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Cost-Benefit Analysis Of Performance Based Budgeting Implementation

Author

Listed:
  • Trenovski Borce

    (Assistant Professor at the Saints Cyril and Methodius University, Faculty of Economics – Skopje)

  • Marjan Nikolov

    (President of Center for Economic Analyses)

Abstract

This is the first study which estimates costs and benefits of overall policy reform for implementation of performance based budgeting. Costs estimation is based on a phased implementation, where we consult the Regulatory Impact Assessment methodology. In order to estimate benefits, we use a microeconomic approach to assess technical efficiency (Data Envelopment Analysis-DEA and Stochastic Frontier Analysis-SFA) of the budget users. The estimated benefits are higher than the estimated costs, or for every Macedonian denar invested in this reform an additional 2,600-8,000 Macedonian denars of gross value added in the Macedonian GDP are expected.

Suggested Citation

  • Trenovski Borce & Marjan Nikolov, 2015. "Cost-Benefit Analysis Of Performance Based Budgeting Implementation," Journal Articles, Center For Economic Analyses, pages 5-44, December.
    • Handle: RePEc:cmk:journl:y:2015:p:5-44
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    References listed on IDEAS

    as
    1. Marjan Nikolov & Borce Trenovski & Gabriela Dimovska, 2015. "Open And Transparent Budget Process In Westernbalkan Countries," Journal Articles, Center For Economic Analyses, pages 5-21, June.
    2. Mr. Jack Diamond, 2006. "Budget System Reform in Emerging Economies: The Challenges and the Reform Agenda," IMF Occasional Papers 2006/002, International Monetary Fund.
    3. Allen Schick, 2007. "Performance Budgeting and Accrual Budgeting: Decision rules or Analytic Tools?," OECD Journal on Budgeting, OECD Publishing, vol. 7(2), pages 109-138.
    4. Mr. Jack Diamond, 2003. "From Program to Performance Budgeting: The Challenge for Emerging Market Economies," IMF Working Papers 2003/169, International Monetary Fund.
    5. Marjan Nikolov, 2006. "Measuring Performance Of Kindergartens In Macedonia With Data Envelopment Analysis-Dea 12," Journal Articles, Center For Economic Analyses, pages 25-35, December.
    6. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
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    More about this item

    Keywords

    performance based budgeting; cost–benefit analysis; budget systems; public finance; technical efficiency; Macedonia;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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