I’ve got a piece up on the CGD blog about a new evaluation of budget support, which finds that budget support helps to improve capacity for financial management and accountability in developing countries.
I’ve been a long-time advocate of budget support, as I think it is a very important way to reduce some of the possible negative impacts of aid, such as undermining the systems of recipient governments, and reducing their accountability. It is good that the anecdotal evidence on which the policy is based has been backed up by this more comprehensive, rigorous and independent review.
Hilary Benn, the UK development minister, was more effusive:
Mr Benn said Britain provided 25% of its aid directly to governments and, in addition to boosting health and education spending, there had been better management of public finances, greater transparency and more effective coordination between donors. …
The development secretary said he reserved the right to stop donating to governments that failed to meet expected standards of governance and human rights. Britain has cut off aid to Ethiopia and Uganda over alleged human rights abuses, and in Zimbabwe the UK is
prepared to back only specific projects, such as HIV/Aids assistance.
See also the BBC report here.