached, as well as memos on the emerging
trends that are associated with a particular code. The software is therefore ideal for the type of
research undertaken here, allowing the creation of broad codes that facilitate descriptive case in-
formation, deductive codes based on predicted benefits of performance management, and in-
ductive codes emerging from case evidence.

36. I interviewed ten staff members at the OMB. Interviewees were a mixture of political ap-
pointees and career officials. The group included those who had worked directly on the Program
Evaluation Team that designed and modified the original PART questionnaire, managers with
responsibility for overseeing the implementation of PART, and budget examiners who have used
the tool. In addition, I interviewed seven members of the GAO and Congressional Research
Service who oversee federal budgeting and performance management issues for Congress. The
interviews were largely conducted in person in May of 2005, although a couple of interviews
took place via phone at a later date.

An Era of Governance by Performance Management 25

2
Performance Management as Doctrine

What does performance management actually mean, and what does it hope to
achieve? This chapter examines the basic claims made in performance manage-
ment doctrine. These claims serve as a theoretical standard against which evidence
on the actual implementation of performance management and alternative theo-
ries can be compared. The key claim that applies to government organizations is
that two mutually dependent reforms should be adopted: Managers should be
given more flexibility in human resources and budgeting matters but held ac-
countable by quantitative performance standards.

One of the defining tensions of the intellectual development of public adminis-
tration is between the field as a social science and as a professional activity under-
taken in a highly politicized environment. Frequently, decisions on running public
organizations are made on the basis of what Hood and Jackson have described as
“administrative arguments” or “doctrines.”1 Such doctrines are ideally suited to pol-
icy choices in a political context. Doctrines are a theoretical explanation of cause and
effect, often presented as factual and widely applicable. Doctrines are designed to
prompt actions consistent with this explanation. Proponents of public administra-
tion based on social science have exposed such doctrines as contradictory.2 Yet this
style of argumentation persists, and the history of public administration is replete
with examples of management doctrines, often of a very similar nature.3 As these
doctrinal arguments find supporters, they become movements that seek to reform
government. This persistence is due, in part, to the demand-driven nature of pub-
lic sector reform. Practitioners and elected officials constantly seek suggestions on
improving public organizations, and they rarely differentiate between knowledge
derived from social science and plausible argument.4

Performance management closely fits the categorization of management doc-
trine, employing many of the rhetorical tools of administrative argument.5 Per-
formance management doctrine gives a sense of symmetry by offering generic

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solutions to the perceived weaknesses of traditional public organizations. This doc-
trine also offers a prescriptive theory of cause and effect for how public organiza-
tions should be run, resulting in a series of policy options that demand
implementation. Traditional public organizations are portrayed as inefficient and
ineffective, focused on maximizing inputs and rendering compliance. Existing man-
agement systems are to blame for the undesirable state of public organizations. The
doctrine promises a more efficient, effective, results-driven public sector.

The credibility of doctrinal claims relies on the credibility of the warrants that
underlie these claims.6 The doctrine of performance management draws from a
number of schools of thought, most notably New Public Management (NPM),
but also strategic management and management accounting and control. Per-
formance management doctrine is also closely intertwined with political rhetoric
on the state of government and the underlying assumption that the public sector
can be made more efficient and effective.

The Doctrine of Performance Management

Some basic assumptions are associated with the doctrine of performance manage-
ment:

• Government is inefficient.
• Government can transform itself to become more efficient.
• The poor performance of government is of major consequence in terms of

fiscal health and public trust in government.
• Government can and should make more rational decisions.
• Performance information will improve decisions and can be used to foster

accountability.

Explicitly or implicitly these assumptions underlie every speech a politician
gives calling for results-oriented government and every proposal that reformers de-
sign to the same end. Setting aside the question of whether such broad assump-
tions are accurate for all, or even most public agencies, these assumptions are
entrenched and widely accepted by those who seek to reform government. For in-
stance, let us look at the Findings and Purposes section (see box 2.1) of the federal
Government Performance and Results Act (GPRA), which enjoyed bipartisan sup-
port and became the model of performance management for state governments.

Like many of our attitudes about governments, the assumptions reflected in the
text of GPRA are tenaciously held, though uninformed by a systematic assessment
of evidence. They operate at the level of faith or belief, rather than knowledge or

Performance Management as Doctrine 27

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understanding. This makes them all the more powerful since they are difficult to
refute on the basis of evidence. The reformist ethic that emerges from these beliefs
is almost immune to evidence that reform efforts consistently fail, therefore en-
couraging round after round of performance management reforms.7

That such assumptions have the status of belief does not mean they are discon-
nected from ideas or theories. Scholarship and practitioner claims on performance
management make a series of claims that allow us to better understand the per-
formance management doctrine. These claims offer a simplified narrative about
the problems associated with traditional public organizations, the remedies
needed, and what these remedies will bring about. Depending on the source do-
mains of these claims, there is some variation between the doctrine presented but
not a great deal. We will examine these claims in turn.

Claims about Traditional Public Management Organizations

The doctrinal claims about traditional public organizations might be summarized
as follows. Traditional public management systems provide only certain types of

28 Chapter Two

Box 2.1 Government Performance and Results Act, section 2

(a) Findings. —The Congress finds that —
(1) waste and inefficiency in Federal programs undermine the confidence of the Amer-

ican people in the Government and reduces the Federal Government’s ability to
address adequately vital public needs;

(2) Federal managers are seriously disadvantaged in their efforts to improve program
efficiency and effectiveness, because of insufficient articulation of program goals
and inadequate information on program performance; and

(3) congressional policymaking, spending decisions and program oversight are seri-
ously handicapped by insufficient attention to program performance and results.

(b) Purposes. — The purposes of this Act are to —
(1) improve the confidence of the American people in the capability of the Federal

Government, by systematically holding Federal agencies accountable for achieving
program results;

(2) initiate program performance reform with a series of pilot projects in setting pro-
gram goals, measuring program performance against those goals, and reporting
publicly on their progress;

(3) improve Federal program effectiveness and public accountability by promoting a
new focus on results, service quality, and customer satisfaction;

(4) help Federal managers improve service delivery, by requiring that they plan for
meeting program objectives and by providing them with information about pro-
gram results and service quality;

(5) improve congressional decisionmaking by providing more objective information
on achieving statutory objectives, and on the relative effectiveness and efficiency of
Federal programs and spending; and

(6) improve internal management of the Federal Government.

Source: Congressional Record

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information that act to discourage efficiency. Managers have weak incentives to
focus on performance, and they lack the basic goals and data that would focus
their attention there. Instead, managers are provided with a list of inputs—bud-
geted appropriations—that they are obliged to spend on. Financial controls are
centered on controlling these inputs, ensuring that money is spent for the purpose
for which it is allocated. Managers lack the discretion to reallocate the money they
have been allocated, even if it could mean more effective and efficient achievement
of goals. Personnel controls reinforce financial controls, restricting the ability of the
manager to make decisions about human resources.

Public managers are essentially inwardly focused, concerned with rule compli-
ance rather than goal compliance and short-term issues.8 Koteen links this nonfo-
cus on results to the rigidity of existing public management systems: “Government
and other nonprofit processes too often focus on observing proper and uniform
procedure rather than achieving results . . . the focus is on input, not output.”9

In any case there are no personal or organizational incentives to deviate from ex-
isting controls toward more efficient performance. Instead, disincentives exist. Sav-
ings made because of efficient budget execution will not be retained by the agency,
but reappropriated to the entire government. In making budget proposals, agency
administrators are likely to seek more than they need to cover costs and then spend
down what money remains before the end of the budget cycle to avoid losing un-
spent appropriations and receiving lower allocations in the future. The definition
of accountability underpinning these control systems is legal compliance, probity,
and error avoidance, not goal achievement, technical efficiency, or program effec-
tiveness.10 Informal systems, reflected in organizational cultural artifacts of language
and symbols, reinforce these values.11 In short, the public sector seeks management
expertise but curbs the use of discretion through both formal management controls
and the informal culture that develops around those controls.

Claims about Changes Required: Building Performance
Information Systems

Given the critiques of the traditional management systems, what does performance
management doctrine tell us about changing these systems? Moving from an ad-
ministrative culture of compliance, error avoidance, and presumed inefficiency to
a more efficient and effective public service requires multiple changes to existing
formal systems. The first is to create a performance information system. The cre-
ation of performance information is not a new innovation, with performance
measurement in U.S. public management at least a century old.12 From this per-
spective, what makes performance management conceptually distinct from sim-
ple performance measurement is the effort to link measurement with strategic

Performance Management as Doctrine 29

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planning into a single connected system, illustrated in figure 1.1. Administrative
goals should be specified through some sort of formal strategic planning. Short-
term strategic goals are intended to be consistent with longer-term strategic plans
for the organization. These short-term goals form the basis of a performance con-
tract agreement between elected officials and senior administrators. Goals are de-
fined in measurable terms, with ex-post performance compared with ex-ante
targets. Administrators face responsibility for achieving performance goals and are
rewarded accordingly. Applying strategic planning will direct attention to results,
the external environment, and the needs of stakeholders. Resource allocation will
become more strategic and made on a longer-time planning horizon. Strategic
goals provide standards for excellence and a basis for control and evaluation.

Figure 1.1 represents a simple model of how a performance management sys-
tem improves governmental decision making and performance. Evidence from
American state governments suggests wide acceptance (if not always actual imple-
mentation) of this model. In reporting to the Government Performance Project,
states repeatedly emphasized strategic planning and performance measurement as
related activities intended to feed into multiple decision venues and improved
quality of decisions. Virginia, for example, described its Performance Management
System as “comprised of four, linked processes: strategic planning, performance
measurement, program evaluation, and performance budgeting . . . these processes
are designed to work together to manage the performance of state government.”
Florida explained its Performance Accountability System as the “framework to en-
sure the critical link is maintained between the strategic plan, budget, and per-
formance measures.” Louisiana’s management processes move from “planning to
budgeting to implementation to evaluation (or accountability), back to planning
and so on. All processes are linked; each builds upon the one that precedes it and
contributes to the one that follows. No matter where you enter the circle, you will
eventually move through all the processes.” Texas described its system as “an inte-
grated comprehensive system of statewide and agency strategic planning, per-
formance measurement, performance-based budgeting, and performance
reporting, assessment, evaluation and auditing.”

States with more limited experience in performance management do not seem
any less in pursuit of the model illustrated in figure 1.1, simply less far along the
road to implementing it. For example, Alabama described its system in ways sim-
ilar to other states. Its Strategic Plan and Performance Measurement System “con-
nects the strategic goals to specific actions and performance measures by the
agencies” and “communicates strategic objectives clearly, links objectives to an-
nual budgets, provides a common methodology and framework for all agency per-
formance efforts.” The state of Washington illustrates the desire to link
performance data with decision venues: “What we are trying to achieve in Wash-

30 Chapter Two

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ington is a system whereby all types of decisions are routinely informed by per-
formance and planning information, in addition to traditional factors, such as
competing priorities, organizational capacity, financial reality, and stakeholder and
public opinion.”

Claims about Changes Required: Managerial Authority

If the first recommendation of performance management doctrine is to build a per-
formance information system, the second is to encourage its use through expand-
ing the zone of managerial authority. This second aspect of the performance
management doctrine is frequently absent from older treatments of performance
management, such as calls for performance budgeting in the 1949 Hoover Com-
mission, more technical treatments of how to foster performance management, or
private sector treatments of performance management that assume private sector
levels of managerial discretion.13 But this claim is present in more recent treat-
ments of public management, particularly the NPM.14 The essential underlying
logic of this claim is that the constraints imposed by traditional public organiza-
tions have limited the ability of managers to make positive changes. Even if they
have perfect information about their operations and have a strong desire to bring
about performance improvement, their ability to reorganize human and fiscal re-
sources is limited by traditional managerial controls. Should such controls on in-
puts be relaxed in favor of controls on outputs, managers will be more likely to
perform better.

Financial management and human resource systems in the NPM benchmark
countries—the United Kingdom, New Zealand, and Australia—were significantly
decentralized to achieve this increase in managerial authority.15 In line with the
contractual approach, administrative motivation was based on clear responsibility
and linking achievement of goals to monetary incentives and job security. This tac-
tic required the elimination of centralized civil service rules regarding tenure, pro-
motion, and pay. Managers were given similar employer authority as private sector
counterparts. Appropriations, the price tag for the services agreed upon in the per-
formance contract, were aggregated. The main limitation on management use of
resources was therefore the size of the appropriation, not specific line items. Man-
agers were also allowed to maintain unspent funds to eliminate the incentive for
end-of-year spending.

Schick’s summary of NPM ideas illustrates the central focus of reform ideas on
performance improvement, which is assumed to occur when

• managers have clear goals, with results measured against these goals.
• managers are given flexibility in using resources.

Performance Management as Doctrine 31

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• operational authority is devolved from central agencies and agency HQ to
operating levels and units.

• government decisions and controls focus on outputs and outcomes rather
than on inputs and procedures.

• managers are held accountable for the use of resources and the results
produced.16

Schick’s characterization of NPM ideas is interactive, illustrating how NPM
ideas depend on one another to work and are not simply a menu of independent
prescriptions. Flexibility and operational authority are increased in return for an
accountability based on results.

These NPM arguments are inherent to performance management doctrine. Per-
formance management doctrine views managerial authority and the existence of per-
formance information that provides a focus on results as the two key variables that
shape management systems. The different configurations of these two variables are
illustrated in figure 2.1. Performance management doctrine interprets the history of
public management as a gradual and logical transition from prebureaucratic spoils
systems (box 1) to bureaucratic systems (box 2) to performance-oriented systems
(box 3). Box 4 represents a constrained performance system, where managers have
limited authority but are expected to produce results. Chapter 3 will argue that this
configuration is closest to the reality that public managers in the United States face.
For the moment, however, we will focus on the other boxes in figure 2.1, since they
represent the logic of performance management doctrine.

Prebureaucratic systems are represented in box 1 of figure 2.1. In this configu-
ration, the combination of high levels of managerial authority with lack of a focus
on results creates the potential for public officials to usurp the power of public or-
ganizations for noneffective goals such as maintaining political power; rewarding
political supporters, friends, and relatives, or personal enrichment. The spoils sys-
tem in U.S. government exemplified such characteristics. The spoils system was re-
sponded to by the introduction of rules that limited how public officials could use
their human and financial resources. By limiting managerial authority, govern-
ments created traditional bureaucracies, as represented by box 2 of figure 2.1.

