Planning, Programming, Budgeting, and Execution in Comparative Organizations

Research Questions

  1. What are the key features of resource planning in each comparative case?
  2. What are the perceived strengths and challenges of the comparative processes?
  3. What are the potential lessons from each case regarding DoD’s PPBE System?
  4. How might adversary processes affect U.S. comparative advantage and disadvantage?

The U.S. Department of Defense’s (DoD’s) Planning, Programming, Budgeting, and Execution (PPBE) System was originally developed in the 1960s as a structured approach for planning long-term resource development, assessing program cost-effectiveness, and aligning resources to strategies. Yet changes to the strategic environment, the industrial base, and the nature of military capabilities have raised the question of whether existing U.S. defense budgeting processes remain well aligned with national security needs.

Congress called for the establishment of the Commission on PPBE Reform. As part of its data collection efforts, the commission asked RAND Corporation researchers to conduct case studies of budgeting processes across nine comparative organizations: five international defense organizations and four U.S. federal government agencies. Congress also specifically requested two case studies of near-peer competitors, and the research team selected the other seven cases in close partnership with the commission.

In this volume, the first of four, RAND researchers conduct case studies of the budgeting processes of China and Russia, the two near-peer competitors. Researchers conducted extensive document reviews and structured discussions with subject-matter experts with experience in the defense budgeting processes of the international governments and other U.S. federal government agencies. Each case study was assigned a unique team with appropriate regional or organizational expertise. For the near-peer competitor cases, the assigned experts had the language skills and methodological training to facilitate working with primary sources in Chinese or Russian. The analysis was also supplemented by experts in the U.S. PPBE process.

Key Findings

China and Russia make top-down decisions about priorities and risks but face limitations in implementation

  • In China, modernization efforts have not yielded consistent outcomes. In Russia, a significant increase in the defense budget for the war in Ukraine has encountered limitations in industrial capacity, supply chain reliability, and the ability to call up required manpower.

China and Russia make long-term plans but have mechanisms for changing course in accordance with changing priorities

  • Centralized decisionmaking in both countries can reduce the friction associated with course corrections, and China is less likely than Russia to face hard choices when it comes to reprioritizing because of China’s economic growth over recent decades.

Especially in China, political leaders provide stable and sustained long-term support for military modernization priorities

  • The lack of political opposition, the high degree of alignment between military and senior political leaders, and the scale of military investment have facilitated progress toward complex modernization priorities.

China and Russia have weak mechanisms for avoiding graft or ensuring transparency, efficiency, effectiveness, and quality control in PPBE-like processes

  • The power dynamics and the structures of decisionmaking in China and Russia provide limited guardrails for ensuring efficiency, effectiveness, or oversight of investments.

Reforms in both countries have been designed to increase oversight

  • China and Russia have recognized the inefficiencies and the limited avenues for competing voices in their top-down budget processes. They have looked to other international models, including those used in the United States, for lessons on budget reforms.

Recommendations

  • DoD will not likely find any simple way of replicating the advantages of China’s system by imitation, given the stark differences between the U.S. and Chinese governmental systems. However, finding analogous measures to achieve similar effects could be worthwhile. In particular, two types of measures could have beneficial effects on DoD budgeting practices: (1) finding ways to ensure sustained, consistent funding for priority projects over many years and (2) delegating more authority and granting greater flexibility to project and program managers — without compromising accountability — so that they can make changes to stay in alignment with guidance as technologies and programs advance.
  • Despite the frequent public discussion in the United States that oversight adds time to DoD’s PPBE process, it is clear from the Chinese and Russian experiences that oversight is a critical element that ultimately helps lead to successful capabilities for use during operations and, therefore, should not be haphazardly traded away for speed during resource allocation.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    China

    Timothy Heath and Ivana Ke

  • Chapter Three

    Russia

    Dara Massicot and Mark Stalczynski

  • Chapter Four

    Key Insights from China and Russia Case Studies

This research was sponsored by the Commission on Programming, Budgeting, and Execution (PPBE) Reform and conducted within the Acquisition and Technology Policy Program of the RAND National Security Research Division (NSRD).

This report is part of the RAND Corporation Research report series. RAND reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors.

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