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A Roadmap to Budget 2.0


September 13, 2011

Doug Hadden, VP Products

I’ve been working on a paper for the Association of Budgeting and Financial Management (ABFM) conference in October. I’ll be on a panel discussion on October 15th on Online Expenditure & Performance Reporting. There is growing evidence that government budget management is maturing.

Budget preparation is transitioning from an internal expert/technocrat to a community model through the use of social media.  Government organizations have leveraged outside experts, civil society and businesses for input for many years. But, new technology tools and citizen demand is creating the demand for more open and transparent participatory budgeting. Hence: Budget 2.0.

Towards a Budget 2.0 Roadmap

The difficulty in mapping out this modernization because there are so many overlapping avenues. And, modernization is inconsistent among governments where some governments are showing significant reform on some budget avenues but not others. The modernization to Government performance management, open data, accrual accounting and participatory budgeting appear to be consistent – part of a virtuous circle. For example, accrual accounting enables government performance management. Open data enables participatory budgeting that can improve government performance. Performance information improves open data.

My preliminary work is shown as a mind map below. (The paper and accompanying presentation will be easier to consume. I’ll provide links when completed.)




















Avenues of Budget Modernization

Some of these budget modernization avenues include:

  • Budget Preparation including the process for creating and approving budgets
  • Oversight including internal government and external stakeholders
  • Citizen Engagement includes methods of communicating to external stakeholders
  • Transparency Mechanisms leveraged by governments
  • Budget Comprehensiveness including all government tiers, parastatal organizations and coverage of all revenue and expenditures
  • Accounting Methods from cash through accrual accounting
  • International Standards Support for public sector and transparency standards
  • Policy Formulation including the process of building policy and aligning policy to budgets
  • Budget execution including how execution is controlled to meet budget objectives
  • Government Communications Medium from published documents through to open data
  • Timeliness on information provided to parliaments and citizens

There are significant barriers to modernization including:

  • Governments that operate on a federal model can be legally prevented from providing comprehensive budgets across all tiers of government
  • Budget confidentiality embedded in law prevent open interaction and participatory budgeting
  • Transparency generates political concerns as does forms of performance management and accrual accounting that show the “true value” of the government
  • Data quality concerns can prevent the timeliness of information publication restricting the ability to support citizen participation
  • Culture of experts in government restricts engagement with external stakeholders

From Budget 1.0 to Budget 2.0

My assessment is that the modernization avenues can be categorized as:

  • Budget 1.0: Traditional mechanisms of budget management that are primarily internally focused where control and compliance are major concerns
  • Transitional: Increase of externally focused budget management where holistic budget management, transparency and government performance are major concerns
  • Budget 2.0: Social mechanisms that attempt to leverage the network effect to improve government performance and service delivery


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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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