According to performance management doctrine, two shortcomings of the bu-
reaucratic model are that managers still lack a focus on effectiveness and lack the
authority to improve service provision. Therefore, performance management doc-
trine argues that the next stage is to replace controls over inputs or process with
managerial authority while developing performance information systems that can
be used to hold managers accountable for results. This performance management
ideal-type is represented by box 3 of figure 2.1. In such a system, the part of the
organization with primary responsibility for a goal is identified.17 This identifica-

32 Chapter Two

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tion helps match incentives to authority and program knowledge to responsibil-
ity. Diagnostic control systems capable of measuring results and ensuring goal con-
gruence between different levels of goals become critical. These systems leave it up
to employees to figure out how to juggle inputs and processes to achieve the out-
puts the system requires.18 Thompson argues that the major difference between the
private sector benchmark organizations promoted by the NPM and public organ-
izations is the nature of the control system.19 Control systems of successful private
organizations are primarily built to facilitate the achievement of results. Avoid-
ance of error or malfeasance is of secondary consideration. The opposite is true in
the public sector. A comparison of budgets is illustrative:

Operational budgets in the federal government are highly detailed spending or
resources-acquisition plans that must be scrupulously executed just as they were
approved. In contrast, operating budgets in benchmark organizations are re-
markably sparing of detail, often consisting of not more than a handful of quan-
titative performance standards. This difference reflects the efforts made by the
benchmark organizations to delegate authority and responsibility down into the
organization. Delegation of authority means giving departmental managers the
maximum feasible authority needed to make their units productive or, in the al-
ternative, subjecting them to a minimum of constraints.20

The goal for benchmark organizations is to make operational budgeting into a
form of responsibility budgeting, where a manager is responsible for achieving a cer-
tain performance standard or standards. In contrast, public budgeting emphasizes

Performance Management as Doctrine 33

Figure 2.1 How managerial authority and focus on results create different
management systems

High
managerial
authority

Low
managerial
authority

Low focus on results

Box 1. Prebureaucratic systems
Focus on goals other than
performance or rule probity
(political spoils, personal
enrichment).

Box 2: Bureaucratic systems
High focus on inputs and little
incentive or authority to increase
technical efficiency.

High focus on results

Box 3: Performance management
ideal-type
Managers have clear goals and authority
to achieve goals. This should lead to
program effectiveness, higher technical
efficiency, and results-based
accountability.

Box 4: Constrained performance
system
Demand for results, but managers lack
authority to engineer change, limiting
performance improvement and results-
based accountability.

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the use of inputs rather than the achievement of results: In other words, operating
managers have no authority to acquire or use assets. But without authority, they can-
not properly be held responsible for the performance of the administrative units
they nominally head.21

NPM ideas were sometimes repackaged by U.S. public management writers,
most commonly as “reinvention” or as reforms to the budgeting process but with
the same recommendations for performance management. For instance, Osborne
and Gaebler’s widely read manifesto for government reform, Reinventing Govern-
ment, employs NPM principles:

• Steering Rather Than Rowing: This claim suggests that the public actors
who set goals (elected officials or those who work most closely with them,
political appointees, or central agency actors) should not be the ones
implementing these goals. Critical to this claim is the assumption that
government priorities should and can be set in terms of strategic goals,
with measures of those goals sufficiently clear that they can be used to
manage other actors implementing goals. This assumption is also clear in
other reinvention prescriptions such as the call to inject competition into
service delivery, even within quasi-market settings where public
organizations are competing with the private sector or each other.

• Transforming Rule-Driven Organizations: Osborne and Gaebler see public
organizations as traditionally focused on compliance with rules and on the
amount of resources they receive. They call for organizations and
employees to be guided by organizational mission and goals rather than
rules or budgets, requiring an increase in managerial flexibility and
discretion to align mission with actions, elimination of rules that prevent
alignment of mission and behavior, and the use of mission and strategic
goals to motivate employees rather than rule compliance.

• Funding Outcomes, Not Inputs: To encourage a focus on the goals of an
organization, budgeting and other systems of monetary reward, including
pay or bonuses, should be linked to performance.

• From Hierarchy to Participation and Teamwork: Traditional bureaucracies
are too hierarchical, removing decision-making power from those with a
close knowledge of management problems and processes. Decision making
needs to be decentralized in a way that provides substantially more
discretion in the hands of managers.22

Clearly, the above principles call for strategic planning and performance meas-
urement, which act as a means by which to set organizational goals, as well as mo-
tivate, judge, and reward performance. The need for increased managerial authority

34 Chapter Two

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is reflected in the calls for employee flexibility, more decentralized decision making,
and less reliance on formal rules. The benefits claimed of this increased authority
will be improved performance as employees make better-informed decisions and
reengineer existing management processes.

The Promise of Performance Management: Claims about Improvement

If governments adopt the recommended reforms of performance management
doctrine, what benefits are they promised? Performance management doctrine
claims a variety of positive benefits, including improved resource allocation, im-
proved responsiveness of bureaucrats to elected officials, enhanced accountability
to the public, and improved efficiency.23 This section describes those claims, which
are summarized in table 2.1. Chapters 3 and 5 return to these claims to see how
well they have been achieved in practice.

Allocative efficiency is “the capacity of government to distribute resources on the
basis of the effectiveness of public programs in meeting strategic objectives.”24 It es-
sentially refers to the pursuit of better decisions in allocating resources and therefore
applies particularly to budgeteers and elected officials. Performance management
doctrine proposes to increase allocative efficiency by providing a process whereby in-
formation on goals is generated through strategic planning and levels of performance
through performance measurement. Greater knowledge about the performance of
programs and process allows more informed allocation decisions. Budgeteers and
elected officials, less concerned with tracking how money is spent, have more time
to focus on providing allocations according to strategic goals, observing whether
these goals are achieved, and holding managers accountable for results.25

Performance management doctrine claims it can facilitate a new approach to ac-
countability in the public sector, one based on the achievement of measurable re-
sults. The prospect of result-based accountability is one of the most frequently
mentioned positive benefits of performance management, but it is often left un-
explored. There are two main ways to consider how performance management
might change accountability. External accountability of the government to the pub-
lic changes accountability because the public now has greater information available
on the level of performance of the government the people fund. Performance man-
agement also provides the opportunity for the public to influence public goals
through citizen participation in strategic planning or assessment of services.

The second type of accountability is internal accountability of bureaucrats to
elected officials. Without performance information, bureaucrats can exploit their
information advantage over elected officials in a number of ways, including lack
of responsiveness, work shirking, and budget maximization. Performance infor-
mation systems allow elected officials to specify the goals they wish to achieve and

Performance Management as Doctrine 35

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makes transparent the success or failure of public organizations over time. Elected
officials gain an improved ability to direct public services, ascertain bureaucratic
performance, and make decisions as a result.

Internal accountability may simply mean the availability of performance infor-
mation, enabling elected officials to keep a performance scorecard and fostering
oversight accountability. Another type of internal accountability is the ability of
elected officials to direct, through setting of strategic goals, the policies and activ-
ities of bureaucrats or exert policy control. Performance information facilitates the
achievement of this benefit by creating a goal-setting process that is transparent
and can be controlled by senior officials. Policy control essentially assumes a top-
down relationship between elected officials and appointees and bureaucrats. The
justification for such a top-down relationship is based on the normative dimension
of democratic control and is particularly present in economic theories of public or-
ganizations, which emphasize elected officials reasserting control over bureaucrats
by focusing on performance goals rather than inputs.

36 Chapter Two

Table 2.1 The doctrinal benefits claimed by performance management

Benefit claimed How benefit will occur

Allocative efficiency

Accountability of
government to the
public

Accountability of
bureaucrats to elected
officials

Technical efficiency

• Budgeteers will incorporate performance information in making
better budget decisions, reflected by greater allocative efficiency in
the distribution of resources.

• Performance information available for use.
• Public better informed about performance of public institutions.
• Potential for public involvement in setting goals and evaluating

performance.

• The policy goals of elected officials are translated into lower level
goals that direct the actions of agency-level employees.

• Performance information makes the performance of programs
become transparent.

• When bureaucrats are given control over goals, the introduction
of performance information allows elected officials to hold them
responsible for performance.

• Performance information provides transparency of productivity,
making shirking more difficult and facilitating a top-down
pressure to perform.

• Decision makers have greater knowledge about the performance
of programs and processes. Such single-loop learning informs
decisions about process reengineering.

• As managers are granted increased authority, they can employ
their functional knowledge with single-loop learning for a greater
number of process reengineering and performance improvement
opportunities.

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Results-based internal accountability can be taken a step further, to imply an-
swerability for performance. Responsibility accountability means holding agencies
or individual managers responsible for achievement. If responsibility accountabil-
ity is dependent on having requisite authority, it logically requires matching levels
of authority over resources with responsibility.

Improved technical efficiency targets the actions of managers. By offering a set of
ex-ante objectives, managers will have clear direction as to what they are trying to
achieve. Performance information provides transparency of productivity, making
shirking more difficult and facilitating a top-down pressure to perform. Managers,
stifled by traditional management controls, can improve productivity once they are
given greater authority in managing assets and employees. By reducing input-based
controls in favor of a focus on results, managers will have the flexibility, combined
with their expertise and judgment, to spend the money more effectively than can
be mandated by central budgeteers or the legislature. Greater managerial knowl-
edge about the performance of programs and processes allows informed manage-
ment decisions. Decisions that exploit knowledge and improve productivity
through reengineering are more likely to occur where managers have authority to
undertake change. Increasing managerial authority is, therefore, linked to greater
use of performance information to improve productivity.

Performance management doctrine calls for removing existing disincentives
and creating positive incentives for improved technical efficiency. Allowing carry-
overs of unspent money gives agencies an incentive to be more efficient with re-
sources.26 Some performance management systems use explicit rewards tied to the
achievement of specific goals, but such experimentation has primarily occurred
among contracting relationships, and pay-for-performance systems have had a
mixed record within traditional government bureaucracies. 27

Conclusion

This chapter has summarized the claims of performance management doctrine.
This doctrine promises that by following its prescriptions, public organizations can
reorganize themselves to move from an inefficient past to a results-driven future.
The following chapters examine just how realistic this vision is.

Notes

1. Hood and Jackson, Administrative Argument.
2. Simon, Administrative Behavior.

Performance Management as Doctrine 37

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3. Downs and Larkey, The Search for Government Efficiency.
4. Forrester and Adams, “Budgetary Reform through Organizational Learning.”
5. Hood and Jackson, “Key for Locks in Administrative Argument.”
6. Barzelay, “How to Argue about the New Public Management.”
7. Downs and Larkey, The Search for Government Efficiency.
8. Moore, Creating Public Value.
9. Koteen, Strategic Management in Public and Nonprofit Organizations, 15.

10. Stewart, “The Role of Information in Public Accountability.”
11. Miller, Rabin, and Hilldreth, “Strategy, Values, and Productivity.”
12. Williams, “Measuring Government in the Early Twentieth Century.”
13. Bouckaert, “Measurement and Meaningful Management”; Hatry, Performance Measure-

ment.
14. See, for example, Cothran, “Entrepreneurial Budgeting”; Gruening, “Origin and Theo-

retical Basis of New Public Management”; Keating and Holmes, “Australia’s Budgetary and Fi-
nancial Management Reforms”; Osborne and Gaebler, Reinventing Government; Thompson,
“Mission-Driven, Results-Oriented Budgeting”; Schick, “Opportunity, Strategy, and Tactics in
Reforming Public Management.”

15. Barzelay, The New Public Management.
16. Schick, “Opportunity, Strategy, and Tactics.”
17. Hongren, Sundem, and Stratton, Introduction to Management Accounting, 10th ed.
18. Simons, Levers of Control, 165.
19. Thompson, “Mission-Driven, Results-Oriented Budgeting.”
20. Ibid., 94.
21. Ibid., 95.
22. Osborne and Gaebler, Reinventing Government.
23. Aristigueta, Managing for Results in State Government; Poister and Streib, “Strategic Man-

agement in the Public Sector.”
24. Schick, A Contemporary Approach to Public Expenditure Management, 89.
25. Grizzle, “Linking Performance to Decisions.”
26. Cothran, “Entrepreneurial Budgeting.”
27. About rewards tied to achievement, see Heinrich, “Organizational Form and Perfor –

mance.” On the subject of pay-for-performance systems, see the following: Ingraham, “Of Pigs
in Pokes and Policy Diffusion”; Kellough and Lu, “The Paradox of Merit Pay in the Public Sec-
tor”; VanLandingham, Wellman, and Andrews, “Useful, But Not a Panacea.”

38 Chapter Two

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3
The Partial Adoption of Performance
Management Reforms in State Government

This chapter reviews current knowledge on performance management imple-
mentation at the state government level.1 From one perspective it looks optimistic.
A number of surveys show that state governments have been busy creating per-
formance management systems. State governments have mandated that agencies
create and disseminate performance reporting requirements, but they have not
provided the type of personnel and budgeting flexibility that performance man-
agement doctrine suggests is needed. Therefore, we see only a partial adoption of
performance management doctrine. In addition, there is little evidence that this
information is being used among decision makers in the governor’s office or in the
legislature. I illustrate this point with case evidence from my research on the use of
performance management in Vermont, Virginia, and Alabama.

The Rise of Performance Information Systems

At the federal level agencies have been producing strategic plans in accordance
with GPRA since 1997, performance goals since 1999, and performance results
since 2000. At the state level, the 1990s saw a period of adoption of similar types
of performance reporting requirements. Surveys have found a high level of adop-
tion of performance information systems that create strategic goals and perfor –
mance data, based on measurements of formal requirements for performance
reporting or surveys of budgeteers or administrators.2 By the late 1990s, thirty-one
states had legislative requirements creating performance information systems, and
sixteen states had similar administrative requirements. By 2004, the level of adop-
tion grew to include all states. Thirty-three states had a performance management
statute on the books (listed in table 3.1), and the remaining seventeen states had
an administrative requirement.

