public manager

The Difference Between Spending Money and ‘Buying’ Outcomes

by Jason Saul– December 04 2013


The government is a ‘crappy’ venture capitalist,” said Larry Summers, then President Barack Obama’s top economic adviser, in a 2009 email. This may or may not be true, but most venture capitalists would be pretty bad, too, if they had no systematic way to evaluate investments and no way to measure their returns.


The lack of measurement may be the single greatest challenge facing state governments today. Arbitrarily “guessing” at which policies and programs work, or merely re-funding the same programs year after year, is a major factor in racking up $4 trillion of state indebtedness.


To reverse this trend, states have introduced a spate of new initiatives over the past few years that are designed to improve accountability and focus on results. These initiatives run the gamut from performance-based budgeting to social impact bonds, to performance management to managing for results.


The Illinois Budgeting for Results (BFR) initiative, passed in 2010, stands out as unique among them for several reasons. First, the governor appointed a bipartisan BFR commission to steward the statewide initiative and ensure its implementation. Second, the initiative is focused not just on more performance measurement, but on standardizing outcomes across the state. And third, the initiative does not aim at the low bar of merely avoiding waste, but instead aims to identify programs that deliver the best bang for the buck. To put it simply, it is like turning the state into one “big” social impact bond.


Read the full article here.

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