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

, by Koeberle, Stefan; Stavreski, Zoran; Walliser, Jan; Practitioners' Forum on Budget Support

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ISBN: 9780821364635 | 0821364634
Cover: Paperback
Copyright: 4/15/2006

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Is Development Aid More Effective if it is Provided Directly to a Recipient country's budget? What exactly is budget support? Why has it emerged as a promising financing approach? What is the evidence that it can deliver on its potential for reducing transaction costs, ensuring predictable financing, increasing country ownership, and strengthening domestic accountability?

Foreword

Editors' Preface

xvii

Contributors and Discussants

xix

Abbreviations and Acronyms

xxiii

PART I: INTRODUCTION

(44)

Budget Support: Concept and Issues

(24)

Stefan Koeberle

Zoran Stavreski

Context for the Emergence of Budget Support

(2)

Definitions, Key Characteristics, and Rationale for Budget Support

(5)

When Is Budget Support Appropriate?

(6)

Key Issues in Design and Implementation

(7)

Summary and Conclusions

(4)

Managing Fiduciary Issues in Budget Support Operations

(18)

David Shand

Fiduciary and Developmental Objectives: Two Sides of the Same Coin

(4)

Issues in Fiduciary Risk

(2)

Using Public Financial Management Diagnostic Information

(1)

Measuring and Calibrating Fiduciary Risk

(2)

Strategies to Manage and Mitigate Fiduciary Risk

(3)

Is Budget Support Improving PFM?

(5)

PART II: RECENT EVALUATIONS OF BUDGET SUPPORT

(108)

Poverty Reduction Support Credits (PRSC): A Stocktaking

(34)

John M. Factora

Operationalizing the PRSP

(7)

PRSP Alignment: Content and Coverage

(9)

Harmonization and Predictability

(13)

Conclusions

(3)

European Commission Budget Support: An Innovative Approach to Conditionality

(10)

The European Commission's Approach: How Does it Work?

(2)

EC Approach: What is the Rationale?

(2)

EC Approach: What Does the Review of Experience to Date Show?

(6)

A Framework for Evaluating General Budget Support

(14)

Mike A. Hammond

Evolving Goals of Budget Support

(2)

Purpose, Subject, and Scope of the Evaluation

(2)

The Evaluation Framework

(3)

Implementing the Evaluation

(7)

General Budget Support: Key Findings of Five Usaid Studies

105

(11)

Issues Analyzed

106

(10)

Conclusions

116

(1)

Does General Budget Support Work? Evidence from Tanzania

116

(23)

Andrew Lawson

David Booth

Meleki Msuya

Samuel Wangwe

Tim Williamson

How Can We Judge Success?

121

(1)

The Tanzanian Context

122

(1)

Findings

122

(13)

Overall Conclusions

135

(1)

Learning from Tanzania

136

(3)

General Budget Support and Public Financial Management Reform: Emerging Lessons from Tanzania and Uganda

139

(14)

Tim Williamson

The Hypothesis

139

(2)

Direct Effects of General Budget Support Funding in Tanzania and Uganda on Public Financial Management Outcomes

141

(5)

Major Factors behind Improvements in Public Financial Management Systems

146

(1)

The Role of Nonfinancial General Budget Support Inputs in Improving Public Financial Management Systems

147

(2)

Conclusions and Their Implications

149

(4)

PART III: ALIGNING BUDGET SUPPORT WITH COUNTRY PROGRAMS

153

(60)

PRSPS and Budgets: A Synthesis of Five Case Studies

155

(38)

Rosa Alonso

Lindsay Judge

Jeni Klugman

Data Production, Availability, and Use

157

(6)

Budget Formulation and the PRSP---Has the PRSP Process Increased the Openness and Transparency of the Budget Process?

163

(10)

Accountability for Expenditures and Results

173

(4)

Costing and Consistency with Overall Macroeconomic Framework

177

(9)

Donor Coordination and Alignment with PRS Priorities and Predictability and Variability of External Financing

186

(3)

Conclusions

189

(4)

Reconciling Alignment and Performance in Budget Support Programs: What Next?

193

(20)

David Booth

Karin Christiansen

Paolo de Renzio

The Broad Problem: PRSPs as a Two-sided Deal

194

(2)

The Particular Problem: PRSP Annual Progress Reports and Performance Assessment Frameworks for Budget Support

196

(3)

Why PRSP Monitoring Is Not Working

199

(4)

Reforming Performance Assessment Frameworks: Toward Results-based Conditionality?

203

(2)

The Alternative

205

(3)

Conclusion

208

(5)

PART IV: PREDICTABILITY OF BUDGET SUPPORT

213

(52)

Predictability of Budget Aid: Recent Experiences

215

(14)

Oya Celasun

Jan Walliser

Data on Budget Aid

217

(3)

Budget Aid Flows: How Unpredictable Are They?

220

(5)

Intrayear Predictability of Budget Aid

225

(1)

Conclusions

226

(3)

Improving the Dynamics of Aid: Toward More Predictable Budget Support

229

(36)

Benn Eifert

Alan Gelb

Aid Instability: Some Stylized Facts

232

(4)

Cushioning Expenditures through Reserve Management and Fiscal Rules

236

(5)

How Risky Are Multiyear Aid Commitments?

