Following observations of French and English case studies made possible by our introductory article The basics of impact based budgeting, we try to finally present some challenges and recommendations considering impact based budgeting.
Implementing a performance-based model, regardless of the scale chosen for this new strategy, public managers face undeniable issues and adverse effects mainly due to:
Indicators design: The danger lies in failing to cover every aspect of the outputs in terms of quantity, quality and efficiency thus skewing the reasoning (see above the five criteria for proper performance indicators)
Evaluation reliability: Administrations still face challenges to accurately measure the results of their programs. Defining operational indicators may be a challenge as public policies provide mostly services and no goods. The proliferation of measures (e.g. see the diversity of policies implemented to improve road safety) and the disruptions caused by exogenous factors (e.g. see the influence of environmental factors on health policies) make it even more difficult to give reliable evaluations. Operationally restricted, evaluation methods rely mainly on qualitative data, which needs to be defined precisely to reduce potential disturbances.
Performance information clarity: Decision-makers must be able to take ownership of the figures in limited times requiring to select the relevant indicators and selected evaluations
Resistance to change: Performance management has to cope with change management issues (from the basic fear of losing credits to the insidious fear of losing autonomy)
Elaborate budget with clear and aligned objectives:
Implement budget considering three main rules:
Review objectives, impacts and budgets regularly:
Eventually, we also believe that this approach concerns all kinds of public entities from local governments to the European Union: