فصلنامه برنامه ریزی و بودجه
پیاپی 101 (بهمن و اسفند 1385)

Performance-based budgeting adds effectiveness and economizing factors to traditional aspects of budgeting. This system distinguishes efficiency from effectiveness. Efficiency emphasizes on the useful utilization of the resources concerned while effectiveness considers the performance. Categorization of operations in performance-based budgeting is in a way that goals are expressed more transparently, the budget is reassessed more easily and its costing method emphasizes on the input-output relations. The most important goal of performance-based budgeting is to reform the pubic sector management system and increase the effectiveness in this sector. This paper is offered in three total sections. The first section presents important definitions and terms regarding performance-based budgeting. Finally, the third section refers to the actions taken in the first phase of applying performance-based budgeting system in Iran and gives recommendations on the ways to execute the second phase of this system.

Financial management systems follow triple goals of financial stability and discipline, strategic allocation of resources and operational efficiency. These triple goals are known as triple framework. Medium Term Expenditure Framework (MTEF) of government is a process taken in order to achieve the triple goals mentioned in many countries over the world during recent years. In this process, the government and the organization in charge of planning and budgeting forge lawful agreements on allocating public resources on the basis of strategic priorities while considering financial discipline. This paper introduces the characteristics of Medium-Term Expenditure Framework (MTEF) of government as well as the experiences of some countries. The last part of the paper is a recommendation on the application of this framework in Iran. Since performance-based budgeting has started in 2006 in Iran and as there is a close relationship between performance-based budgeting and MTEF, it is very crucial to use this recommended framework as soon as possible. Although the recommendation in the last part of the paper is offered for Irans 2007-2008 budget, as far as the nature of this recommendation is concerned, it could be considered for the future years as well.

By studying the evolution history of budgeting systems, you may discern three stages: In the first stage, controlling role of budget is regarded its major function. In the second stage, budget is considered as a means for management improvement. In the third stage, the role of budget is considered in economic planning, implementation of programs and government performance management. After World War II, the developed countries began to devise and apply types of budgeting systems that classified under performance-based in order to improve the management known as operational budgeting in various types; this budgeting system survived in most of these countries in later years. Operational budgeting has lead to different actions in different countries and in different times. These actions in extensive level comprise the following two definitions: 1. Operational budgeting in relation to budgeting with the emphasis on outputs of governments operations rather than the inputs 2. Operational budgeting in relation to classifying governments operations on the basis of plans and activities that lead to outputs production. In this definition, Operational budgeting is often used as synonymous to program-based budgeting. Meanwhile, there is a vast literature regarding program-based budgeting but unfortunately as there is not a unique model for program-based budgeting and since the terms such as program-based budgeting, operational budgeting, Planning-Programming-Budgeting System (PPBS) and results- or output-oriented budgeting are often used interchangeably, the literature has become chaotic. This paper tries to explain the characteristics and deployment trends of all budgeting systems such as planning system, planning-budgeting and modern operational budgeting.