Assessing Reforms of Government Accounting and Budgeting


24 Pages Posted: 10 Nov 2004 Last revised: 19 Nov 2014

See all articles by Ken Smith

Ken Smith

School Accountability Group

Rita Hartung Cheng

Northern Arizona University; University of Wisconsin - Milwaukee - Sheldon B. Lubar School of Business

Date Written: November 5, 2004


We analyze four (4) frameworks for assessing the success of government reforms of accounting and budgeting systems and apply our analysis to performance budgeting reforms in U.S. states. We conclude that performance measures are not useful for the legislative problem of allocating resources among disparate goals, but they are useful for improving the quality and reducing the cost of providing services. Two of the frameworks come from the budgetary literature and focus on allocations (Outcomes view and Process view). The other two come from the accounting literature and focus on incentives among key actors (Monitoring view and Signaling view). The actors considered in this study are Voters, Legislators, Government Managers and the Media. Our theoretical analysis suggests that the four frameworks are often complementary rather than mutually exclusive; however, the Signaling view may provide the best framework for two reasons: 1) it provides insights into the net costs and benefits of adopting a reform and 2) it provides insights into policy suggestions that are likely to increase the adoption of beneficial reforms. Three policy suggestions are given: 1) Legislators should focus on incentives for managers to report performance measures, 2) Performance budgeting should be done on a comparable basis across states, and 3) Influential actors such as legislators and the media should be studied in greater detail.

Keywords: Performance measure, Performance budget

JEL Classification: H72, L33, M40

Suggested Citation

Smith, Kenneth A. and Cheng, Rita Hartung and Cheng, Rita Hartung, Assessing Reforms of Government Accounting and Budgeting (November 5, 2004). Available at SSRN: or

Kenneth A. Smith (Contact Author)

School Accountability Group ( email )

5819 Sorrento St
Salem, OR 97306
United States
503-428-0994 (Phone)

Rita Hartung Cheng

Northern Arizona University ( email )

PO Box 15066
Flagstaff, AZ 86011
United States

University of Wisconsin - Milwaukee - Sheldon B. Lubar School of Business ( email )

P.O. Box 742
3202 N. Maryland Ave.
Milwaukee, WI 53201-0742
United States
(414) 229-4238 (Phone)


Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics