The effects of institutional design in program performance

Abstract

PurposeThe aim of this paper is to investigate the effects on implementation and performance of different designs of public programs to promote sustainability goals.Design/methodology/approachThe study selects eight local sustainability programs in Portugal using two different program designs and compares several indicators of performance in terms of program implementation, outputs, and outcomes.FindingsCities using the top‐down approach to programmatic intervention are more successful in accomplishing sustainability goals than cities engaging in the bottom‐up approach. The second program design produced more visible physical outputs, whereas the first effectively achieved sustainability goals.Practical implicationsThe main policy implication of the study is that program design and structure are decisive to achieve sustainability goals. In the case of Programmatic contracts run by general‐purpose local governments, the incentive structure facilitates the appropriation of goals for electoral purposes by local officials. The Programmatic contracts are administered by local government officials who are primarily concerned with economic revitalization and delivering tangible infrastructure. The sustainability label should be removed from these initiatives.Originality/valueThe paper shows that the incentive structure created by program design features influences the achievement of sustainability goals by local communities.