A Critical Review of Literature on Performance Contracting

Public sector reforms aimed at making the public sector efficient in provision of goods and services has been around since the world financial crises of the 1980s that resulted from the unprecedented surge in oil prices and the collapse of centrally planned economic systems of the eastern bloc. These reforms have been characterized by adoption of prudent management of resources through introduction of financial and non-financial controls. One of the key pillars of public sector reforms is the introduction of performance contracting. This paper critically looks at studies conducted on the subject identifying consensus among scholars and controversies as well as gaps that exist in the literature on the subject. Though performance contracting has received positive reception, it is evident that its implementation has not been without challenges.