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Evidence collected as part of the GPP confirmed the widespread adoption of per-
formance management policies and offered an additional insight. By using content
analyses of performance management documents across the states rather than meas-
uring requirements for performance management, or relying on self-reporting, it
was possible to verify the actual existence of performance information in state doc-
umentation and to demonstrate wide variation among states in terms of the range

40 Chapter Three

Table 3.1 Performance management legislation in the states

State Legislation Year Passed

Alabama State Code 41–19-11 1995
Alaska State Code 37.07.010 2002
Arizona State Code 35–113-115.5 1997
Arkansas Act 1463 of 2003 2003
Colorado State Code 2–3-207 2001
Connecticut Sec. 4–7(b) CGS 1985–86
Delaware State Code 70 Ch. 492 and Title 29 Part V Ch. 60B 1996
Florida State Code Ch. 216 1996
Georgia State Code 45–121 1993
Hawaii State Code 101 Sec. 26.8 1970
Idaho State Code 67–19 1994
Iowa State Code Ch. 8.22 2001
Kentucky HB 502 Part 3 Section 35 2002
Louisiana State Code 39–87.2 2003
Maine State Code Title 5 Ch.151-C, Sec. 17.10K-Q 1999
Minnesota State Code Ch. 16A.10 2003
Mississippi State Code 27–103-153 through 27–103-159 1996
Missouri Revised Statutes, Chapter 33.210 2003
Montana State Code 17–7-111 1999
Nevada State Code 353.205 1996
New Mexico MNSA 6–3A-1 2001
Oklahoma State Code 74–9.11 1975
Oregon Oregon State Code 285a.150 1993
Rhode Island State Code 35–3-24, Section 16 Article 1 1996
South Carolina State Code 1–1-820 1995
South Dakota State Code 4–71972 amended 1985;

4–7-35–38
enacted 1994;
repealed 1999

Tennessee Chapter 874 of Public Acts 2002
Texas State Code 322.011 under General Government 1993
Utah State Code Title 36 and Title 62A 1997
Vermont State Code Title 32, 307c 1993
Virginia State Code 2.2–5510 and 2.2–1501, -1509, -1511 2003
Wisconsin Act 27 91561997 1997
Wyoming Code Title 28, Section 28 115–116 1995

Source: Melkers and Willoughby, Staying the Course: The Use of Performance Measurement in
State Government.

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of performance information produced.3 Table 3.2 provides the result of content
analyses of budget, strategic planning, and performance reports. States with higher
numerical scores in table 3.2 have built better performance information systems.
States increase their standing on the scale if they feature a range of performance in-
formation such as quantitative measures/targets and qualitative mission/vision
statements and goals, link responsibility for achievement of goals to specific actors,
have clear goals and specific measures, show consistency between goals and meas-
ures, track performance measures across time and against preset targets, and main-
tain consistency of goals across different policy documents.

While all states say they have some type of performance management system in
place, and most states require agencies to produce strategic plans and/or performance

Partial Adoption of Performance Management Reforms 41

Table 3.2 Focus on performance information: Range of documented
performance data

Range of Range of
performance performance

State information State information

Alabama 13.00 Montana 45.00
Alaska 10.00 Nebraska 71.00
Arizona 101.00 Nevada 43.00
Arkansas .00 New Hampshire 0.00
California 33.00 New Jersey 44.00
Colorado 41.00 New Mexico 57.00
Connecticut 38.00 New York 21.00
Delaware 82.00 North Carolina 33.00
Florida 69.00 North Dakota 50.00
Georgia 68.00 Ohio 48.00
Hawaii 63.00 Oklahoma 22.00
Idaho 66.00 Oregon 63.00
Illinois 53.00 Pennsylvania 55.00
Indiana 36.00 Rhode Island 56.00
Iowa 77.00 South Carolina 44.00
Kansas 19.00 South Dakota 24.00
Kentucky 52.00 Tennessee 59.00
Louisiana 98.00 Texas 89.00
Maine 69.00 Utah 52.00
Maryland 55.00 Vermont 47.00
Massachusetts 14.00 Virginia 79.00
Michigan 27.00 Washington 61.00
Minnesota 72.00 West Virginia 21.00
Mississippi 20.00 Wisconsin 16.00
Missouri 81.00 Wyoming 47.00

State average 48.08

Source: Moynihan, “Managing for Results in State Government: Evaluating a Decade of

Reform.”

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and Reform
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reports, the availability and quality of the resulting information can look very dif-
ferent from state to state. Even with this caveat in mind, the fact that all state gov-
ernments have willingly accepted one of the basic recommendations of performance
management doctrine—to build a performance information system—is indicative
of the success of at least this part of the doctrine. However, states have been much
more reluctant to embrace the second recommendation of this doctrine, that is, to
foster managerial flexibility.

Managerial Flexibility: Financial Controls

Many states claim to have loosened managerial authority with financial tools.
However, either central executive branch agencies or the legislative branch remains
involved in the use of these tools, eliminating any real increase in discretion at the
agency or operational level. Levels of centralization on financial controls that con-
strain process change—procurement, contracting, and the use of resources—are
reported here, based on 2001 GPP survey responses from state financial manage-
ment officers. The potential to carry over cost savings across years, a means to en-
courage efficiency in operations, is also discussed.

In the area of procurement and contracting, agencies have a fixed dollar sum
under which they have discretion (see box 3.1). These sums are relatively low, with
an average of $18,300 for procurement and $24,567 for contracting. Above such
levels a formal bidding process will be required, over which agencies rarely have dis-
cretion without central approval. While the agency may be involved in the process,
the governor and/or the executive budget office usually makes the final decision.
In only seven states do agencies have complete discretion in formal procurement
bids, and only four states for contracting.

A similar pattern exists for discretion in resource allocation. Efforts to switch
money between programs, object classifications, and line items may be prohibited
or subject to ex-ante approval by the Office of the Governor, the finance depart-
ment, or the legislature. In only seven states is there limited discretionary power
for agencies to switch money among programs, and this discretion is unlimited in
only one state. Controls become more decentralized for smaller resource categories,
such as object classifications and line items. Thirteen states claim limited discre-
tionary power for agencies to switch between object classifications, and thirteen
other states claim unlimited discretion. Eleven states claim limited discretionary
power for agencies to switch between line items, and nineteen states claim unlim-
ited discretion. In some cases the discretion applies to some but not all agencies.
Another frequent and significant limit on resource discretion is the explicit prohi-
bition to affect wages or salaries, protecting the largest departmental operating ex-

42 Chapter Three

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penses from change and reinforcing human resource (HR) controls. A final form
of financial control is the requirement to return unspent appropriations rather
than allow carryovers, denying a possible incentive for greater efficiency in spend-
ing resources. While twelve states allow the possibility of carryovers, it is usually
subject to uncertain ex-ante central permission. Only two states claim to offer
agencies unlimited discretion in carrying over unspent funds.

Human Resource Management Controls

Recent analyses of HR trends in state governments note increased decentralization,
most significantly in personnel classifications.4 However, this decentralization is rel-
ative, largely reflecting a shift in control of personnel functions from state-level HR
offices to agency-level central HR offices.5 Central agencies at the statewide and
agency level clearly define the framework within which managers can work, usually
guided by some form of civil service legislation. GPP survey data find that managers
have high levels of autonomy in establishing performance expectations and are
largely responsible for administering performance appraisals. However, they are
closely guided by centralized performance-appraisal instruments and scoring sys-
tems, and they have little control in determining compensation to reflect perfor –
mance. Similarly, classification systems that detail the duties and status of employees
are largely centralized at the state level, beyond the control of individual managers.
In terms of hiring, managers are usually involved in approval to fill a position, in-
terviewing candidates, recommending appointments, and making appointment de-
cisions. However, a mixture of the agency and statewide HR agencies first establish

Partial Adoption of Performance Management Reforms 43

Box 3.1 Agency discretion in procurement/contracting in fifty states

Agency discretion in nonformal contracts Yes = 80%

Limit before formal contract required $24,567.69 (average)

Agency discretion for formal contracting Yes = 8%

Agency discretion in nonformal bidding process Yes = 90%

Limit before formal bidding process required $18,300 (average)

Agency discretion for formal bidding process Yes = 14%

External oversight of procurement process Yes = 96%

Source: Moynihan, “Managing for Results in State Government: Evaluating a Decade of
Reform.”
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the screening, ranking, and selection of a candidate pool. Table 3.3 illustrates these
findings, providing average state score on HR discretion, where a six represents
managerial control and a one represents central statewide agency control.6

Survey evidence supports the picture painted of statewide performance man-
agement systems. Melkers and Willoughby’s survey of executive and legislative
budgeteers caution that actual implementation of performance management is
still a work in progress, partly due to diverging expectations for use and success
among different actors.7 Surveys of senior administrators reported by Brudney,
Hebert, and Wright find that the most intensively adopted reforms of the 1990s
were related to creating performance information systems, while the least inten-
sively adopted reforms were the reduction of HR and financial management con-
trols.8 Later work by Burke, Cho, Brudney, and Wright supported this earlier
research, finding that factor analysis confirmed the division of 1990s state gov-
ernment reforms into two distinct categories relating to managerial authority and
results, and that the managerial authority category lagged behind the results cate-
gory in terms of adoption.9

Perhaps most telling is the survey results of Anders, who surveyed administra-
tors and central budget officers in 1996 and again in 2004. The results show that

44 Chapter Three

Table 3.3 Degree of managerial control of specific HR functions

HR function Average

Recommending appointments 5.40
Establishing performance expectations 5.34
Making appointments 5.26
Administering performance appraisal 4.86
Determining promotions 4.80
Interviewing 4.76
Approval to fill position 3.76
Determining appraisal grading/scoring systems 2.77
Screening candidates 2.59
Ranking candidates 2.55
Developing performance appraisal instruments 2.18
Establishing candidate list 2.12
Developing tests 2.04
Administering tests 2.04
Scoring tests 2.02
Determining compensation 2.00
Developing classification 1.24
Conducting classification 1.94

Note: Managerial authority on a 1 to 6 scale, where 6 is complete managerial control and 1 is
complete control by statewide central agency actor.
Source: Moynihan, “Managing for Results in State Government: Evaluating a Decade of
Reform.”

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most public managers see the arrival of performance information systems as hav-
ing added an administrative burden but not an increase in discretion. These neg-
ative perceptions of performance information systems are hardening over time. In
both periods a vast majority agreed that performance information systems in-
creased the number of rules and instructions they had to comply with (72 percent
in 1996 and 73 percent in 2004) and increased the resources needed to comply
with them (61 percent in 1996 and 68 percent in 2004). In 1996, 66 percent of
respondents disagreed that the introduction of performance information systems
had reduced the number of rules involved in budget execution, increasing to 79
percent by 2004. In 2004, only 14 percent agreed that the new performance in-
formation systems were accompanied with legislative grants of discretion in budget
execution, down from 26 percent in 1996.10

Managers have a variety of different types of discretion, of which discretion over
HR and financial matters is only one. Indeed, chapter 5 shows the ability of man-
agers to use performance management reforms even without any increases in man-
agement discretion. The point, therefore, is not that managers have no authority to
use performance information, but that among U.S. states, the increasing emphasis
on performance data has not been accompanied by increases in managerial author-
ity, contrary to the premise of performance management doctrine.

The Partial Adoption of Performance Management Doctrine

States have embraced the creation of performance information systems, but they
have been reluctant to increase managerial authority. This suggests a partial adop-
tion of performance management doctrine. HR authority remains largely shared be-
tween statewide and agency-level specialists, and there have not been significant
increases in authority for operational managers. Evidence suggests that deregulation
of key controls largely implied shifting more authority to agency-level personnel
specialists, not to managers themselves.11 In short, increases in managerial author-
ity did occur, but not to the degree called for by performance management doctrine.

On the other hand, there has been a good deal of activity in focusing on per-
formance information systems in recent years. GPP surveys also found state gov-
ernments emphasizing performance management as a new wave of reform, and
previous reviews suggest limited state government interest in performance man-
agement prior to the 1990s, followed by a renewed interest in the topic in imple-
mentation of performance information systems during the 1990s.12 Table 3.2
suggests that some states have advanced more quickly than others in producing a
wide range of performance information.

If states were pursuing a complete performance management doctrine, we would
expect to see a significant positive correlation between the focus on results scale

Partial Adoption of Performance Management Reforms 45

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indicated in table 3.2 and different measures of managerial authority. We find a pos-
itive but far from significant correlation in each state’s focus on performance infor-
mation and the overall measure of HR authority (a summary of the data used in
table 3.3) of 0.073.13 The relationship between financial management authority
and focus on performance information is stronger but still less than implied by per-
formance management doctrine. An overall weighted measure of financial author-
ity that includes program reallocation powers and carryover power has a 0.265
correlation with focus on results, not significant at 5 percent in a two-tailed test.14

The individual measures of financial authority provide a mixed picture. There are
significant or near-significant positive correlations between the limited discretion
over object classifications and line items and the focus on performance information
measure. However, there is no relationship between the more substantive program
measure of reallocation discretion and focus on performance information. Fur-
thermore, there is only a weak positive relationship between the ability to carry over
funds and focus on performance information. It appears that states that adopt cre-
ate a wide range of performance information are more likely to provide a narrow
range of increased financial discretion, but not broad increases in either financial or
personnel authority. Even the modest indicators on financial authority are over-
stated, since low personnel authority severely limits financial discretion. The most
prominent limitation on the use of resources is that any changes cannot affect per-
sonnel, where most public organizations spend the majority of their budget. Even
if managers gain new financial authority, this limitation means that they can redi-
rect only at the margins of their operating budget.

This evidence undercuts the proposition that performance management reform
is being implemented in stages and that managerial authority simply lags the im-
plementation of performance information systems. States that have led the way in
focusing on results have not taken on significant parallel reforms of authority and
have not viewed the two aspects of performance management as closely connected.
Such a connection may be realized in the future as the limitations of the current
approach to performance management become evident, but it does not appear to
be the current blueprint for reform.

The evidence presented thus far focuses on the states. But what about the federal
level? Here, the evidence is not as clear-cut but nonetheless suggests a similar pattern.
As other chapters will discuss, the federal government has adopted successive rounds
of performance management reforms, first with the Government Performance and
Results Act and later in the form of the Program Assessment Rating Tool. At the same
time, there has not been an overhaul of governmentwide federal personnel laws, de-
spite multiple efforts by both the Clinton and George W. Bush administrations.
Under President Bill Clinton and Vice President Al Gore, efforts to reform person-
nel rules were met with opposition from both public sector unions and Republicans

46 Chapter Three

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in the legislature.15 The White House tried to find alternative ways to provide flexi-
bility to innovators, but without a statutory basis, the effect of such efforts was lim-
ited. One exception was the area of procurement, where legislative change did have
an impact. But overall, as Rubin and Kelly note, “throughout the 1990s the U.S. at-
tempted, but largely failed, to introduce an expenditure management system with
fewer input controls in exchange for performance contracts.”16

The Bush White House also proposed expanding managerial discretion and
struggled with these efforts until the aftermath of September 11 allowed them to
push such management reforms in the Department of Homeland Security and the
Department of Defense.17 The pattern follows a more piecemeal approach to HR
reform, where specific agencies have won varying degrees of exception from the
standard personnel system, to the point that it is difficult to say that a single per-
sonnel system still operates. However, this patchwork model of personnel has not,
as yet, evolved into anything resembling the performance management ideal
model identified in figure 2.1 or seen among NPM benchmark countries. Indeed,
focus groups of federal managers reported concerns similar to those expressed by
state government counterparts in Anders’s survey: They perceive that they have no
greater discretion than before, even as they are being held to more explicit per-
formance expectations.18 A survey of federal managers provides a similar finding:
57 percent of non–Senior Executive Service (SES) managers and 61 percent of
SES managers felt they were being held accountable for outcomes, but signifi-
cantly less—38 percent and 40 percent, respectively—felt that they had the
authority to achieve these results.19

High Results Focus and Restricted Authority:
Implications for Public Management

Performance management doctrines did indeed exert an influence in the United
States, leading to a new configuration of governmental systems. This finding is in
itself significant, but what is more interesting is that the outcome did not mirror
the performance management ideal-type called for in performance management
doctrine and pursued by NPM benchmark countries. Instead, U.S. state govern-
ments shifted toward a configuration characterized by a high focus on results but
constrained managerial authority, illustrated by box 4 in figure 2.1.

What are the implications of this constrained performance system as a new con-
figuration for governance? The performance management ideal-type portrays the
potential for improved efficiency and results-based accountability, but performance
management doctrine also emphasizes that efficiency gains through process im-
provement are inherently limited by constraints on managerial authority. Likewise,

Partial Adoption of Performance Management Reforms 47

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results-based accountability will not occur when managers lack authority over
processes and, ultimately, outputs. Whether performance management has any pos-
itive benefit at the managerial level depends largely on the willingness of agency
leaders and managers to search for ways to utilize performance management within
existing constraints.

Ultimately, therefore, the potential for performance systems where managers seek
to improve performance and are formally held accountable to results is undermined
by the continued existence of financial and personnel control systems that empha-
size compliance and error avoidance. The existence of performance information has
not replaced these systems as the fundamental way in which state governments at-
tempt to control managerial behavior. The ability of public managers to achieve
high-level outcomes is already stretched by factors beyond governmental control,
but internal management controls further restrict the ability to direct and improve
more modest organizational outputs. There are many valid arguments to be made
for such controls, in terms of the need for probity and avoidance of improper use of
public power. However, state governments have lurched headlong into the pursuit
of results-based government hoping for improved efficiency and results-based ac-
countability, while only partially implementing the reforms necessary to achieve
these goals and maintaining control systems contradictory to them.

A performance information system ensures that data is available to decision
makers. But the availability of performance information does little to improve the
capacity or incentives for decision makers to use this information, and their exis-
tence tells us little about how decisions are actually made. Providing performance
information is a necessary, but not sufficient condition to ensure its actual use. Ul-
timately, the most telling standard for performance management is not whether
performance information exists, but whether it is used in various decision-making
venues in government, from day-to-day management of programs to high-level re-
source allocation decisions. It is by incorporating performance data into decisions
that governments move from simply measuring results to managing them.

Ascertaining whether and to what degree performance data was actually used
in decision processes is difficult. Self-reported surveys tend to be more positive on
whether information is being used than evidence from case research. In respond-
ing to surveys such as the GPP or those undertaken by the GAO or the Govern-
mental Accounting Standards Board, state officials are usually able to give examples
of how performance data influenced specific decisions but cannot show any sys-
tematic use of performance data.20 At the same time, legislators complain of in-
formation overload and poor data quality, expressing mistrust toward the
performance data given to them.21

This book relies primarily on case study evidence to try to ascertain if per-
formance information is being used and if it matches the doctrinal claims laid out

48 Chapter Three

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in chapter 2, including expected uses in the areas of resource allocation, account-
ability, and technical efficiency. The following chapters examine whether these
claims have been satisfied and try to explain factors that lead to their occurrence
or not. Chapter 4 discusses the potential for political oversight and policy control
using performance management benefits of reform, and chapter 5 includes a dis-
cussion of responsibility accountability. Chapter 6 deals with the case evidence on
resource allocation, and both chapters 5 and 9 examine managerial uses of per-
formance information in greater detail. The balance of this chapter introduces the
three cases and previews case findings to illustrate how the partial adoption of per-
formance management systems affected the doctrinal claims of performance man-
agement in Alabama, Virginia, and Vermont.

Performance Management Adoption in Alabama

Performance management in Alabama lacks a glorious past, although it has made
some progress. In the 1999 assessment of performance management practices in
state government, the GPP issued the state an F grade, finding little evidence of
any sort of strategic planning or performance reporting. Such practices had been
introduced in previous administrations, but faded away once these governors
left office. The only vestiges of previous efforts were a pronounced sense of cyn-
icism among long-term employees toward results-based reform and a barely im-
plemented legislative requirement for performance management. Under
legislation, performance reporting occurs in conjunction with the biennial
budget cycle: The governor is required to develop a statewide strategic plan, and
agencies are required to produce goals, objectives, and plans for implementation
and performance measures. These requirements, passed under Governor Folsom
(1993–95), were largely ignored or led to pro forma completion when he failed
to win the following election. Subsequent governors did not create strategic
plans. Some agencies reported a handful of performance measures or nothing at
all. In instances when performance information was reported, it was widely ac-
knowledged that such information had little impact on either resource allocation
or management, and neither have more recent reform efforts. Performance meas-
ures were no longer included as part of the printed budget by 1999, eliminated,
says a budget official, because “it just wasn’t worth what it was costing to print
extra pages.”

Governor Siegelman (1999–2003) tried to reignite performance management
in Alabama. A statewide strategic plan, Achieve: Achieving Accountability for Ala-
bama, was created by the governor, policy staff, and officials from the Department
of Finance in 1999 and 2000. Achieve and subsequent agency planning adopted
a balanced scorecard approach, a technique suggested by the consultants hired by

Partial Adoption of Performance Management Reforms 49

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the state. Achieve itself explicitly mentions many of the performance management
doctrinal benefits identified in chapter 2: improved accountability, efficiency, align-
ing individual actions with overall state expectations and strategies, communicating
strategic objectives clearly, and linking objectives to resource allocation.22 Following
the development of Achieve, Governor Siegelman required five pilot agencies, in-
cluding the Alabama DOC, to undertake performance management.

The creation of a statewide strategic plan was seen as the first step in building
what was called a Strategic Plan and Performance Measurement System that “aligns
individual actions with overall state expectations and strategies.”23 The main link-
ing mechanism to provide goal congruence between statewide goals and individ-
ual action was the creation of agency-level plans. A logical order is presented in the
selection of goals, suggesting that choices are first made at a governmentwide level
and become increasingly specific. According to Achieve, the Strategic Plan and Per-
formance Measurement System is patterned on the following chronological order
of actions:

• Create a mission statement for Alabama.
• Determine strategic issues areas, called “focal areas of great importance.”
• Determine strategic objectives that provide direction for activities

occurring at the agency level.
• Establish the long-term goals Alabama would like to achieve.
• Identify performance measures that match the strategic objectives and will

help determine levels of success, prioritize allocation of resources, and
create needed accountability.

• Create agency action plans to implement goals.
• Results, which are intended to be reviewed and to feed back into every

element of the process for future adjustment of the system.

While this research focuses largely on the Siegelman reforms, it is notable that
Alabama has continued to search for new modes of performance management after
Siegelman lost his reelection bid in 2002. Siegelman’s successor, Governor Bob
Riley, abandoned Achieve and has introduced another attempt at performance
budgeting, in the form of SMART, which is short for Specific, Measurable, Ac-
countable, Responsible, and Transparent.

Performance Management Adoption in Virginia

Virginia is arguably the foremost exponent of performance management among
U.S. state governments, pursuing results-based government in one form or an-
other since the 1970s. Central agencies contain experienced specialists on per-

50 Chapter Three

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formance management, and the state has consistently received an A- grade for its
performance management efforts across three GPP surveys, the only state to do so.
The GAO, the National Performance Review, and others have pointed to Virginia
as an exemplar that the federal government could learn from.

By the time Virginia legislated performance management in House Bill 1065
in 2000, it was, unlike Alabama or Vermont, codifying existing practices of per-
formance reporting rather than seeking to initiate new policies. H.B. 1065 does
not describe the nature of the reporting requirements for agencies, but it gives dis-
cretion to the Department of Planning and Budget to determine what perfor –
mance information is to be reported with the budget. The Department of Planning
and Budget has been fulfilling this role since 1995, at various times requiring issue
analysis, environmental scanning, discussion of customer service needs, linkage of
performance targets to budget requests, and activity-based costing. H.B.1065 was
followed by more comprehensive legislation in 2003, H.B. 2097, known as the
Virginia Government Performance and Results Act, which further formalized the
process by mandating that each agency develop a strategic plan that included goals
and objectives on a three-year basis. Governor Gilmore (1998–2002) also devel-
oped a statewide strategic plan intended to provide guiding principles for agency
goal-setting and operations. This was followed by Governor Warner’s (2002–6)
Roadmap for Virginia’s Future.

Virginia has developed a performance management system that claims to link
strategic planning, performance measurement, evaluation, and performance budg-
eting. Budget analysts are called on to assess performance information in terms of
resource allocation, management decision making, and program improvement.
Publicly available performance information is everywhere: in the budget, the gov-
ernor’s statewide plans, annual statewide performance reports, agency strategic
plans, and in the case of the Virginia DOC, subagency strategic plans. The De-
partment of Planning and Budget has developed a web-based central database for
such information, whose information has been assessed and audited by one or
more of three central agencies with oversight for performance management.

Performance Management Adoption in Vermont

The state of Vermont did not have a performance management system as com-
prehensive as Virginia, but it did have greater experience than Alabama. At the
statewide level, legislators in 1994 adjusted the appropriations process to require
that budget submissions contain a strategic plan for each state agency and depart-
ment, including a statement of mission and goals, a description of indicators used
to measure outputs and outcomes, identification of the groups of people served by
programs, and the strategies for meeting the needs of the agency or program.

Partial Adoption of Performance Management Reforms 51

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Unlike the other states surveyed, there was no single statewide strategic plan in
Vermont. Governor Howard Dean (1991–2003) was not a strong supporter of for-
mal statewide planning, preferring to promote policy goals through his policy staff
and weekly cabinet meetings, and his successor Jim Douglas proved little differ-
ent. The most formal statement of the governor’s goals appeared in the budget. The
main vehicle for producing performance information came from the five overar-
ching agencies and subordinate departments through their statutory reporting re-
quirements as part of the budget, although the legislation did not lead to systematic
use of performance information in resource allocation. Staff at the Department of
Finance and Management were all too aware of the political nature of decision
making, even at department-level budget preparation decisions, where budgeteers
allocate resources based on their expectations of the reactions of other budgeteers
at Finance and Management and the legislative branch. However, the Department
of Finance and Management pursued performance management anyway. Accord-
ing to one department official, this was “because it makes sense,” it was how re-
sources should be allocated, and the Department of Finance and Management had
a responsibility to make that aspiration as close to a reality as possible.

The Department of Finance and Management has also emphasized the possi-
bility of using performance information for managerial decisions, with perfor –
mance information becoming part of the decision-making culture of agencies.
However, efforts to prompt agency-level managerial uses have been limited. The
main vehicle for trying to ingrain performance information into departmental cul-
ture and management decisions remains the statutory requirement to report such
information in budget submissions. It is not surprising, according to one Depart-
ment of Finance and Management employee, that many departments “don’t treat
it as a management tool. They treat it as an exercise they do once a year in their
budget.”

Matching the Promise of Doctrine with Reality

Chapter 2 identified the promise of performance management, including specific
claims about resource allocation, accountability, and performance improvement.
This section briefly describes whether performance management reforms met these
goals, summarized in table 3.4.

For resource allocation, the findings suggest that the use of performance data is
episodic, especially by legislators. In the states examined, performance information
was discussed in some instances, but usually prompted by an advocate using in-
formation to support a preestablished position, rather than a careful consideration
by unbiased actors on what the data meant. This case evidence is supported by
other research. For instance, Joyce and Tompkins find some limited evidence of use

52 Chapter Three

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among budgeteers in the executive branch but almost negligible use among legis-
lators.24 Melkers and Willoughby found implementation of performance man-
agement proceeding slowly. They also found that performance information had
not, thus far, affected budget decision outcomes, noting that “while governments
continue to strongly emphasize integrating budgeting with performance assess-
ment, there is little recognition of how performance measurement applies to
budget balancing.”25 Indeed, the most significant problem in the application of
performance measurement as cited by state budgeteers was lack of regular use by
top management and elected officials and the low priority assigned to performance
measures in the budget process.26 The GAO found that even in states with excep-
tional performance, budgets use data to inform but not to determine budget allo-
cations.27 Anders found that 22 percent of administrators and central budget
officers surveyed in 2004 believed that performance information had an influence
on political decision makers, down from 25 percent in 1996.28 Other in-depth case
studies of performance management efforts have found little evidence that
statewide actors use performance information.29

The case findings on agency-level performance improvement are similar. All
three DOCs had strategic goals and matching performance targets, and they re-
ported actual performance on a regular basis. However, there was little evidence
that organizations systematically evaluated this knowledge in the search for im-
proved alternative organizational processes. There were some uses of performance

Partial Adoption of Performance Management Reforms 53

Table 3.4 Promised benefits of performance management compared with case
findings

Benefit Description

Resource allocation Performance information available and occasionally discussed in
budget process in each state, but not used in a systematic way.

External accountability Performance information available to public in all states; range,
quality, and accessibility of data better in Vermont and
especially Virginia. Little evidence of public use of this
information, with exception of Vermont DOC, where some
members of public could participate in goal-setting.

Internal accountability Availability of performance information provides opportunity
for elected officials to exert greater oversight and control, but
there is little evidence that they use performance information to
the degree necessary to achieve such control. No evidence of
management systems or actions consistent with goal of
responsibility accountability.

Performance improvement Some evidence that agency staff used performance data for
operational improvement, but its use was not systematic.

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information by managers, explored in chapter 9, but there was little evidence of
managers changing processes for the purposes of performance improvement.

For external accountability, the case evidence suggests that, while performance
information is indeed provided in often impressive detail, it is uncertain whether
the general public has been really demanding it or knows what to do with it. An-
other and somewhat higher standard of external accountability would be that the
public was involved in setting goals, a standard largely unmet by the states studied.

For internal accountability, performance information provides improved ca-
pacity for elected officials to exert both oversight and policy control. However,
elected officials have largely shown a disinclination to actually use performance
management for these purposes. In part, this is because they are unlikely to be a
willing audience for performance data for any purposes, and performance infor-
mation is not always of a quality to provide useful oversight. The process of se-
lecting goals provides an opportunity for elected officials to exert explicit policy
control by requiring agencies to ensure that their strategic plans are consistent
with their goals. Central agencies usually review these plans, but direct interven-
tion is the exception rather than the rule. There are few goals critical to the gov-
ernor, and the agency is likely to already have made an effort to reflect this. In any
case, broad gubernatorial goals can usually be easily satisfied with the existing
policy objectives of agencies.

Performance management doctrine also suggests the possibility of responsibility
accountability, where bureaucrats would be directly held to account for performance.
The doctrinal claim is that improvement comes when the bureaucrat has clear goals
to achieve, with a set amount of resources, and is deemed responsible for the achieve-
ment of these goals, which may be tied to financial incentives. The motivated bu-
reaucrat figures out more efficient means of delivering these goals. This model of
responsibility accountability has clearly not been implemented in U.S. state govern-
ments. Senior managers in agencies have performance goals to achieve, but there is
not an expectation that ex-post performance will be carefully examined and have an
impact on their tenure or finances. In part, this is because strategic goals are not
treated as a contractual promise, and performance results do not bring about bene-
fits or punishments. Indeed, it is hard to imagine how this might work in the U.S.
system, where strategic goals are established prior to legislative resource allocation
and not renegotiated after budgeting decisions are made.

Conclusion

Evidence on the adoption of performance management offers a number of in-
sights. States have been creating performance information systems, although the

54 Chapter Three

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range and quality of the information that results varies a great deal. States have been
less active in adopting recommendations to provide managers with more author-
ity, suggesting a partial adoption of performance management doctrine. On the
critical issue of use, evidence from the three cases suggests that performance in-
formation was not widely used, and as a result, the predicted benefits of perfor –
mance management were largely unfulfilled. Later chapters expand on this point, but
they also suggest that there are additional uses of performance information that are
positive, though largely unanticipated by performance management doctrine.

State governments have not begun to identify and respond to the weaknesses of
the current approach to performance management. The 2005 GPP survey found
that aspects of performance management that can be converted into standard pro-
cedures are spreading. Aspects of performance management that require behavioral
change on the part of users remain weak, in particular the issue of performance in-
formation use. More states are creating performance information than ever before.
But in some cases, they are failing to build off past efforts. Instead, a new model
of results-based government is presented by successive governors. For instance, the
most recent round of GPP analysis credits Governor Bob Riley’s efforts to intro-
duce performance budgeting in Alabama. But this effort is the third such per-
formance budgeting reform in the last decade. The previous efforts of Governor
Siegelman and Governor Folsom were introduced with fanfare, but they never
seemed to affect agency decision making and died quietly.

A skeptical viewpoint suggests that such an episodic approach to performance
management is doomed to a familiar cycle of failure. Lots of time and energy is de-
voted to creating a performance information system that fails to be used by agency
officials, who assume it will disappear over time and who are proved correct when
it is abandoned by a new governor anxious to put his or her own mark on govern-
ment reform. While Alabama may be an outlier in terms of repeated failures, the
2005 GPP reports that many states are in the same position: starting to embrace
performance management; in the process of planning, building, or improving a
performance information system; optimistic about the future of results-based gov-
ernment; and in some cases able to offer examples of how performance informa-
tion has made a difference. The 2005 GPP report offers numerous examples.
Alaska has “positive momentum”; Wyoming’s “recent adoption of a results-based
accountability model are promising developments”; “although Arkansas does not
currently have a statewide strategic plan, there is momentum in the state due to
the Governor’s new performance-based budgeting system”; in Georgia “the agency
strategic planning system appears somewhat fragmented, but new requirements
just passed may add value to the process”; planning in Illinois and Kansas are both
described as “a work in progress”; “Maryland became in engaged in strategic plan-
ning in 1997, but has yet to fully implement the process.”30

Partial Adoption of Performance Management Reforms 55

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For many states, the promise of performance management looms large, and the
major gains and benefits of performance management appear just a couple of years
away. But at this stage in the development of performance management systems
in state government, it is reasonable to expect that states would have progressed be-
yond this point.

Notes

1. Some of the cross-state comparative analysis in this chapter previously appeared in
Moynihan, “Managing for Results in State Government.”

2. Anders, “Performance Measures as Strategic Management Tools”; Brudney, Hebert, and
Wright, “Reinventing Government in the American States”; Melkers and Willoughby, “The
State of the States”; Melkers and Willoughby, Staying the Course; Office of Program Policy Analy-
sis and Government Accountability, A Report on Performance-Based Program Budgeting.

3. For more detail on how the measures were constructed to track performance informa-
tion systems, human resource authority decentralization, and financial control, see Moynihan,
“Managing for Results in State Government.” The data drew from public documentation and
GPP survey responses, and the content analyses of public documents employed multiple coders
for each documenting, with intercoder reliability of 0.83.

4. Selden, Ingraham, and Jacobson, “Human Resources Practices in State Government.”
5. Moynihan, “Managing for Results in State Government.”
6. Details of how these measures were developed can be found in Moynihan, “Managing

for Results in State Government.”
7. Melkers and Willoughby, “Budgeters’ Views of State Performance-Budgeting Systems.”
8. Brudney, Hebert, and Wright, “Reinventing Government in the American States.”
9. Burke et al., “No ‘One Best Way’ to Manage Change.”

10. Anders, “Performance Measures as Strategic Management Tools.”
11. Selden, Ingraham, and Jacobson, “Human Resources Practices in State Governments.”
12. Denhardt, “Strategic Planning in State and Local Government,” 174–79. Other support

for this claim comes from table 3.1, where of the thirty-three states listed, all but two saw the
legislative changes occur during the 1990s or since 2000. Brudney, Hebert, and Wright, “Re –
inventing Government in the American States”; Snell and Grooters, Governing-for-Results:
Legislation in the States; Seong, “Adoption of Innovation.”

13. Georgia did not offer responses to the questions upon which the HR data was based. The
state has significantly decentralized its personnel system, essentially eliminating its civil service
system. It could be argued that Georgia most closely resembles Texas in this regard, and if we
were to give Georgia a Texas score of 4.83, then the correlation rises to 0.148.

14. A simple average of the four measures of financial authority (program reallocation pow-
ers, objection classification reallocation, line-item reallocation, and carryover power) has a 0.308
correlation with focus on results, significant at 5 percent in a two-tailed test. However, the use
of a simple average as an overall measure would be misleading, incorrectly implying that the four

56 Chapter Three

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measures are of equivalent importance, e.g., that the ability to move around resources among
line items is equivalent to the power to move resources among programs. The weighted meas-
ure reflects differences between the measures. Details on how this measure was created can be
found in Moynihan, “Managing for Results in State Government.”

15. Moynihan, “Public Management Policy Change in the United States 1993–2001.”
16. Rubin and Kelly, “Budget and Accounting Reforms,” 576.
17. Moynihan, “Protection versus Flexibility.”
18. Anders, “Performance Measures as Strategic Management Tools”; Dull, The Politics of

Results.
19. U.S. General Accounting Office, Observations on the Use of OMB’s Program Assessment

Rating Tool, 23; Frederickson and Frederickson, Measuring the Performance of the Hollow State.
20. U.S. Government Accountability Office, Performance Budgeting: States’ Experiences Can

Inform Federal Efforts.
21. Joyce and Tompkins, “Using Performance Information for Budgeting.”
22. Siegelman, Achieve, 3, 5.
23. Ibid., 5.
24. Joyce and Tompkins, “Using Performance Information for Budgeting.”
25. Melkers and Willoughby, Staying the Course, 17.
26. Ibid., 26.
27. U.S. GAO, Performance Budgeting: States’ Experiences Can Inform Federal Efforts.
28. Anders, “Performance Measures as Strategic Management Tools.”
29. Aristigueta, Managing for Results in State Government; Franklin, “An Examination of Bu-

reaucratic Reactions to Institutional Controls.”
30. Quotes taken from state reports prepared by Barrett et al., “Grading the States ’05.”

Partial Adoption of Performance Management Reforms 57

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6
The Interactive Dialogue Model of
Performance Information Use

When we were asked to do a problem in our childhood math classes, numbers
offered simplicity. There was one correct answer, which we found or missed. Per-
formance data is given the same reassuring status of clarity and objectivity.1 But this
understanding of performance information is usually overly simplistic and incor-
rect. Performance data is ambiguous and subject to disagreement. Performance in-
formation is not definitive, and interested actors interact in a dialogue to establish
its meaning. This insight informs the next three chapters, which develop the in-
teractive dialogue model of performance information use.

Why interactive? Why dialogue? Dialogue works as an alternative to the mecha-
nistic metaphor of decision making in performance management doctrine, and it
also captures multiple elements of an alternative theory of performance information.
My case findings show that performance information is used, though not systemat-
ically. The presentation, exchange, and interpretation involved in a dialogue reflect
the fact that this is a theory of information use, not a theory of why information is
not used. This use has a clearly interactive component. Managers using performance
data have never done so as a solo exercise, creating, interpreting, and acting on a
piece of information by themselves. They create or use it at the behest of more sen-
ior officials, in conjunction with colleagues as they search for solutions, or to control
other actors. The creation and use of performance information is, to use Wildavsky’s
term, a form of social interaction.2 In contrast to centralized planning by a dominant
actor, social interaction models are characterized by actors with discretion, interests,
and the capacity to express their perspectives. Actors come to agreement through bar-
gaining rather than arriving at some definitively correct decision.3 Wildavksy also
identified how institutional roles shape behavior, an observation I extend to exam-
ine how roles influence the use of performance information.4

Interactive dialogue evokes the social aspects of performance information use.
Information is exchanged between multiple parties, suggesting the potential for

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multiple interpretations of information. Information is not static, but is created
and presented to have an impact on another actor, who may in turn respond with
his or her own interpretation of events. The meaning of information for different
actors is established in the exchange. Interactive dialogue therefore implies the am-
biguity and subjectivity in the construction of meaning. In the same ways that
some interactive dialogues lead to agreement, and some crystallize conflict, the ex-
change of performance information can sometimes lead to greater agreement and
coordinated action between parties and sometimes do little more than reflect the
different positions of the actors involved.

A final advantage of the term interactive dialogue is that it suggests that per-
formance information is part of a political conversation between actors. Majone
points out, “As politicians know only too well but social scientists too often forget,
public policy is made of language. Whether in written or oral form, argument is
central in all stages of the policy process.”5 Because the dialogue is political, its im-
pact is neither determinative nor easy to predict. The impact depends on the po-
litical makeup of the actors involved—the positions they advocate, the roles
represented, and the different levels of power and resources possessed. In short, the
term interactive dialogue clues us to look at what information is being presented,
by whom, under what conditions, the meaning it is intended to generate, and the
affect on other actors.

One clear implication of the interactive dialogue approach is that actors in the
policy process who use information need to know the craft of constructing an ar-
gument. A good craftsman does this effectively and competently; a bad one loses
credibility because of incompetence.6

This chapter begins by looking at how performance information is used in one
specific decision forum, the budget process, to understand performance informa-
tion use more broadly. Drawing on evidence from state governments and previous
theories, I develop the basic assumptions of the interactive dialogue model of per-
formance information use.

The Lack of a Performance Budgeting Theory

The concept of performance budgeting is bedeviled with definitional vagueness
and a lack of an operational theory. In 1940 Key noted that the basic problem with
budgeting was that it lacked a theory that would allow budgeteers to determine “on
what basis shall it be decided to allocate x dollars to activity A instead of activity
B.”7 The doctrine of performance management suggests that performance infor-
mation provides the basis for making these choices. Performance data offers us
more information, but it is a mistake to assume that performance information re-

96 Chapter Six

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solves Key’s quandary. First of all, it is difficult to allocate costs to performance, al-
though governments are improving at this skill. Second, decision makers often
disagree on what constitutes an acceptable measure of performance and are espe-
cially unlikely to find acceptable units of comparison across different types of pro-
grams. Third, even if decision makers can agree on what measures of performance
to use, they are still likely to disagree on the relative value of different program per-
formance. For example, for some legislators an increase in spending on education,
instead of transportation, is worthwhile if it can prompt a small increase in liter-
acy. For others, the benefits of spending on a new road are obviously superior.

To some extent it is misleading to talk about performance budgeting as distinct
from performance management. The budgeting process includes execution, which
is really just another name for management. Central budget officials at the state
and federal levels argue that one of the key functions of performance information
is for management purposes, and they express hope that managers are using it. So
how is performance budgeting different than performance management, if at all?
If it has any meaning at all, performance budgeting must include budgeteers using
performance information to make resource allocation decisions. How should they
use it? The failure to resolve this question serves as an impediment to creating a spe-
cific and distinct definition of performance budgeting, as we saw in chapter 1.
While the concept of linking performance information to resource allocation is
widely supported, the extension of this idea to its logical conclusion of a strict
model of performance budgeting is not.

If a strict theory of performance budgeting is not acceptable, what are the al-
ternatives? A looser standard for performance budgeting is to hope that it fosters
allocative efficiency, tying resources to where the money will be most effectively
spent. Greater knowledge about the performance of programs and process allows
more informed allocation decisions. Budgeteers and elected officials, less con-
cerned with tracking inputs, have more time to focus on providing allocations ac-
cording to strategic goals, observing whether these goals are achieved and holding
managers accountable for results.8

But the concept of allocative efficiency is not a theory of performance budget-
ing for a number of reasons. First, allocative efficiency is a goal, not a theory of how
budgeteers behave or even of how they should behave. Second, the concept is ab-
stract and inherently subjective. Allocating resources is at the heart of the political
process and provides a critical power to elected officials. If budgeting is indeed
about allocating values, defining what allocative efficiency looks like will be an ex-
ercise in subjectivity.

