The result, say DFID officials in Africa, is that they are able to direct large amounts of money to areas of greatest need, including putting millions of pounds directly into government budgets. Speaking on a visit to Malawi, Mr Benn added that routing aid through African governments makes them more accountable to those it is supposed to benefit.
Tim Worstall agrees in part. He likes the direct payment to the poor, but dislikes paymens through government budgets:
Given my views on governments, this doesn't strike me as all that good an idea. Most especially given my view that most poor countires are in fact poor because they have grasping, venal and incompetent governments, this really doesn't strike me as a good idea. But I'm aware that there are those who hold different opinions on this matter.
There are indeed those who hold a different opinion on this. The main reasons that we give money in the form of Budget support are:
- all countries, rich and poor, need governments that are accountable, capable and responsive to their people. If services such as education and health are provided directly by other agencies – such as international donors – then there is no accountability of the providers to the intended beneficiaries; the results will be weak and marginalized governments, and unresponsive services;
- though there are short-term needs to get essential services to people, the only long run, sustainable solution for these countries is to run the services themselves; if we set up parallel systems that hire the trained people away from government, we delay, rather than accelerate, the day when these countries can build sufficiently strong and effective systems for themselves;
- the services can only be delivered cost-effectively as part of a joined-up system; you don't want an AIDS clinic separate from a vaccination centre in the same town: you want a single health centre; if you are building schools then you need to train teachers or procure text books. So a bunch of separate initiatives to provide specific services in particular places will be very inefficient compared to building an effective, joined up service.
- in the past, we have ignored and bypassed poor financial management (or even corruption) in governments in poor countries because we can work around them; we cannot do that if we are going to put British taxpayers' money into those systems, so giving budget support forces us – and everyone else – to tackle one of the long-term causes of poor government.
My view is not just speculation or ideology. Here is an independent, international review of Budget Support. There is a lot of evidence gathered there. The summary says:
when a developing country’s government has the political will to reduce poverty, budget support can be an effective way for donors to deliver aid. Overall, it has helped to strengthen the relationship between donors and developing country governments, and encouraged better coordination between different donors. It has helped to strengthen planning and budget systems, making them more transparent and therefore accountable. It has also helped to prioritise areas of expenditure that target the poor like health and education.The team of evaluators found no clear evidence that budget support funds were, in practice, more affected by corruption than other forms of aid.