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Performance based budgeting (PBB) has been a popular reform among ministries of finance across the world, accompanied by high expectations for its ability to transform national budget processes. PBB offers the hope of a more evidence-based rationale for making budget decisions across an array of competing policy and program areas. It offers a framework for linking medium-term national strategies with the annual budget process, while the program logic structure gives a more transparent view of the activities being undertaken than a traditional line item budget does.

Ultimately, PBB holds out the allure of providing incentives for improved public service delivery. Despite significant time and effort devoted to PBB implementation, the experience of many countries is rather mixed. This report explores some of Malaysia’s successes and challenges in implementing PBB in recent years, the rationale for undertaking the reform, and how Malaysia’s experience with PBB compares with that of other countries.

This review by World Bank Group is for the design, implementation, and application of our Outcome Based Budgeting system.


Credit: World Bank


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