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Abstract

This article examines how adaptive leadership shapes the implementation of performance-based budgeting (PBB) in Texas municipalities. PBB has been promoted as a rational reform linking government spending to measurable results. Through qualitative interviews with two Texas city managers, this article explores how trust, education, and ethical stewardship influence whether performance information is interpreted as meaningful guidance or treated as a compliance task. The findings show that leadership behaviors, rather than measurement systems alone, determine the durability of performance reforms. When leaders create conditions for shared understanding and reflective learning, PBB becomes a collaborative framework that supports fiscal discipline, transparency, and public trust. The study discusses how ethical and adaptive leadership practices are essential for sustaining performance reforms within diverse municipal contexts.

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