Study Of Local Government Performance Budget

Since late 1990s, China has performed a series of budget policy reforms intended to reinforce budget control that includes department budgeting, exchequer centralized payment, government purchase and Separation of income and expenditure, etc . Almost in the same period, western countries delegating OECD (Organization for Economic Co-operation and Development) launched new budget management reform whose principle is based on the performance and got effective results. This new budget method is called 'Performance Budgeting' or 'Performance Based Budgeting' which is likely to be an inspiration to the reform China is currently undergoing. This article is going to provide a brief introduction of this new method's formation, development, attribution, definition and the practical experiences when western countries performed this reform. Also, an example of the 'performance budgeting' used in the government of Xuhui District in Shanghai will be analyzed. Finally, reform suggestions will be put forward that budgeting should begin with local government and a gradually combination of 'controlling budgeting' and 'performance budgeting' is essential.