The role of program and performance budgeting in rationalizing government spending: A comparative study between line-item budgeting and program budgeting

The phenomenon of accelerated growth in government spending is one of the most prominent financial challenges facing the economies of many countries due to their limited economic resources and their inability to efficiently manage their available financial resources. This is due to their reliance on the item-based approach to preparing and implementing their general budgets. This approach is plagued by numerous flaws, the most notable of which is the focus on inputs and the neglect of outputs and outcomes during the planning process, as well as the weak role of the oversight tools it relies on in monitoring and overseeing implementation. Furthermore, the accounting system it relies on is unable to provide the necessary accounting and financial information to decision-makers. As a result, adopting the item-based approach leads to increased government spending. Conversely, numerous scientific studies, including our current study, indicate that implementing a program and performance approach increases the chances of successfully implementing a government spending rationalization policy. Program and performance budgeting enables decision-makers to evaluate government programs, verify the efficient use of resources, and reduce unnecessary spending. Its implementation also contributes to increasing the efficiency of resource allocation, supporting procedures for defining job responsibilities, and assessing the returns of government programs and the extent to which their objectives are achieved. Furthermore, the study concluded that the functions of planning, control, and performance evaluation, as well as the foundations and procedures of the accounting system upon which the general budget relies, play a vital role in the success of the rationalization policy.