The Diffusion of Performance-Based Budgeting Reforms: Cross-Provincial Evidence from China

Abstract

Extant literature has extensively examined the diffusion of performance-based budgeting (PBB) from the standpoint of central governments, with a special focus on European and American countries. However, how PBB reforms diffuse within a unitary state, especially among mid-level governments, still remains elusive. To better understand the mechanism of PBB diffusion, this research use Event History Analysis to investigate how leadership characteristics, intergovernmental relations, financial standing, and organizational culture affect provincial PBB diffusion in China. The findings suggest that (1) the reasons for PBB adoption vary across different types of public leaders; (2) PBB reforms are primarily diffused through the bottom-up inducement, with central advocacy and horizontal competition playing an insignificant role; (3) provinces with a greater financial standing are more likely to adopt PBB reforms; (4) a culture that values reforms and transparency of information can drive the diffusion of PBB reforms. As a result, our research has clear implications for performance budgeting literature and practice: it provides valuable insights to policy-makers and public leaders on how to facilitate PBB reforms and policy diffusion across mid-level governments, particularly in a unitary state.