Previous experience with budget reform suggests that a relatively loose link be-
tween performance information and resource allocation, with particular empha-
sis on the budget execution stage, may be as much as we can reasonably expect

Interactive Dialogue Model of Performance Information Use 97

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from performance budgets. The unrealistic ambitions of previous reforms set the
stage for dashed expectations.9 These failures were best explained by incremental-
ism theory.10 Incrementalism identified the importance of political values in deci-
sion making and the importance of previous decisions or allocations in guiding
current decisions. In a political environment, elected officials face pressing claims
for their attention and support, including party policy, interest groups, constituent
wishes, media views, and competing policy issues. A comprehensive use of per-
formance information is beyond limited human cognitive capacities, leads to in-
formation overload, and is a distraction for policy analysts. Instead, moderations of
previous agreements serve to simplify problems and limit political conflict. Incre-
mentalism ultimately suggests that performance information does not matter, hence
the continuing failure of overly mechanical and rational models of performance
budgeting.

The failure of the strict model of performance budgeting to reflect reality has
not led to the abandonment of calls for performance information systems. Some
simply discount evidence of failure or suggest that it is because the reform has not
been fully implemented. One central agency official in Virginia discussed how
counterparts in other states deal with what they perceive as their continuing fail-
ure to properly implement performance management:

You know they pretty much have ingested it and are working the party line with-
out really realizing what it means. [They say,] “You know it’s a little frustrating
sometimes. Yeah, it could be better. We’re going to try. We’re going to keep work-
ing on this. We’re going to do the training next year and then we have these new
forms that are coming out” . . . They don’t think that it’s the theoretical construct
[that is the problem]. I think they still believe that that’s what’s supposed to
work. Either they’re doing something wrong or they haven’t had the training. . . .
You know, the logic is airtight, so they’re going to hang on to it.

If the strict model is unrealistic, perhaps we need to set more achievable goals
for performance management, consistent with the idea that it is desirable to have
performance information in the decision mix, but that it is unlikely to be deter-
minative. Joyce argues that instead of striving for performance-based budgeting,
we should seek to improve models of “performance-informed budgeting.”11 Lauth
argues we should not expect that performance information will ever offer a sys-
tematic guide to budgeting, and so instead we should ensure that budgets are
“friendly” to productivity improvement efforts.12 Melkers and Willoughby suggest
that we should consider communication as an interim or initial goal of perfor –
mance management, and they find that there is moderate support for this concept
in a survey of state budgeteers and agency staff.13 Chris Wye of the GAO notes:

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In no other context would we have the least hope that the use of information
would determine the course of decisionmaking. At most, we would expect it to
inform the decisionmaking process. Where indicators are concerned, however,
we expect a perfect world where truth not only speaks to power but tells it what
to do. . . . The true standard should be whether or not performance information
is taken into account in the decisionmaking context, not whether it is the basis
for a given decision (italics in original).14

The common element in these observations is that a plausible theory of per-
formance budgeting rests on a realistic expectation that performance data informs
dialogue but is not deterministic. Evidence on performance budgeting from state
governments is consistent with this view. This evidence also points to the impor-
tance of roles and advocacy in the use of performance information, moving us
closer to an interactive dialogue model of performance information use.

Evidence from the States

In searching for a theory of performance budgeting, let us return to the state level.
In all three states studied, reform advocates described their reforms as performance
budgeting, reflecting a deliberate effort to tie the creation and diffusion of per-
formance information to the budgeting process. Evidence suggests that actual use
of information lagged the sophistication of performance information systems, was
episodic rather than systematic, and largely occurred at the agency level rather than
among statewide actors.

This data is consistent with previous research. Aristigueta finds little evidence
of use of performance information for resource allocation in the three state gov-
ernments she examined, which included Virginia.15 Joyce and Tompkins find that
performance information may be used by managers when allocating resources or
might enter the legislative budget debate, but has a marginal influence.16 The GAO
studied perceived leaders in performance management in the states and could find
instances of where performance information was used, but cautioned that “none
of this information, however, led to automatic budget decisions. Instead, it helped
to inform budget deliberations by highlighting problems, supporting claims, or
enriching the debate.”17 Florida, another perceived leader in performance budget-
ing, has had organizational and technical problems in its system, and the key ben-
efits appear to have come at the agency level.18

The repetitive nature of performance budgeting requirements underlines their
lack of success. For instance, in Alabama, Governor Siegelman pursued new per-
formance budgeting requirements even though existing ones were in statute, albeit

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largely ignored. Florida and Texas have switched from performance budgeting to
zero-based budgeting (ZBB). ZBB recalls President Jimmy Carter’s efforts to re-
quire the federal government to assume it starts with zero resources and to justify
all programs. Carter had used the same budget model in Georgia, but closer in-
spection suggested that it had never really been applied in any significant way in
Georgia or at the federal level.19 ZBB, if actually implemented, abandons the
heuristics of incremental budgeting that make the process manageable. ZBB also
rejects the premise that performance information is important. If performance
budgeting is based on the idea that more information makes for better budget de-
cisions, ZBB takes the opposite approach, assuming that a reliance on information
has failed to prompt budgeteers to consider the fundamental question of whether
something is worth funding or not. That two states regarded as leaders in per-
formance budgeting have turned their attention to ZBB is not a positive sign for
performance budgeting, as budgeteers abandon a seemingly failed reform to reach
back to the 1970s for one that defies the basic logics of budgeting.

The absurdity of ZBB was illustrated by the Texas budget proposal for fiscal years
2003–5. Instead of recommending dollar amounts, the proposed budget simply
featured row after row of zeroes for each program and spending item. As the docu-
ment was distributed, budgeteers quietly ignored it and returned to the actual
process of allocating resources by looking at how they had done so in the past.

The findings from three state cases do not repudiate the view of previous em-
pirical work or offer support for the strict model of performance budgeting. On
the contrary, there was strong evidence of incrementalism and the low priority
given to performance information. However, evidence from all three cases identi-
fies one major use of performance information in resource allocation by agency
representatives: as a means of advocating for policy issues and defending and ex-
panding their budget. DOC staff in all three cases, even at the institution level,
viewed defending and expanding resources as a primary use of performance infor-
mation. They were encouraged in these beliefs by central agency officials and con-
sultants promoting performance reporting requirements. One corrections
manager in Vermont put it this way: “I think it provides a hell of a defense. When
people come to rob you of resources of any kind, you can at least say this is what I
need, this is where we are going, this is our plan. This is what you are going to do;
this is the impact you will have on our plan.”

A central budget official in Vermont echoed this view:

Performance measurement helps make the best argument for your programs. An
example is human services. . . . That guy [agency head] had done a lot of good
measurement, could tell you immediately how much it would cost, how many
widgets, and he could also tell you his success or his outcomes for his various pro-

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grams. And he did so well that normally he pretty much gets what he wants. He
is pretty fiscally tight, but he really defends his purposes well. And another one
who did it who does not usually do it is community colleges. They did the same
thing. They basically strongly defended their policies and what they could do.
And they were the two types of agencies that are normally least able to defend
their programs. So I have seen people do it well. It’s possible. I think it’s the
biggest help to anybody who is trying to defend their budget, to be honest.

Agency officials will use performance information in ways that call for increased
funding. As one central budget official asked, “What agency in their right mind is
going to include measures that are going to reduce the chance of success in getting
their damn money?” For corrections, any help in winning resources is badly needed.
Corrections is not a popular function. While many elected officials and members
of the public want to see criminals given significant jail time, the resources required
are given reluctantly. Without strong stakeholder support, performance informa-
tion is an alternative way to persuade executive branch and legislative budgeteers to
increase resources. Agencies use performance management to portray efficiency and
effectiveness in management practices, and they emphasize needs by pointing to
input measures or workload indicators, or output/outcome goals that require more
funding. For example, the Virginia DOC strategic plan states: “Through the de-
velopment of a strategic planning process in 1996 the Department of Corrections
has achieved significant efficiencies in critical cost areas. The analysis of internal
processes has enabled the Department to operate some programs with internal
funding generated by more cost-effective operations.”20

The claim is made in the context of a plea not to cut resources because the system
is as efficient as it can be: “We have carefully reviewed all agency resources in prepar-
ing the strategies supporting our critical issues. We believe that further reallocation
of existing resources will jeopardize the integrity of our public safety mission.”21

How performance information was used varied to some degree in each state. Vir-
ginia used measures of efficiency and effectiveness to underline that performance
management enabled cost cutting and high-quality service, and that any additional
cuts were unwise. Vermont, meanwhile, used outcome measures that underlined the
effectiveness of department-led experimental programs relative to traditional ap-
proaches in terms of lower cost and recidivism, and developed positive measures for
corrections (e.g., postincarceration employment, hours, or dollar-value returned to
the community). Alabama used measures intended to illustrate the state’s desperate
need for resources. Measures were largely inputs (e.g., number of officers, number of
inmates, or workload indicators such as ratio of officers to inmates), and measures also
advertised the need for additional inputs (e.g., percentage of state inmates in county
jails and beds not occupied because of employee vacancies). Measures pointing to the

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lower costs of offenders diverted from the Alabama DOC system into alternatives to
incarceration sought to reduce the flow of offenders into state facilities.

Basic Assumptions of the Interactive Dialogue Model

Proposals to integrate performance data and budgeting tend to assume that per-
formance information is objective, standardized, indicative of actual performance,
consistently understood, and prompts a consensus about how a program is per-
forming and how it should be funded. The experience of the three states described
above is contrary to these assumptions. Performance information is used, although
not in a systematic manner. It is often presented by advocates seeking to support
a predetermined position, trying to persuade others to look at the performance in-
formation they consider important and see it in the way that they do. The inter-
active dialogue model presented here seeks to fill this gap. It is based on a number
of assumptions:

• Performance information is not comprehensive.
• Performance information is ambiguous.
• Performance information is subjective.
• Production of performance information does not guarantee use.
• Institutional affiliation and individual beliefs will affect selection,

perception, and presentation of performance information.
• The context of dialogue will affect the ability to use performance

information to develop solutions.

The interactive dialogue model assumes that simply because performance infor-
mation exists, there is no guarantee that it is used. Whether it is used, and how it is
used, depend on the motivations of potential users and utility of performance in-
formation to their goals. Because performance information will sometimes help to
advance an argument, it is likely to be used—but not in the simplistic or determin-
istic way assumed by the strict theory of performance budgeting. The interactive di-
alogue model points to the ambiguity inherent in interpreting performance
information. There is likely to be no single definitive approach to (a) interpreting
what performance information means and (b) how performance information directs
decisions. The meaning of performance information is constructed, and therefore the
same performance information can support different arguments. The use of infor-
mation will never meet some objective ideal according to Wildavsky because “the
choice of problems to be solved, as well as the alternatives considered, is not speci-
fied but must be worked out by particular people with individual interests.”22

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The assumptions outlined above draw from previous theories. First, the study
of organizations provides evidence of the ambiguity inherent in organizational life,
the constructed and contested nature of discourse, and the potential for rival in-
terpretations of performance information. Second, we know from the study of the
policy process that the design of the budget process creates incentives for particu-
lar actors to advance arguments that reflect their institutional role and context, en-
hancing the potential for disagreement. Third, there is some limited evidence that
the nature of dialogue routines affects the type of discussion and solutions gener-
ated. These theories are examined in turn.

Ambiguity in Organizational Life

The study of organizational life reveals its deep-seated ambiguity. 23 Feldman de-
fines ambiguity as “that state of having many ways of thinking about the same cir-
cumstances or phenomena.”24 Ambiguity is likely to occur in issues where
objectives or issue-definition is unclear, where there is a lack of clarity on causal
mechanisms between organizational actions and outcomes, where it is difficult to
interpret the past, and where the pattern of individual participation in different de-
cisions is uncertain and changing.25

While more information might reduce uncertainty, it will not eliminate ambi-
guity, since ambiguity is created by different perspectives rather than a lack of in-
formation. Feldman suggests that ambiguous issues must be interpreted, a process
by which actors give meaning to the issue: “Resolution is a matter of agreement
rather than proof. To the extent that resolution occurs, it comes from shared un-
derstandings, not factual information.”26 While information helps actors interpret
a policy issue, it does not necessarily foster consensus on decisions. According to
March: “Organizational information processing seems to be driven less by uncer-
tainty about the consequences of specific decision alternatives than by lack of clar-
ity about how we talk about the world—what alternatives there are and how they
are related to stories we think we understand, how we describe history and how we
interpret it.”27

Another approach to studying organizational life is to study its discourse, or how
texts are created and exchanged between organizational actors. The literature on or-
ganizational discourse and narratives focuses on the ambiguity of these texts and as-
sumes that the attitudes and behaviors of organizational actors are shaped by the
discursive practices in the organization. Consistent with the literature on discourse
is the growing attention to the concept of constructed narratives in political science
and public policy.28 These accounts present narratives as both a tool and reflection
of political power, crafted to fit information in the context of a coherent story about
a particular policy. This social constructionist approach represents what Fischer and

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Forrester have termed the “argumentative turn” in policy debates.29 Majone has
made a similar point about policy analysis, which “has less to do with formal tech-
niques of problem solving than with the process of argument.”30 Central to these
perspectives is the idea that discourse is constructed by actors and is intended to in-
fluence others. Each text is rife with unspoken assumptions, although each text is
also susceptible to rival interpretations.31

Performance information is as susceptible to social construction as other forms
of discourse. Deciphering what constitutes performance can be difficult. Such vari-
ation in interpretation will increase when we face even trickier questions. What
does performance mean? What are the next steps for the program? How should we
budget on the basis of performance information? While performance information
tells us something about a program, the data itself does not answer these ques-
tions.32 Performance data, or simplified assessments of performance data, fails to
tell us

• why performance did or did not occur.
• the context of performance.
• how implementation occurred.
• an understanding of outside influences on performance.
• how to choose which program measure is a priority.

The absence of this information makes it difficult to determine what performance
actually means. Analysts are usually stuck with interpreting whether performance is
satisfactory in light of previous performance or some target, implicit or explicit.

Even if you and I can agree on an appropriate performance measure and also
agree on what the data means, we may still disagree on what to do next. Various
plausible and logical options usually exist.33 One person might decide that the type
of action appropriate for the program is related to funding, where another sees a
management problem. Even if two individuals agree that performance information
should influence resource allocation, performance data does not tell us how. The
classic example is a program with poor performance. According to Wildavsky:

There are always competing explanations about why policies fail that may leave
decision-makers uncertain over whether to abandon them. One hypothesis is
that the theory behind the policy is bad and the more that is done the worse
things will get. The other hypothesis is that the critical mass has not been
reached. If more of the same thing were done then the policy would ultimately
show good results. . . . If the ostensible purpose of a policy has not been achieved
or does not seem worth the cost, one can usually discover other collateral ob-
jectives that have, in fact, been accomplished.”34

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Should funding be cut and the program abandoned as a failure, or should more
resources be provided to help make the program a success? The ability to answer this
question depends a great deal on our understanding of why performance failed to
occur and whether it can be remedied, issues that are subject to disagreement. Val-
ues play a role. We are less likely to abandon programs that we feel have an impor-
tant purpose.

Numbers fail to reflect trade-offs in public policies. Programs often have mul-
tiple goals that sometimes conflict with one another. As a result, the same program
can be judged a success or failure depending on which measures are considered.
Heinrich and Fournier’s evaluation of which substance abuse programs were suc-
cessful changed depending on the outcome measure used, leading them to ob-
serve: “The important question is not ‘What structure or type of program
treatment works best?’ but ‘What aspects of organization and treatment services
work for whom, in what context, and toward what treatment goals?’”35

One response to the problem of trade-offs between goals is to pursue a type of
comprehensive measure of performance that takes into account the multiple goals
of a program. The PART described in later chapters is one such approach, and
comprehensive measures are increasingly popular in the United Kingdom. The
appeal of such a measure is the promise of converting the complexity of public pro-
grams into a fair and simple measure of success. But such comprehensive scores are
still socially constructed. Questions of what to include and what weighting to as-
sign to different parameters will significantly shape the overall score.36 A study of
comprehensive scores for local government and the health sector in the United
Kingdom found that relatively minor changes in methods to construct the scores
had significant impact on measured outcomes. Belying the reassuring idea of com-
prehensiveness, the authors of the study argued that the level of uncertainty and
contingency associated with these measures should be better advertised.37

Given the ambiguity of performance information, we should put aside any as-
sumption that performance information will make decisions simpler. Even if we ac-
curately understood in advance the cost and outcomes of programs, that still does
not provide a common basis for comparison since our willingness to fund services
and specific levels of performance will depend on values. Indeed, the introduction
of performance information simply adds related contextual questions: how do we
know if more money will improve performance or be wasted? More broadly, how do
we understand performance information, and how do we relate it to action?

The Role of Roles

Intelligent individuals with no particular axe to grind can disagree with one an-
other about what performance information is appropriate, what it means, and

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what action it suggests. The potential for ambiguity to lead to disagreement be-
comes stronger in a political setting. In politics, actors play roles. They are repre-
sentatives of ideologies, parties, programs, groups of citizens, organizations, and
political institutions. This makes it more likely that the ambiguity of performance
information will be exposed and used for subjective purposes. Consider the fol-
lowing example from a central agency official in Virginia, illustrating the impor-
tance of different perspectives in defining a policy issue.

The challenge is to try to develop consensus on the objectives. Virginia has a sys-
tem of mental health hospitals—over-capacity, under-utilized, expensive. We’ve
had a terrible time trying to develop a restructuring plan for that system because
. . . from the administration’s perspective it’s more of an efficiency issue, capac-
ity issue. To the politicians, it’s more of an economic development issue with the
payroll in those places.

How an individual interprets and understands information will be shaped by
their role. March and Olsen argue that individual behavior and preferences are en-
dogenous to the organizational context of the individual.38 Conditions of ambi-
guity and disagreement will therefore be exacerbated across political institutions
that are designed to check one another and represent opposing viewpoints. The po-
litical arena is characterized by battles between rival actors to assert hegemony over
issue definition.39

Brunnson has argued that organizations have strong incentives to use informa-
tion to communicate the importance of their services and the values they repre-
sent.40 As they seek to ensure that they present external values consistent with the
demands of a changing environment, organizations will manipulate information
to the point where external values may have only a weak relationship with inter-
nal ones. As long as the external values secure the legitimacy of the organization,
and its funding, such an “organization of hypocrisy” is a natural and useful strat-
egy. The use of performance information offers a means to communicate specific
values, as exemplified by the different way that each DOC used performance in-
formation. Brunnson notes that few settings are better suited to the presentation
of arguments to legitimate programs than the budget process.41

Information selection and use occurs in the context of different beliefs, prefer-
ences, and cognitive processes, and they will reflect organizational power and pol-
itics. Information providers will try to shape outcomes by choosing what
information will be collected and highlighted. Each measure is representative of
values and accompanied by the assumption that the organization should be mak-
ing efforts that will have an impact on the measure.

Information can be used to advocate for a future state of affairs—and as a means
to rationalize past behavior. Rationalizations are an important part of political dis-

106 Chapter Six

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course, justifying behaviors in the context of the public interest and seeking ac-
ceptance of these behaviors from others.42 Multiple goals allow actors to retro-
spectively emphasize some objectives over others, a way of changing without
appearing to change.43

March succinctly summarizes the potential to use information to represent val-
ues: “Information in organizations is not innocent.”44 Stone makes almost exactly
the same point: “No number is innocent, for it is impossible to count without
making judgments about categorization.”45 Stone notes that numbers are a fre-
quently used symbol in establishing political narratives: “Numbers in politics are
measures of human activities, made by human beings, and intended to influence
human behavior. They are subject to conscious and unconscious manipulation by
the people being measured, the people making the measurements, and the people
who interpret and use measures made by others.”46 There can be political fights
about numbers in terms of what is measured, how it is measured, what the meas-
urement means. However, actors seeking to maximize the impact of numbers will
usually present them in a way that downplays rival interpretation by not discussing
how data was collected or what assumptions were made in creating information.47

Numbers can be used to tell stories, and sometimes to suggest that complex
phenomena can be precisely defined and controlled. Numbers are powerful and
offer the user a sense of authority because we associate data with objectivity and
professionalism. According to Stone:

In our profoundly numerical contemporary culture, numbers are symbolic of
precision, accuracy and objectivity. They suggest mechanical selection, dictated
by the nature of the objects, even though all counting involves judgment and
discretion. By the time we are adults, the categorization part of counting is so
much a second nature that we tend to forget about it. . . . Numerals hide all the
difficult choices that go into a count.48

The same number can have multiple meanings, making it contestable.49 To
make performance information understandable, it needs advocates. Advocates di-
rect attention to particular pieces of information, make sense of what it means in
terms of resource needs, and offer decision suggestions to their audiences. They
construct narratives and stories around what the performance information means
and what it suggests should be done. The manager tasked with preparing per-
formance information in the corrections field in Vermont commented:

Understand that it is a basic principle of human nature that human beings are
terrible statisticians, and especially orally. We do not understand numbers as
spoken words; we understand them a little bit better visually, but still not very
well. Understand that measuring policy is not a science. It is an art. It is words

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and pictures and numbers. And you create impressions, beliefs, understandings,
and persuasions.

Some authors have already begun to think about how performance or budget
information is framed. Radin has argued that information is not neutral, pointing
out that the many actors in a democratic setting are unlikely to agree on what is
true or false: “One actor’s ‘fact’ is another actor’s ‘value.’ This has a direct effect on
what is measured and how. When one scratches the surface, one is likely to find bi-
ases of various sorts within data systems.”50 Thurmaier and Willoughby note that
budget information can also be framed in multiple different ways, that the budget
process provides different actors with opportunities for mutual persuasion, and
that the intensity of preferences held by program managers regarding their pro-
grams will usually be stronger than those of elected officials. We therefore expect
to see different actors rely on different frames to present their agenda.51 Doing so
involves basic political skills. The limited relevance of performance information is
illustrated by the fact that a single dramatic event can have a much stronger im-
pact than a year’s worth of performance data. The following comment came from
a central budget officer in Vermont:

Agencies come in and make cases of things. And some are successful and some
aren’t. And some are successful because they are right and they’ve made good
case. Some are successful because they are just very good politicians themselves
and they manage to rise to the top. . . . They can measure what is going to move
people, and if they see there is a hot button here in the state [they will use it]. In
Vermont right now we had a sixteen-year-old girl who was found dead in the
Bronx or Brooklyn, New York. Turns out she had been taking heroin, prostitut-
ing herself, and ended up dead. This year and the next year, the commissioner
of Social and Rehabilitation Services, it’s a no-brainer for him to come in and
say, “I need money for this kind of program. We are going to have to look at it.”
. . . Because it’s a very popular issue right now in the legislature as well “What
are we going to do about the sixteen- and seventeen-year[-old] kids that are in
trouble?” They [the agency] go to legislature and they can say, “This is our
budget and the administration also supports this new program for runaway
youths.” [If the administration does not support it,] they can go in and they say,
This is our budget and somebody will clearly ask them—they do every year—
“and what else did you see that was important for your agency to deal with that
you just don’t have the money to deal with?” And they’ll go: “runaway youth pro-
grams.” And all of the sudden the legislators will go: “Wait a minute, the ad-
ministration didn’t support this? We’ve been reading about it in the newspaper
every day? How can they not see that is an important area?” . . . You can get

108 Chapter Six

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something that gets to the top of [the] list not so much because you know in a
perfect world that [it] would have risen to the top but because a manager is look-
ing at the process. He is looking at who is going to be involved in making the
decision, where they come from, what moves them.

Research in psychology points to a confirmation bias in the selection and use
of information in decision making—once decision makers have made up their
minds on an issue, they will seek out information that supports their views and dis-
count contrary information.52 This insight helps us to understand why preferences
formed by institutional norms become hard to displace, influencing the selection
and perception of performance information. Confirmation bias can even affect
the perception of the same information, with research finding, as Nickerson puts
it, that “two people with initially conflicting views can examine the same evidence
and both find reasons for increasing the strength of their existing opinions.”53

The organizational discourse literature offers some insights into how roles shape
how texts are created and whether they become embedded in discourse, that is,
widely used by a target audience. Organizational actors are more likely to create texts
that reflect actions that burnish their image, and so it is not surprising that organi-
zations are likely to produce performance data in a way that makes them look effec-
tive or supports some other type of organizational argument. However, the existence
of competing texts and rival perspectives lowers the potential for acceptance. There-
fore, in an environment where actors represent different views and offer different in-
terpretations, there is less chance of any single interpretation dominating. This is an
important observation, given the pluralistic tendencies of public dialogue.54

Political roles shape how actors interpret, present, and use performance infor-
mation. Conflict in interpretation will also be fostered by the norms and incentives
associated with particular roles in the budget process, and observers of the budget
process have noted how individuals tend to conform to role expectations.55 Over-
sight committees will mix advocacy with a desire to exercise control over the
agency. Central agency staff, the traditional guardians of the purse, are expected to
manage and verify agency claims about performance and the implications for re-
sources. In practice, central agency staff undertake this role of enforcer of mea –
surement quality with varying degrees of intensity, although the role of the OMB
during the George W. Bush administration represents a high watermark for such
central control at the federal level (see chapters 7 and 8 for more detail).

Agency staff are likely to be advocates, using information to cast the agency in the
best possible light and to argue for more resources. Sometimes the use of perfor –
mance information goes beyond advocacy. Agencies have been found to select goals
that will cast the agency in a favorable light, ignoring or dropping unflattering mea –
sures or goals over which they have limited control.56 Agencies may “spin,” or

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creatively interpret, measures.57 Agencies may engage in the “churning” of measures,
that is, changing such a high proportion of measures from year to year that it becomes
difficult to identify cross-time comparisons.58 In some instances, bureaucrats have
been found to manipulate, distort, or simply lie about performance measures.59

One empirical example of how roles shape perspectives comes from a survey of
state budgeteers and agency practitioners. Asked what were significant problems
in performance measurement, 40 percent of agency practitioners point to “too
many factors affect the results trying to be achieved,” while only 14 percent of
budget staff considered this to be a significant problem.60 Clearly agency staff are
more concerned with considering how outside factors shape performance results
than budgeteers.

Dialogue Routines

The ability to persuade others depends a good deal on communication opportu-
nities, or dialogue routines. DeHaven-Smith and Jenne argue that the treatment
of discourse in public management has been limited, largely focusing on the ways
in which participation opportunities are used to placate employees and the gen-
eral public, and overlooking the ways in which discourse can actually affect deci-
sions.61 But the nature of such routines does matter. For example, Thurmaier and
Willoughby found that states with regular and frank briefings between the gover-
nor and budget staff saw a stronger sense of budget staff affiliation with the gov-
ernor and stronger policymaking capacity. Communication that allowed a closer
relationship with the governor allowed state budget officers to have a higher per-
centage of their recommendations accepted, in part because they have a greater ca-
pacity to be persuasive and in part because they were more in tune with the
preferences of the governor.62

Dialogue routines are important, in part, because managers tend not to spend
their time reading performance data, but instead prefer verbally expressed infor-
mation that is detailed and current.63 Dialogue routines require a commitment of
time by staff and a setting where performance data that might otherwise be ignored
is considered. The interaction between knowledgeable staff can generate innova-
tions and solutions that would not occur if such staff were acting by themselves.
Such routines provide an opportunity to access information, make sense of this in-
formation, and persuade others.

Dialogue routines are important, not just because they prioritize performance
information and identify solutions, but because they can change the attitude em-
ployees hold toward their tasks. DeHaven-Smith and Jenne point to Habermas’s
theory of communicative action to suggest that structured discourse can shape val-
ues and motivations, pointing to the “tendency for people to feel bound by their

110 Chapter Six

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promises, to give reasons for their beliefs and actions, and to accede to the better
arguments and more justifiable claims of others.”64 Dialogue forms a basis of so-
cial cooperation, and people feel committed to the agreements researched in such
a context.65 Interactive dialogue therefore acts as a social process that helps to cre-
ate shared mental models, has a unifying effect, and helps to develop credible com-
mitment for the execution phase.66

However, such routines appear to be rare in public discourse. The previous sec-
tion on the role of roles suggests that the ability to foster problem-solving dialogue
is reduced when multiple actors from different institutional settings are engaged
because such a diversity of views reduces the ability to foster consensus. All else
being equal, dialogue routines that are less institutionally diverse are more likely
to feature the use of performance information to solve problems. For this reason,
traditional budget routines have a limited ability to create dialogue that will gen-
erate solutions. Agency staff or stakeholders presenting information to the central
budget office or testifying before the legislature have good reason to act defensively
and will rarely address operational questions. In such situations, the trademark of
interactive dialogue will be advocacy. Information will be used strategically by ad-
vocates who are fully aware that they argue in a decision environment that does not
closely resemble a strict performance budgeting process.