241

(11)

Calibrating Budget Support: Performance Levels versus Changes?

252

(3)

Developing Performance-based Norms to Guide Aid Allocations

255

(10)

Conclusion

265

(1)

PART V: BUDGET SUPPORT COORDINATION AND CONDITIONALITY

265

(86)

World Bank Conditionality: Trends, Lessons, and Good Practice Principles

267

(28)

Stefan Koeberle

Jan Walliser

Conditionality: Definitions, Modalities, and Approaches

268

(4)

Trends in World Bank Conditionality

272

(4)

Applying Conditionality

276

(8)

Key Messages of the Conditionality Review

284

(2)

Good Practice Principles

286

(9)

Budget Support, Conditionality, and Impact Evaluation

295

(16)

Jan Willem Gunning

The Case for Results-based Aid

295

(2)

Aid as a Contract

297

(4)

Implementing Results-based Aid: Design and Experience

301

(2)

Shocks, Results, and Predictability

303

(3)

Impact Evaluation

306

(2)

Conclusion

308

(3)

Trust, Conditionality, and Aid Effectiveness

311

(22)

Paul Mosley

Suleiman Abrar

Intuitive Foundations

312

(4)

The Model

316

(5)

Econometric Tests

321

(3)

Evidence from Case Studies

324

(6)

Policy Conclusions and Recommendations

330

(3)

Fungibility, Prior Actions, and Eligibility for Budget Support

333

(18)

Oliver Morrissey

Approaches to Improving Aid Effectiveness

333

(2)

A Model of Selectivity through Prior Actions

335

(4)

Government Spending: Fungibility, Allocation, and Effectiveness

339

(2)

Conclusions and Policy Implications

341

(10)

Good Practice Note on Harmonization

344

(3)

Good Practice Note on Memorandum of Understanding

347

(4)

PART VI: COUNTRY EXPERIENCES

351

(40)

Budget Support, Aid Dependency, and Dutch Disease: The Case of Uganda

353

(18)

Michael Atingi-Ego

Patterns and Composition of Budget Support to Uganda, 1993--2003

354

(2)

Implications of the Increase in Budget Support

356

(9)

Prices of Tradables versus Nontradables

365

(1)

Exchange Rate and Export Sector Competitiveness

366

(1)

Policy Recommendations and Conclusions

367

(4)

Budget Support in Mozambique

371

(4)

Gregor Binkert

Jose Sulemane

MOU, Dialogue, Trust Building, and Harmonization

371

(1)

Planning and Budgeting

372

(1)

Monitoring and Evaluation of Budget Support

373

(1)

Accountability

373

(1)

Institutional and Human Capacity Building

374

(1)

Afghanistan: Budget Support in a Postconflict Environment

375

(2)

Wahidullah Shahrani

Budget Support and Poverty Reduction in South Asia

377

(14)

Shantayanan Devarajan

Shekhar Shah

Addressing South Asia's Development Challenges with Budget Support

379

(8)

Challenges Facing Budget Support in South Asia

387

(4)

PART VII: DONOR PERSPECTIVES ON BUDGET SUPPORT

391

(60)

International Monetary Fund Perspective on Conditionality

393

(4)

Atish Ghosh

Purposes of IMF Conditionality

393

(1)

2002 Conditionality Guidelines

394

(1)

Lessons for Donors Providing Budget Support

395

(2)

Ending Policy Conditionality: The Recent Shift in the United Kingdom's Aid Policy

397

(10)

Nick Amin

Rationale for a New Conditionality Framework

399

(1)

How Will the New Policy Be Implemented?

400

(3)

Implications for Budget Support and Cooperation with Development Partners

403

(2)

Conclusion

405

(2)

Germany's Perspective on Budget Support

407

(4)

Ingrid-Gabriela Hoven

Direct Budget Support, Disbursement Mechanisms, and Predictability

411

(20)

The Use of Direct Budget Support

412

(2)

Causes and Consequences of Lack of Predictability

414

(2)

Graduated Response Mechanisms

416

(8)

The Way Forward

424

(7)

Budget Support and Aid Effectiveness: Experience in East Asia

431

(16)

Hiroto Arakawa

Definitions

432

(1)

Roles of Budget Support

433

(3)

Aid Coordination and Harmonization in Vietnam and the Philippines

436

(4)

Conclusion and Implications for Future Assistance to Africa

440

(7)

The Netherlands: Country Selectivity and Aid Modality Choices

447

(4)

Maarten Brouwer

PART VIII: PRACTIONERS' FORUM ON BUDGET SUPPORT: DISCUSSION AND CONCLUDING REMARKS

451

(28)

Summary of Discussion

453

(10)

Budget Support: Concept, Instrument Choice, and Fiduciary Aspects

453

(2)

Programmatic Alignment, Ownership, and Accountability

455

(2)

Predictability and Macroeconomic Impact of Aid

457

(2)

Donor Coordination and Conditionality

459

(4)

Forum Participants' Concluding Remarks

463

(16)

Louis Kasekende

463

(2)

Tertius Zongo

465

(1)

Nick Amin

466

(3)

Alan Gelb

469

(1)

Mark Plant

470

(4)

Jerome Morris Wolgin

474

(1)

James Adams

475

(4)

References

479

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

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

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