The appropriateness of tight budget control in public sector organizations facing budget turbulence

• We contribute to the lack of knowledge about budget control-related outcomes in the public sector.
• We study the relationship between budget turbulence and tight budget control.
• We test whether environmental turbulence-MAS fit affects budgetary performance.
• Tight budget control lessens budget deviations only when budget turbulence is significant.

In the public sector, budget deviations are an important performance dimension. Because of political and institutional pressures, it is crucial that public sector organizations neither overspend, nor underspend. Budget deviations actualize the issue of tight budget control. In this article we hypothesize that when public sector organizations face budget turbulence, the implementation of tight budget control is a functional response that increases the likelihood of meeting budget targets. Our study, combining survey and archival data from 196 Swedish municipalities, confirms our hypothesis. If budget turbulence is substantial, public sector organizations benefit from tight budget control as they seek to control budget deviations, but if turbulence is only marginal, they can conduct activities in the same manner as last year and additional direction from tight controls has no effect on budget deviations. A more general contribution of the paper is the evaluation of the effect of environment and tight budgetary control fit on budgetary performance.