Budget governance and public value in the social services

Despite steadily increasing expenditures since 2018, the social services sector continues to struggle
with persistent challenges, including poor user outcomes, difficulties in motivating and retaining
qualified personnel, and incidents of care neglect and illegitimate use of force (see also appendix).
At present, we lack a comprehensive understanding of what is required to improve the overall
performance and legitimacy of the social services sector. More broadly, research has identified
several key levers for enhancing the performance of public organizations—such as improved
leadership to strengthen organizational performance (e.g., O’Toole & Meier 2011; Andersen et al.
2018a, 2018b), as well as carefully designed performance-oriented budgeting approaches (Ho
2018). However, how these and other insights can be effectively applied to improve performance
within the Danish social services sector remains a pressing challenge.
The entry point for the present project is the system of local government budget governance in the
social sector. Existing research has criticized public sector budgeting practices for being overly
focused on inputs and, at best, narrowly defined outputs—while paying limited attention to actual
outcomes (Hood & Piotrowska 2021). Furthermore, these practices are often seen as reinforcing
short-term thinking and organizational silos.
In response to these challenges, the project therefore investigates how local government can design
and implement a budgeting approach for the specialized social services sector that promotes
stronger outcome orientation and longer-term perspectives.
The project draws on more theoretical perspectives, intended to enrich both the conceptual and
practical approach to public budgeting. Among these perspectives is the public value management
framework, first articulated by Mark Moore in 1995 (Moore, 1995), along with subsequent
contributions to this literature. Moreover, the project also draws upon insights from other relevant
strands of scholarship, in particular developments in the budget literature (Rubin 2015; Douglas &
Overmans 2020; McDonald et al. 2024). A public value approach to budgeting may be well aligned
with the current needs of the sector, as it emphasizes the importance of steering public organizations toward delivering outcomes, managing resources effectively, acting in a legitimate manner, and
building organizational capacity.
Although public value has primarily been applied in the context of strategic management, recent
scholarly efforts have begun to explore how budget institutions and practices can be structured to
support the creation of public value (e.g. Douglas & Overmans 2020).
Budget institutions refer to the formal and informal rules and processes that govern the preparation,
adoption, and implementation of the budget (Raudla 2019). These institutions play a key role by
influencing the competencies and shaping the incentives of the actors involved in public budgeting
(Wildavsky & Caiden 2001). In doing so, budget institutions also exert a substantial influence on
budgetary outputs (Wildavsky & Caiden, 2001; Rubin, 2016), such as actual monetary priorities
devoted to particular programs in the social sector. The research project anticipates that the extent to
which budget institutions support the creation of public value varies considerably, and that budget
institutions should therefore be of central scholarly and practical interest within the social sector.
The project’s overarching research question is: How can local governments adopt budget
institutions that promote public value, and what are the implications of such institutions for budget
actors and budgetary outputs in the social sector?