Based on the existing literature on cutback budgeting and performance budgeting it is possible to make diverging predictions about the role of performance information in budgetary decision-making during fiscal stress and fiscal crisis. This paper contributes to theoretical discussions by outlining what kind of (rivalling) predictions different theoretical approaches would make about the use of PI in budgetary decision-making in times of fiscal stress and fiscal crisis. This paper also contributes to the empirical literature by examining the role of performance information in the central government budgetary decision-making in Estonia during the recent economic and fiscal crisis (in 2008-2009) and its aftermath (during a continuing atmosphere of fiscal stress in 2010-2012). As the Estonian case demonstrates, in a situation of fiscal crisis, when the decision-makers are intent on adopting sizable fiscal consolidation packages, the incrementalist prediction – that performance would not be used in budgetary decision-making – is corroborated. In the aftermath of a period of fiscal crisis, however, when fiscal stress continues (but is not so extreme anymore), the Estonian case shows that the understanding provided by interactive-dialogue theory of performance information use is the most accurate: performance information is sometimes used in budgetary negotiations, broadly speaking, but different actors perceive its role and impact differently.
