Capacity, Management, and Performance: Exploring the Links

Amid the focus of public management reforms on improving the performance of public organizations and their managers, there has been little empirical attention to the links between performance and management systems and activities; little attention has been paid to how and under what circumstances "management matters." This study reports data from the Government Performance Project (GPP), with information of all 50 states. The GPP model argues that fundamental management systems are not only amenable to comparison across states but can provide critical components of the capacity that is basic to longer term effectiveness and performance. This article considers the extent to which capacity facilitates performance in financial management, analyzing the factors that contribute to the maintenance of rainy day funds (RDFs). The authors argue that arriving at positive performance for such indicators requires not only administrative capacity but also rules that shape political behavior that will support performance.