The impact of financial austerity in many countries and the need to set the direction for governments has led to a radically change in several aspects of public sector management. A central component of this process involves the use of strategic planning and performance measures for budgeting decisions. Budgeting plays a central role in public organizations, especially considering that a large part of a nation's income is allocated and managed through public budgets and that public organizations are under ever-greater pressure to manage their services within ever-tighter budgets. Strategies used by public managers to manage budgets are various: while some managers look for approaches primarily focused on cutting costs, cutbacks may also be part of reforms aimed at improving performance through becoming more cost-efficient. Strategies to improve performance and thereby be more costefficient represent one of the main challenges in public sector organizations nowadays. Although scholars have observed that performance measures have been widely developed and introduced into budget presentations and budget setting process should be informed and influenced by the strategic priorities of the organization, this is not always adequately done. The work deepens this link and provides some implications for research and public policies. Moreover, it aims to fill a gap in the literature on the management of austerity and related to the scarcity of studies that address, with a strategic and dynamic orientation, the implementation of the related policies and tools. To this end, a systematic review of works that have studied the implementation of performance budgeting in the public sector is carried out, in order to assess how performance budgeting research has evolved over time, reviewing the results achieved. Performance budgeting involves “procedures or mechanism intended to strengthen links between the funds provided to public sector entities and their outcomes or outputs through the use of formal performance information in resource allocation decision making” (Robinson and Brumby 2005: 5). The studies that have been undertaken offer useful insights into: i) the levels of government involved in the practice of performance budgeting; ii) the stage under analysis (adoption, implementation, use, and impact); iii) the perspective addressed (strategy or budgeting) iv) the main topics discussed. The definition of these aspects represents the starting point for the development of further steps of the research work. In the second chapter, a comparative case study approach is used to assess the effects of austerity measures adopted in two countries severely affected by the crisis: Italy and Portugal. Drawing on empirical evidence from the period 2006–2017, austerity measures are analysed with reference to inputs, processes, outputs and outcomes. The study makes the effort to build a bridge between crisis management literature and strategic planning. 3 In the third chapter, an analysis of performance budgeting in Italian central administrations is presented. Despite its long history, still nowadays, the performance budgeting implies numerous challenges and problems, thus producing contrasting results. As a 2014 OECD report stated, performance budgeting frameworks are abundant in the OECD but are generally flexible and not linked with allocation decisions. This article analyses the dynamics of strategic planning and performance management practices in relation to budgeting processes in the context of the Italian central government, with the aim of evaluating whether a predominant integration model is apparent in relation to those used in different countries at the OECD level. The contribution tackles several topics which, although not new, are of fundamental importance in the current socio-economic context, especially in the face of the continuous "rethinking" of the public role within society and the economy.