# Performance-Based Organizations (PBO) The **Performance-Based Organization (PBO)** model was introduced in **1996** by the **Clinton-Gore administration** as part of the [National Partnership for Reinventing Government](https://govinfo.library.unt.edu/npr/initiati/21cent/index.html). Its primary objective was to restructure specific federal units into results-oriented entities designed to operate within a "balanced budget world." By shifting the focus from procedural compliance to measurable outcomes, the administration sought to increase efficiency in agencies such as the **Student Financial Assistance** office (the first formal PBO), the **Federal Aviation Administration (FAA)**, and the **St. Lawrence Seaway Development Corporation**. --- ## Entries ### Implementation A PBO operates under a management agreement that exchanges increased accountability for administrative flexibilities. These allow the unit to bypass standard civil service rules and acquisition regulations, enabling customized pay scales and streamlined procurement. A **Chief Operating Officer (COO)**, often recruited from the private sector under a fixed-term contract, typically leads the organization to prioritize operational targets over political directives. While intended to improve service delivery, the PBO model has faced criticism regarding its long-term compatibility with public sector values. Analysts often point out that "managing for results" can lead to **goal displacement**, where agencies prioritize easily quantifiable metrics over complex, qualitative public interests. ### International Parallels The PBO model was part of a broader global movement of **"agencification"** (the creation of semi-autonomous, results-oriented entities separated from core ministries) that gained traction under the influence of **[[New Public Management (NPM)]]** from the 1980s onward. While the specific institutional designs varied according to each country's legal tradition and administrative culture, the underlying logic was consistent: split policy formulation from service delivery, grant operational autonomy in exchange for accountability on measurable targets, and appoint leaders (often on fixed-term contracts) evaluated on performance. However, in no country did this logic produce a single, clean institutional form. Instead, agencification everywhere resulted in a **fragmented landscape** of overlapping organizational types often coexisting without a unified governance framework. The most direct international precursor was the **United Kingdom's "[[Next Steps Agencies]]"** initiative (1988), launched under the Thatcher government following the _Improving Management in Government_ report. By 1997, around 140 agencies had been created and roughly 76% of British civil servants worked in them. Chief executives, frequently recruited through open competition (about 35% from outside the Civil Service), operated under framework documents that specified targets and flexibilities. But the UK landscape was never limited to Next Steps Agencies alone: it also encompassed **Non-Departmental Public Bodies (NDPBs)** (popularly known as "[[Quasi-Autonomous Non-Governmental Organization (Quango)|quangos]]") which had separate legal standing from departments, and many other institutional frameworks. In **Brazil**, the closest analogue emerged in 1998: the **Organizações Sociais (OS)**, created under Federal Law 9.637/1998. Unlike the PBO model, which restructures units _within_ the state apparatus, the OS model delegates service delivery to private non-profit entities through _contratos de gestão_ (management contracts). The OS model has been most extensively adopted in **healthcare** (Organizações Sociais de Saúde/OSS), particularly in São Paulo, where they manage public hospitals within the National Health System ([[Public Healthcare in Brazil (SUS)|SUS]]).