|
Summary
Donors worldwide employ a wide range of
approaches to foreign aid, under the categories
of “project assistance” and “non-project
assistance.” These donors generally acknowledge
that the projects they manage succeed, but once
they leave, the projects tend to fail in part owing to
a lack of host country ownership. Viewed in this
light, donor efforts actively seek ways to encourage
host country participation and ownership, and some
donors believe that General Budget Support (GBS)
offers a workable alternative. GBS is one type of
non-project assistance which as a development tool
has several applications. Other kinds of non-project
assistance or “program aid” include food aid, balance
of payments support, commodity import programs,
sector assistance, and debt relief.
While most non-project assistance approaches
depend on some degree of earmarking or policy
conditionality, GBS relies on broad agreements and
an acknowledgment that appropriate development
policies are in place. Funds usually flow directly to
the finance ministry. If a recipient government
demonstrates its commitment to broad development
goals and donors agree, GBS donors participate in a
planning dialogue with central government officials
and pool their aid resources to support the government’s
development efforts. In applying this
approach, the host country finance ministry allocates
donor financing and uses its own procurement
and accounting systems, which some donors argue
is a manifestation of country “ownership” that can
lead to sustainable development.
In Mozambique, a large group of donors has decided
to move away from projects in favor of GBS, providing
a good case study to examine the conditions
under which this approach might be recommended.
Donors in Mozambique have a long history of coordination,
beginning with their humanitarian efforts
during and after the civil war. Currently, donors coordinate through a number of mechanisms, including a
group comprised of all of the GBS donors plus the
United States as an observer and donor sub-committees.
A GBS program in Mozambique has particular
appeal to some donors and has garnered their support
because of the country’s well-designed development
and poverty reduction plan.
In Mozambique there are many different donors
with a variety of views about GBS. The proportion
donor assistance provided using General Budget
Support ranges from 10 to 50 percent. Donors also
provide sector support as well as through traditional
projects, technical assistance and support to the nonprofit
and private sectors.
While GBS may contribute to sustainable development,
there are a number of risks inherent in its use.
If government institutions and management capabilities
are weak, development suffers. Mozambique has
established good planning mechanisms, but still has
extremely weak accounting and financial control systems.
Public expenditures management is weak, and
there is considerable fiduciary risk. These weaknesses
contribute to a significant risk of inappropriate
spending or outright theft.
The shift to GBS is relatively recent and there are
some donors who prefer to wait until more experience
is gained in its use. Though it is too soon to
know whether improved government performance
does result from GBS, this assessment examines the
factors necessary for GBS to work successfully in
Mozambique. Using the lessons learned from
Mozambique, it is possible to identify key factors
that should be examined in other countries where
donors are considering General Budget Support.
These lessons and recommendations are summarized
in the Evaluation Brief: “The Conditions That
Make General Budget Support Most Effective:
Mozambique Country Case Study” (PN-ACU-999).
|
|
Related documents
- 362Kb ~ 2 min (50 pages)
