Governments set various goals in five-year plans and target-based accountability systems, which frame their policy attentions and task scopes, and have profound consequences for government behaviors and social welfare. This paper reviews the literature and incorporate theories on principal-agent model, information asymmetry and incentive compatibility, performance feedback, and bureaucratic accountability to develop an integrative theoretical framework to understand the effects of goal-setting and performance gap on government behaviors. I suggest focusing on economic growth, environmental protection, and other policy domains at provincial and prefecture-level to empirically examine the impacts of goal-setting and performance gaps on organizational learning, innovation, gaming and risk-taking. The proposed research will help to optimize goal-setting and management, facilitate organizational innovation, mitigate unintended strategic reactions, and improve public service performance.

Government Performance Measurement, Management by Goal, Performance Gap , Strategic Behavior, Gaming