Decision makers who receive budget information from agencies lack the time, in-
terest, and capacity to make decisions on resource allocation based on performance
information. The budget cycle is too short, and budgeteers have enough to do to
make budget decisions incrementally. It is nearly impossible for them to make judg-
ments on what mounds of performance information indicate for a particular func-
tional area. This is true even if only a handful of performance measures is reported.
There will never be enough information to substitute for the expertise and knowl-
edge to enable substantive judgments to be made, and there will always be too much
information for human cognitive processes to deal with. Of course, advocates are bi-
ased in their assessments, but all parties are aware of this, and it does not mean that
they are wrong. In fact, the greater the degree to which they can use performance data
to support their position, the less biased and more rational they appear.

The Interactive Dialogue Model and Decision Making

What does the interactive dialogue model tell us about decision processes and out-
comes? In cross-institutional settings, there will be a variety of actors with differ-
ent interpretations of performance data, each making different arguments about
the actions implied. Incrementalism suggests that cognitive limitations eliminated
the role of performance information in debate.67 However, the interactive dialogue
model suggests that no single actor attempts to develop a full account of all

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performance information; instead one actor uses only the information that is help-
ful to make arguments convincing. By selecting information consistent with prior
preferences, advocates do not face an information overload. The actors using the
performance information have different positions, motivations, priorities, and un-
derstanding of what the data means and what actions should result from the in-
formation. In short, the use of performance information is a subjective exercise and
rarely removes much of the ambiguity from decisions. Once we incorporate the as-
sumption of roles and advocacy, we expect actors to selectively present perfor –
mance data in a context that supports their point of view and to discount
conflicting information. The political nature of decision making will interact with,
rather than be replaced by, performance information. Advocacy and ideology will
continue to shape allocation decisions, using performance information as a tool.
Rather than present information comprehensively, giving equal balance to all, ac-
tors will highlight specific pieces of data, offer plausible explanations for why per-
formance occurs, and suggest how it can be improved.

Performance information, when used, will not necessarily engender consensus
and agreement. This depends greatly on the homogeneity of the actors involved,
their interpretation of the data, their ability to persuade others, and their power in
the decision process. In some cases, what one group of decision makers concludes
is a reasonable interpretation and an appropriate response may be completely at
odds with another group looking at similar information. A simple example is how
different regions have reacted to performance information about welfare-to-work
programs. Fording, Schram, and Soss found that conservative regions in Florida
were more likely than liberal regions to impose sanctions on job-seekers and push
clients off the rolls if they received negative performance feedback.68 Performance
information mattered, but not in the same way for different groups.

The nature of the performance information is therefore not predictive of deci-
sions. Different actors might take the same set of performance data and offer plau-
sible and logical arguments for either option. In settings that limit a diversity of
institutional views, many of the problems that arise from performance informa-
tion ambiguity and subjectivity are reduced because there is a reduced incentive
and potential for advocacy.

A model should be able to offer some falsifiable hypotheses. Based on the as-
sumptions of the interactive dialogue model presented above, and the supporting
literature, the following hypotheses about performance information and decision
making emerge:

• Different actors can examine the same programs and come up with
competing, though reasonable, arguments for the performance of a
program based on different data.

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• Different actors can examine the same performance information and come
up with competing, though reasonable, arguments for what the
information means.

• Different actors can agree on the meaning of performance
information/program performance and come up with competing solutions
for what actions to take in terms of management and resources.

• Actors will select and interpret performance information consistent with
institutional values and purposes.

• Forums where performance information is considered across institutional
affiliations will see greater contesting of performance data.

• Use of performance information can be increased through dialogue
routines.

Conclusion: Assessing the Interactive Dialogue Model

Observations about the use of performance information at the state level prompted
the search for an alternative model of performance information use. The next
chapters seek to offer additional evidence to support this model. The range of ev-
idence does not constitute a definitive proof of the model but supports the hy-
potheses above. Coming from multiple sources, the evidence therefore suggests
that the model has a basic validity.

The next chapter narrates the development of new performance information by
the George W. Bush administration and the resistance to the use of this information
by Congress. Content analysis of congressional discussion of programs finds little dis-
cussion of performance. Congress has largely ignored new program evaluations and,
in some cases, explicitly resisted the inclusion of more performance information in
agency budget submissions at the expense of traditional forms of budget informa-
tion. This is not just a federal issue. State legislators have pointed to distrust in exec-
utive branch data as a reason that they do not use the information.69 Not surprisingly
then, states where legislators have ownership of the performance management
process and play a role in verifying performance information also see greater legisla-
tive use of that information.70 These behaviors support the idea that the institutional
setting makes a difference in the perception and use of performance information and
that performance information produced by one institutional setting will may be ig-
nored, resisted, and distrusted in another setting.

Chapter 8 examines the ambiguity and subjectivity of performance informa-
tion. The Bush administration’s PART evaluations provide an intriguing case to ex-
amine this issue, since the tool strives to be a transparent and objective way to
assess program performance. The PART has prompted an evidence-based dialogue

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within the OMB itself and, in some instances, between the OMB and agencies. In
other cases, agencies disagree with the OMB on the relevance of different types of
performance information or evaluations, on the significance of such information
for performance ratings, and on the significance of program ratings for perfor –
mance. This illustrates the potential for ambiguity and subjectivity of a tool such
as PART. Even within the OMB itself, the ambiguity of PART explains why OMB
raters are not always consistent in evaluating programs. Chapter 8 also presents an
experiment that illustrates how multiple actors can assess the same program and
performance information and come to different but logical conclusions about how
well the program is performing and what its budget should be. The chapter there-
fore provides both experimental evidence and evidence from assessing the use of
PART of the ambiguous and subjective nature of information, the efforts of dif-
ferent actors to construct the meaning of that information, and the role that insti-
tutional setting plays in selecting and interpreting information.

Chapter 9 seeks to find positive contributions that the interactive dialogue
model might have in fostering the use of performance information. To the extent
that PART created an evidence-based dialogue, it did so by establishing new dia-
logue routines, where members of the OMB and agencies had to interact with one
another. The experience of dialogue routines in Virginia and Vermont suggests
that they can foster the use of performance information and identifies the charac-
teristics of successful routines. Chapter 9 returns to the question of what makes di-
alogue routines successful. Dialogue routines are more likely to generate consensus
and actionable solutions when they are agency/service centered, frequent, bring to-
gether authority (high-level actors) and operating knowledge (low-level actors),
place pressure on actors to consider performance of their unit, and avoid defensive
reactions.

Notes

1. For example, OMB’s Circular A-11 budget guidance describes program assessment as “a
determination, through objective measurement and systematic analysis, of the manner and ex-
tent to which Federal programs achieve intended objectives” (this information can be found at
www.whitehouse.gov/omb/circulars/a11/current_year/s200 ). GPRA also calls for “more
objective information on achieving statutory objectives, and on the relative effectiveness and
efficiency of Federal programs and spending” and requires that agencies express goals “in an
objective, quantifiable, and measurable form.” (The language of GPRA can be found at
http://govinfo.library.unt.edu/npr/library/misc/s20.html [accessed February 2, 2007]).

2. Wildavsky, Speaking Truth to Power.
3. In some ways, I use the idea of social interaction in ways that differ from Wildavsky. He

portrayed social interaction as a democratic mechanism by which local governments and citi-

114 Chapter Six

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zens could provide feedback to the center on the plans they had imposed on them. My concep-
tion of interaction is a little different. I am especially interested in interaction among members
of the central agencies, agency staff, and political officials of the legislative and executive branch.
I place less emphasis on the normative democratic elements of dialogue (though I believe that
incorporating the views of implementers is almost always a good thing) than on its inevitability,
and its inevitable subjectivity, given the range of people involved and their institutional loyal-
ties. Wildavsky sometimes portrays rational analysts as battling political outcomes created by so-
cial interaction (e.g., “practitioners of policy analysis seek to have it neither absorbed into social
interaction not substituted for it,” Speaking Truth to Power, 126), whereas the work presented
here suggests multiple rationalities can coexist among analysts. Overall, however, I consider these
differences to be distinctions of emphases and subjects studied. I see my work as building on Wil-
davsky, rather than contradicting him.

4. Interestingly, the focus on roles that is so prevalent in his budgeting work is not repeated
in his later discussion of social interaction models, and so I am drawing on different theories of
Wildavsky to understand the use of performance information. Wildavsky and Caiden, The New
Politics of the Budgetary Process, 5th ed.

5. Majone, Evidence, Argument, and Persuasion in the Policy Process, 1.
6. There are different perspectives on what constitutes an effective argument. Majone sug-

gests that the key skills in crafting an argument are “the ability to probe assumptions critically,
to produce and evaluate evidence, to keep many threads in hand, to draw for an argument from
many disparate sources, to communicate effectively.” See Majone, Evidence, Argument, and Per-
suasion in the Policy Process, 22. Majone notes that there are many pitfalls or fallacies that can lead
the analyst to make mistakes. Some of the most common pitfalls are focusing too much on
mathematical models and technical language, using an overly formalized presentation style, and
using data that is inadequate for the task. There is a broader literature on argumentation theory,
e.g., Toulmin, The Uses of Argument; Walton, Plausible Reasoning in Everyday Conversation.
Doug las Walton has argued that it is possible to assert standards for argumentation even when
bias exists, One-Sided Arguments.

7. Key, “The Lack of a Budgetary Theory,” 1138.
8. Grizzle, “Linking Performance to Decisions.”
9. Joyce, Linking Performance and Budgeting.

10. Wildavsky, Budgeting: A Comparative Theory of Budgeting Processes.
11. Joyce, Linking Performance and Budgeting.
12. Lauth, “Budgeting and Productivity in State Government.”
13. Melkers and Willoughby, Staying the Course, 2–4.
14. Wye, “Performance Management for Career Executives.”
15. Aristigueta, Managing for Results.
16. Joyce and Tompkins, “Using Performance Information for Budgeting.”
17. U.S. Government Accountability Office, Performance Budgeting: States’ Experiences Can

Inform Federal Efforts, 14.
18. Berry, Brower, and Flowers, “Implementing Performance Accountability in Florida”;

VanLandingham, Wellman, and Andrews, “Useful, But Not a Panacea.”
19. Lauth, “Zero-Based Budgeting in Georgia State Government.”

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20. Virginia Department of Corrections, Strategy Performance Budgeting Plan 2000–2002,
F.1.

21. Ibid.
22. Wildavsky, Speaking Truth to Power, 14–15.
23. March and Olsen, Ambiguity and Choice in Organizations.
24. Feldman, Order Without Design, 5.
25. March and Olsen, Ambiguity and Choice in Organizations.
26. Feldman, Order Without Design, 144.
27. March, “Ambiguity and Accounting,” 160.
28. Bridge and McManus, “Sticks and Stones”; Bridgman and Barry, “Regulation Is Evil”;

Callahan, Dubnick, and Olshfski, “War Narratives”; Flood, Political Myth; Roe, Narrative Pol-
icy Analysis; Peelo and Soothill, “The Place of Public Narratives in Reproducing Social Order.”

29. Fischer and Forrester, eds., The Argumentative Turn in Policy Analysis and Planning.
30. Majone, Evidence, Argument, and Persuasion in the Policy Process, 7.
31. Grant et al., eds., The Sage Handbook of Organizational Discourse.
32. Blalock and Barnow, “Is the New Obsession with Performance Management Masking

the Truth about Social Programs?”
33. Toulmin, The Uses of Argument.
34. Wildavsky, Speaking Truth to Power, 218.
35. Heinrich and Fournier, “Dimensions of Publicness and Performance in Substance Abuse

Treatment Programs,” 63.
36. Majone, Evidence, Argument, and Persuasion in the Policy Process, 179–80. Majone’s so-

lution is not to seek any single objective measure but to “begin and sustain a wide-ranging dia-
logue about the meaning and implication of different sets of weights among producers and users
of public services,” 180.

37. Jacobs, Goddard, and Smith, “Public Services.”
38. March and Olsen, Ambiguity and Choice in Organizations.
39. Kingdon, Agenda, Alternatives, and Public Policies.
40. Brunnson, The Organization of Hypocrisy.
41. Brunnson’s work is relevant to understanding performance management in another way.

First, as chapter 5 demonstrated, performance management itself is an institutional norm that
public organizations must increasingly heed to satisfy their institutional environment. They do
so through the creation of formal rituals of information collection and sometimes through what
Brunnson calls double talk, i.e., supporting the ideology of performance management in pub-
lic, even if they do not practice it internally.

42. Majone, Evidence, Argument, and Persuasion in the Policy Process, 2.
43. Wildavsky refers to this as retrospection. See Speaking Truth to Power, 139.
44. March, “Ambiguity and Accounting,” 154.
45. Stone, Policy Paradox, 167.
46. Ibid., 177.
47. Majone, Evidence, Argument, and Persuasion in the Policy Process, 11.
48. Stone, Policy Paradox, 176–77.
49. Ibid., 169–70.

116 Chapter Six

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50. Radin, Challenging the Performance Movement.
51. Thurmaier and Willoughby, Policy and Politics in State Budgeting.
52. Nickerson, “Confirmation Bias.”
53. Ibid., 187.
54. Phillips, Lawrence, and Hardy, “Discourse and Institutions.”
55. Wildavsky and Caiden, The New Politics of the Budgetary Process.
56. Frederickson and Frederickson, Measuring the Performance of the Hollow State; Gregory

and Lonti, “Never Mind the Quality, Feel the Width.”
57. Hood, “Gaming in Targetworld.”
58. Talbot, “Executive Agencies.”
59. Van Thiel and Leeuw, “The Performance Paradox.”
60. Melkers and Willoughby, Staying the Course.
61. DeHaven-Smith and Jenne, “Management by Inquiry.”
62. Ibid., 165.
63. Mintzberg, The Nature of Managerial Work.
64. DeHaven-Smith and Jenne, “Management by Inquiry,” 67.
65. Ibid., 69: “Administrative agreements reached in inquirement processes take on the char-

acter of vows. In part, this is because they are expressed publicly, but it is also a consequence of
the content of the discourse leading up to decisions. As participants reveal their motives, expec-
tations, and reasoning, and as they discursively adjust their intentions and beliefs, they are con-
structing their own identities as responsible professionals. To subsequently ignore agreements
reached in this way is psychologically painful because it violates the individual’s personhood.”

66. Bossidy and Charan, with Burck, Execution.
67. Wildavsky and Caiden, The New Politics of the Budgetary Process.
68. Fording, Schram, and Soss, “The Bottom-Line, the Business Model, and the Bogey.”
69. Joyce and Tompkins, “Using Performance Information for Budgeting.”
70. Bourdeaux, “Do Legislatures Matter in Budgetary Reform?”

Interactive Dialogue Model of Performance Information Use 117

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