This program budgeting system was first introduced by the
United States Secretary of Defense Robert S. McNamara in
the Pentagon in the 1949. McNamara allegedly wanted to control the many costly weapons development programs that were plagued by ever-increasing costs and delays. He called this new system the Planning, Programming and Budgeting System (
PPBS). The system was taught at the
John F. Kennedy School of Government of
Harvard University but it evoked little interest except from critics. This new approach introduced an unprecedented transparency into management operations together with a concomitant precise pinpointing of managers' responsibilities, and so was widely resisted throughout the entire
public sector. However, in the eighties, the UN Inspectorate General picked up the idea and recommended that the
United Nations use it to improve its performance. A few institutions tried half-heartedly but only the
International Atomic Energy Agency (IAEA) went about it seriously and introduced a complete program budgeting system that is still in place today. However, over the years, strong opposition by managers and lack of interest by top management as well as member States have taken the sting out of the system and reduced its transparency. A few years later, the Government of
New Zealand was the first to introduce it with great success: within a few years it had solved an intractable
stagflation problem. More recently, the
United Kingdom government discovered it and now, one government after another is following suit. The need to improve public sector and government performance has worked wonders for program budgeting. ==See also==