Sustainable Development

Budget Support as More Effective Aid?: Recent Experiences by Stefan Koeberle, Jan Walliser, Zoran Stavreski

By Stefan Koeberle, Jan Walliser, Zoran Stavreski

Price range help has turn into an more and more vital software within the context of a partnership-based method of improvement tips. in comparison to conventional modes of reduction supply, it delivers better kingdom possession, lowered transaction expenditures, higher donor coordination, scaling up of poverty aid and possibly larger improvement effectiveness. This e-book provides a well timed and beneficial assessment of key thoughts, matters, reports and rising classes suitable to funds aid. It presents an outline of significant features, expectancies and issues relating to funds help, key layout and implementation concerns, in addition to a few sensible reports. The participants comprise executive representatives from constructing international locations, major educational students, bilateral improvement firms and improvement practitioners from foreign monetary associations, together with the area financial institution and the overseas financial Fund. They current quite a lot of perspectives on key matters akin to the alternative of tools, alignment of funds aid with kingdom courses, predictability, and coordination and conditionality. The authors draw their insightful research at the modern study and assessment paintings, in addition to the large sensible adventure with price range aid. This publication can be of serious curiosity to practitioners in aid-recipient international locations and overseas monetary associations, bilateral enterprises and civil enterprises eager about finances aid.

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Extra info for Budget Support as More Effective Aid?: Recent Experiences and Emerging Lessons

Sample text

In the past, policy-based lending and other forms of development assistance focused on policy actions and did not always pay enough attention to intended outcomes (see, for instance, World Bank 2001a and OED 2003). Today, a sharper focus on achieving and measuring development results has promoted better monitoring and evaluation of development programs. In particular, the Millennium Development Goals have provided an impetus for greater aid effectiveness with a strengthened focus on measuring and delivering results.

To the extent that budget support helps to simplify disbursement procedures and reporting requirements, it further facilitates the scaling up of development aid. Budget support involves the channeling of donor funds to a partner country using its own budget system, in support of the country’s own development programs linked to national or sector policies. The value added of budget support consists in the combination of an increase in the volume of discretionary funding that can be used for development purposes with a policy dialogue linked to the effective implementation of the recipient’s broader development strategy.

Brautigam (2000) and Moore (1998) have found that high levels of aid tend to dampen the incentives for governments to remain accountable to their citizens and to further develop their own revenue sources. Donors’ approaches vary. Over the past few years, the World Bank’s policy-based lending has mainly followed a programmatic approach to assessing a country’s overall progress, based on flexible expected prior actions (or “triggers”) (Koeberle 2005). This approach allows for a graduated response to variable country performance, potentially combining variations in the amount, recalibration of the program, or delay of the operation (World Bank 2005j).

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