Performance management in local government expenditures

The increase in public expenditures in developing countries has been one of the most important problems. The New Public Management approach provides a conceptual framework for reducing the increasing public expenditures and conducting the expenditures on a participatory, transparent, and accountable basis within the framework of efficiency, productivity, and thrift. Performance-based result output oriented budgeting systems, which are used by many developed countries in the world, reflect the implementation of the New Public Management approach. Turkey switched to Performance Based Budgeting system in 2003 with Law No. 5018. Local governments still apply this performance system. In the study, the expenditure information created by the local governments according to the Performance Based Budgeting principles was examined and it was tested whether the performance criteria were met in financial management. FMOLS model was used with panel data analysis method and the expenditures of local administrations on a provincial basis in Turkey were analyzed in quarterly periods for the years 2007-2018. As a result of the study, it has been understood that the efficiency of expenditures in local governments is determined not according to Performance Based Budgeting criteria, but according to inflation, borrowing, the share taken from the central budget, and it has been concluded that the strategic plan, performance program and activity reports introduced by the law no. 5018 have weak relations with each other and with the budget.