Performance budgeting strategies have failed to realize the aspirations of their advocates for nearly 50 years. Performance budgeting underperforms because it is too simple a solution for complex problems. It overestimates the power of monetary incentives. Where improved performance can be easily achieved, it spends money where it is not needed. Where improved performance is difficult to achieve, it is unlikely, by itself, to motivate significant change and tends not to provide resources that may be needed. And it is incapable of overcoming the forces that tend to make public budgeting decisions fundamentally incremental. More effective financial strategies would avoid formulas that reward unproductive institutional practices, challenge institutions to improve with existing resources, and provide additional support to increase the scale of institutional strategies that improve outcomes.