The Strategic Role of Adaptive and Performance-Based Budgeting in Advancing Public Governance

Abstract

The budget plays a central role in public sector organizations as a planning, control, and accountability instrument that ensures the efficient and transparent use of public resources. Beyond functioning as a fiscal instrument and policy tool, the budget also serves as a mechanism for coordinating activities across organizational units and as a performance evaluation tool to support the achievement of development goals. In practice, traditional budgeting processes often face challenges such as inflexibility, inaccurate assumptions, and limitations in performance measurement. Through sound financial governance, the budget can be transformed into a strategic instrument for promoting societal welfare and maintaining economic stability. This study employs a historical approach to trace the evolution of public budgeting, its relationship with financial governance, and its implications for the effectiveness of public policy. The findings emphasize the importance of reforming budgeting systems toward models that are more adaptive, accountable, and performance-oriented, thereby strengthening the role of public budgeting in supporting sustainable development and enhancing government responsiveness.