A COMPARATIVE ANALYSIS OF THE DEVELOPMENT OF PERFORMANCE-BASED MANAGEMENT SYSTEMS IN DUTCH AND NORWEGIAN LOCAL GOVERNMENT

G. Jan van Helden, University of Groningen, the Netherlands

Aage Johnsen, Department of Accounting and Business Method, University of Edinburgh, Scotland

Abstract

This paper encompasses a comparative analysis of the development of management and accounting systems in local government in the Netherlands and Norway. Both countries are similar to some important issues, such as their stage of economic development and the dominant role of government in society. The paper investigates similarities and the differences of some particular developments in government, e.g. the introduction and implementation of new management systems in municipalities, which are related to international trends in governmental management and accounting, known as New Public Management (NPM).

The paper will first describe and explain NPM developments in local government in both countries. More in particular, it addresses the initiation and diffusion of these developments and it will also tentatively show its impact. Moreover, the paper explores the extent to which three causal factors contributed to NPM developments, e.g. financial stress and opportunity for change (Hood, 1995), as well as the existence of epistemic communities (Laughlin and Pallot, 1999).

A main characteristic of NPM is the introduction of performance-based management systems. The paper will examine the dynamics of performance-based management systems in local government in more detail. In both countries nine municipalities of various sizes have been selected. Performance budgets and reports of these municipalities in the years 1990, 1995 and 2000 will be analysed. This analysis aims to show to what extent the contents of these documents has been improved during the subsequent years. Various contingent factors will be incorporated in this analysis, such as characteristics of the policy fields in question (Hofstede, 1981, Ouchi, 1979) and organizational size. The paper will conclude with a comparative analysis of the performance-based management systems in Dutch and Norwegian local government. It also tries to answer the question as to whether institutional factors might explain possible differences in this respect.