By Zhu Meili & Du Jing, China Development Research Foundation

Research Report, No.83, 2021 (Total 6148) 2021-4-9

Abstract: China’s fiscal imbalance might become great during the 14th Five-Year Plan period. In order to address this issue, it is necessary to further reform budget performance management. Since the 13th Five-Year Plan period, China has made remarkable progress in budget performance management by establishing a comprehensive budget performance management system that covers total procedures and all items at both central and provincial-level governments. But research findings show that the present budget performance management lacks effective incentives and binding mechanisms; the grassroots performance management is not in place; and management performance and fiscal input are mismatched. These problems are mainly induced by non-smooth budget management institutional arrangements and inadequate performance governance capability. During the 14th Five-Year Plan period, by following the general arrangements of strengthening fiscal resources coordination and intensifying budget restrictions and performance management, we need to make a budget performance management plan, formulate a nationwide performance standards system and adopt creative incentives and binding mechanisms, in a bid to improve the budget performance management quality, cultivate new drivers for its reform and bring into full play the role of national governance system and governance capability in modern times.

Keywords: budget performance management, problems, policy options