The Research Department of Economics and Management of Tadbir Nikan Business, Marketing, and Finance Open 3092-6238 In Press 2026 09 01 The Impact of Inflation on the Efficiency of Performance-Based Budgeting and Managerial Controls The Impact of Inflation on the Efficiency of Performance-Based Budgeting and Managerial Controls 1 19 EN Journal Article 2025 12 02 <p>This study aimed to examine the impact of inflationary pressure on the efficiency of performance-based budgeting and the effectiveness of managerial controls in governmental and public organizations in Tehran. This applied, quantitative, cross-sectional study used a descriptive-correlational design. The statistical population consisted of managers, financial officers, budget experts, accountants, internal auditors, and administrative specialists employed in governmental organizations, municipalities, and state-affiliated institutions in Tehran. A total of 384 eligible participants were selected through multistage and proportionate stratified sampling. Data were collected using a structured questionnaire measuring inflationary pressure, performance-based budgeting efficiency, and managerial control effectiveness. Content validity was confirmed by specialists in accounting, economics, public administration, and financial management, while internal consistency was verified using Cronbach’s alpha. Data were analyzed through Pearson correlation, multiple regression analysis, confirmatory factor analysis, structural equation modeling, and bootstrap mediation analysis using SPSS and AMOS software. Inflationary pressure was negatively correlated with performance-based budgeting efficiency (r = -0.64, p &lt; 0.01) and managerial control effectiveness (r = -0.58, p &lt; 0.01), whereas performance-based budgeting efficiency was positively correlated with managerial control effectiveness (r = 0.69, p &lt; 0.01). Inflationary pressure significantly predicted lower performance-based budgeting efficiency (β = -0.62, p &lt; 0.001) and lower managerial control effectiveness (β = -0.52, p &lt; 0.001). The structural model showed significant direct effects of inflationary pressure on performance-based budgeting efficiency (β = -0.67, p &lt; 0.001) and managerial control effectiveness (β = -0.39, p &lt; 0.001). Performance-based budgeting efficiency positively predicted managerial control effectiveness (β = 0.46, p &lt; 0.001). The indirect effect of inflationary pressure on managerial control effectiveness through budgeting efficiency was also significant (β = -0.31). Inflationary pressure substantially weakens performance-based budgeting and managerial controls by reducing the accuracy of cost estimates, distorting performance standards, undermining budget credibility, and complicating variance interpretation and corrective decision-making.</p> https://bmfopen.com/index.php/bmfopen/article/download/418/396