The Design and Execution of Performance Management Systems at State Level: a Comparative Analysis of Italy and Malaysia

Performance management is maturing as an effective approach in public organizations around the world in improving public services. However, the existing models, based primarily on best practices of first-world nations, have limitations that must be addressed. One of which is the relative lack of attention to the context of performance management reform. This international comparative case study analyses the experience of Italy and Malaysia in the design and execution of performance management systems at the national level. It seeks to contribute to the comparative literature on performance management across national jurisdictions. Italy and Malaysia also offer a contrasting study given their differing stage of economic development and extent of statism. Both these countries have a long history of reform to offer a good sample on the evolution of performance management at the national level of administration. Based on selected interviews of stakeholders in the reform effort and literature review, this study investigates how performance management systems have changed over the past decades, the motivations behind their metamorphoses, their common elements across the two countries and what accounts for the respective progress in the execution of the two systems. The study also inquires into the role that the institutional framework (formal, budget process, law mandating performance management, and planning and control systems) plays in bolting these systems on the fabric of public administration and in making the performance management systems robust. The study presents policy recommendations and strategies on how governments can create more robust performance management systems for enhanced accountability and transparency in an age of resource constraint. These include the consideration of organizational setting (centralization or decentralization) for performance management, the development of financial and non-financial indicators, especially those that are outcomes-based, planning and control mechanisms, culture, the impact of performance management legislation, the role of administrative and political leadership, and the need for an informational infrastructure that supports performance management.