| As our country is establishing market economy system, it has been ratified to construct public finance frame to fit with it. The budget form adapted to public finance is public budget. The essential of public budget is collocating scarce resources. A sound public budget should be overall, annual, future-orient, legitimate, transparent, performance-orient.The traditional budget management is the line-item budgets which classify the expenditure according to objectives and control use of funds. It is not permitted divert the funds from current expenditure to other item expenditure. The performance is not relevant with budget in traditional budget. Since 50's, the goal of budget reforms was leading the performance into budget. Recommended by Hoover Commission, in 1949, performance budgeting had been adopted in the United States for the first time in the world. The emphases of performance budgeting are measuring full cost, evaluating workload and unit cost. Unfortunately, performance budgeting was not successful because it only concentrated on effective management and control in the early time. System of Planning Programming and Budgeting (PPBS) was next attempt of budget reforms. The purpose of PPBS is to ensure establishing more close relation between the policy goals and program objectives, program and activity. Since pursuing perfect government goal and neglecting the political factors in the budget PPBS was proved unworkable. The last important budget reforms was Zero-based budgeting before 80's. Every expenditure item of budget should include other information needed to justify the agency budget request and get approval every year. ZBB is short-lived because it is impossible to make a new budget every year. In the middle of 1980s some OECD country especially Australia and New Zealand carried a series of reform named "new public management" that had quite an effect. The traditional input budgeting has been replaced by the out budgeting which measures the performance of government sector and expenditure unit through output indicators. The focus of output budgeting which give the power of managing and operating fiscal resource to government sector and expenditure unit to enhance performance shifts from input to output. Output budgeting is modern performance budgeting.Performance budgeting has been regarded by a lot of country of world because of modern management ideas and advancement of technique. Performance budgeting links funds with performance and decides the budget according to performance. A performance budget is a presentation that clearly links performance goals with costs for achieving targeted levels of performance. In general, a performance budget links strategic goals with related long-term and annual performance goals and with the costs of specific activities that contribute to the achievement of those goals. National Performance Review define the new performance budgeting that is mission-driven and results-oriented. In the broad sense of expression, performance budgeting include all budget reform which links budget input and budget output. The performance of performance budgeting includes three aspects: aggregate allocative efficiency, allocative efficiency and government efficiency. The aggregate allocative efficiency is the demand of aggregate resource of public sectors. The allocative efficiency is the ability of leading the public resource to most valuable use. The allocative efficiency is the ability of government sectors to provide public goods and public service according to demand.In the long term, because of lag of government function transformation, management method and so on, it is a fact that the fiscal expenditure efficiency is low. Firstly, the scale of fiscal expenditure is not standard. Secondly, the structure of fiscal expenditure is not reasonable. The administration expenditure increases too fast. Thirdly, the popular people preference is replaced by the government leader's, which lead to a lot of management achievement project. Fourthly, large fiscal...
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