The performance of regional governments under the results-based budgeting framework: A two-stage sectoral analysis

Vincent Charles,Juan Aparicio,Juan Diaz

doi:10.1051/ro/2022012

Abstract

The results-based budgeting (RBB) framework is a public management strategy in which economic resources are allocated to certain budget programs, oriented towards delivering specific products and results to the population. The present paper analyzes the regional governments’ efficiency in using their economic resources, under the RBB framework, with an application to the Peruvian context. To this end, we employ a data envelopment analysis (DEA) model with bootstrapping. In the first stage, different sectors of the regional governments are considered individually: education, security, health, sanitation, transportation, and recreation. In the second stage, the overall efficiency index is calculated using the sectoral indices obtained in the first stage. Finally, the factors or determinants influencing the level of efficiency are analyzed. The results show improvements in efficiency levels in the areas of health and sanitation, to the detriment of the rest of the sectors. The average overall efficiency level over the period 2013–2016 remains in the range of 0.25–0.30, which indicates an inefficiency level of 70%. Finally, the variables fiscal autonomy, capital stock, and population density show a positive relationship with respect to the overall efficiency index.

Highlights

In Peru, the budgets prepared by the Ministry of Economy and Finance have been incremental in nature, have not been associated with outputs or results, have been set up to respond to short-term economic issues, and have not emphasized the quality and efficiency of spending in favor of the population1 (Alvarado & Morón, 2008)
Both Lambayeque and Tacna remained among the first three most efficient regions, but what is important to highlight is the increase in efficiency experienced by Lima: 0.814 in 2014, 0.822 in 2015, and 0.882 in 2016
This study analyzes the efficiency of public spending of the 25 regional governments of Peru, taking the Results-Based Budget (RBB) as a frame of reference, which represents a public management strategy that allows linking the allocation of budgetary resources to goods-services and results in favor of the population, with the characteristic of allowing these to be measurable

Summary

Introduction

In Peru, the budgets prepared by the Ministry of Economy and Finance have been incremental in nature, have not been associated with outputs or results, have been set up to respond to short-term economic issues, and have not emphasized the quality and efficiency of spending in favor of the population (Alvarado & Morón, 2008). The Ministry of Economy and Finance has been progressively implementing a results-based budgeting (RBB) framework as a new way of managing public resources with the aim to promote the country’s economic and social development through greater efficiency in the use of the economic resources allocated to the regions.The RBB was constituted as a strategy by which economic resources would be allocated to certain programs, known as budgetary programs, which represent the programming units of the actions of public entities, which are integrated and articulated and are aimed at providing measurable products and outcomes to achieve a specific result in favor of the population, to influence the improvement of the quality of life and contribute to the achievement of a final result associated with a public policy objective (Acuña et al, 2012). The evaluation of this new program has been carried out by the Ministry of Economy and Finance and various competent bodies, who analyze the results obtained by the regional and local governments on the basis of the goals and objectives established previously

Methods

Results

Discussion

Conclusion