Pavement performance models (PPMs) are utilized to predict pavement network conditions which is an essential part of any sustainable pavement management system (PMS). The reliability of a PMS and its outputs is proportional to the reliability of the PPM used. This article describes a mechanistic–empirical pavement performance model based on pavement response parameters—strains calculated in the pavement layers measured by tensometers embedded in the pavement surface and verified by calculations in the elastic half-space model and supplemented by empirical data from long-term pavement performance monitoring and accelerated pavement testing. Hence, the herein described PPM combines pavement serviceability evaluation, pavement bearing capacity, and the physico-mechanistic properties of paving materials. The analytical methods which were used to ascertain the physico-mechanistic characteristics, the material fatigue degradation model, and the surface degradation, unevenness in particular, are described. A comparison of the empirical PPM created in the last century used by the national road administrator to this day and the newly created PPM is presented. The comparison shows the difference in the calculated socio-economic benefits and subsequent cost–benefit analysis results. The comparison shows that the use of the old PPM may have produced false economic evaluation results that have led to poor decision making, partially explaining the unsustainable trend of road network management in our country.