Purpose: Although the topic of performance budgeting has received considerable attention in the literature, it is mainly explored in the field of public management and administration, and little research exists in the field of public sector accounting. The purpose of this paper is to provide...

Performance targets direct organizational participants toward firm strategy, provide guidance for allocating effort, and induce effort toward performance goals. Key aspects of the setting of performance targets are how specific they should be and at which levels they should be set. We develop a...