Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


The Adoption of Performance-Based Budgeting in Indonesia Public Sectors: Note to Future Research

Author(s): Shiddiq Nur Rahardjo, Anis Chariri

The Indonesian government officially adopted a performance-based budgeting system, replacing the traditional budgeting system in 2003, as part of public sector reforms. The Reforms that have been ongoing for almost two decades have not shown a significant impact on government performance. Previous studies show that there are obstacles and challenges in implementing performance-based budgets. Institutional theory states that the adoption of a system may occur because the organization wants to change and there is a demand to be better (normative isomorphism), adopting only because it imitates/copying other organizations due to conditions of uncertainty (mimetic isomorphism), or adoption due to pressure from other parties (coercive isomorphism). Previous studies have shown mixed results on the position where the adoption of performance-based budgeting in Indonesia is viewed as based on institutional theory. Decoupling occurs in the implementation of performance-based budgeting, namely there is an inconsistency between theory/concept and its implementation. The purpose of this study is to critically review previous studies and provide us with future research notes on the adoption of performance-based budgets. Literature reviews are used to explore, compare and confirm the findings of previous studies. The experiences of other countries adopting performance-based budgeting have also been explored with mixed results. Previous studies have mostly used quantitative research methods, so a different alternative approach (qualitative) is needed to produce more in-depth research. Notes for further research are needed in opening horizons and views on the phenomenon of the adoption of performance-based budgeting in Indonesia.

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