On supporting African Governments directly

Chris McGreal has a piece in the Guardian today about DFID's work in Africa. (Disclosure: I work for DFID).  Chris McGreal says:

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.

4 thoughts on “On supporting African Governments directly”

  1. "when a developing country’s government has the political will to reduce poverty,"

    Yes, that’s the bit I don’t believe. I don’t believe it about the UK government either. Climbing the greasy pole is about getting and exercising power and enjoying the trappings of having done so.

    Cynical, yes, perhaps extreme, but there’s more than a grain of truth to it.

  2. Tim

    Your beliefs are very interesting; but I’ve just pointed you at a bunch of real world experience that shows that, despite what you think ought to be true, budget support works.

    Owen

  3. Hi Owen,
    The summary of the document you posted sums up for me some of the key probs with DBS as an approach. There is no doubt it has improved the relationship between donors and recipient governments but what is lacking is credible evidence of how effectively the money is spent from then on. As someone very familiar with Zambia, a DBS success story, it is all too apparent that the GRZ lacks the capacity to spend the money. Making grand statements at budget time etc is one thing, but when it gets down to actually disbursing funds or procuring goods and services the process is slow, complex and open to corruption. The distance between donors and the government saying that school fees are abolished (as was the case in Zambia) and that actually happening on the ground is enormous. Primary school in Zambia is not free and continues to be out of the reach of many families when one takes into account the need to purchase uniforms, books etc, not to mention less legitimate ‘fees’ levied by individual schools.
    Ironically much of the problem of DBS expenditure comes down to the capacity of government ministries to process funding. Having been pared back to the minimum over the past couple of decades, they are now being asked to spend down on serious sums of money and often lack the staff to do so transparently and effectively.
    DBS is great for the donors as it allows them to disburse large amounts of money in a coordinated and transparent (for them) way. No one can argue with the bullet points in your article in terms of theory, sadly as is too often the case, the gap between that policy reality is a long way from being bridged. I hope I am proved wrong in the future!

  4. Budgetary support is akin to making payments to a gambling
    addict and and telling him to look after his family with the grant.

    The reasons  you offer
    at points 1-4 in support of this latest development thinking contains flawed
    logic:

    At bullet 1, you assume that accountability is enhanced
    where governments have control of the purse-strings and an exclusive mandate
    over the affairs of their country. I am not sure that this is correct, and an
    abundance of evidence also suggests this is the case. Efficient policy is
    neither the aim of  government, nor
    viewed as such by an electorate. Crude plays to ethnicity, pork barrelling etc
    are the mainstays of democracy in many developing countries and these will have
    no bearing on the efficiency with which budgetary support is allocated.

    At bullet 2, you (correctly) point out that the only
    sustainable solution is for countries to run public services themselves.
    However, you incorrectly surmise that this can be attained by giving
    governments the resources to facilitate this ‘independence’: governments will
    behave efficiently when it is demanded of them by their electorate – and this
    can only occur where the electorate has sufficient power to make such demands.
    Given the reality that many governments have a vested interest in preventing
    such a scenario unfolding, it therefore looks a little naïve to suggest that increasing
    the power of government will, by axiom, increase the power of the people.

    At bullet 3, you assume that governments are able to deliver
    such services efficiently (or at all). This misses the point that civic
    organisations can also be cajoled into achieving economies of scale and that
    there will be ‘more bang for the buck’ as spending can be more tightly
    monitored.

    In bullet 4, you say that we will now be encouraged to
    tackle corruption head on. Firstly, this assumes that programme heads will see
    where corruption is taking place (difficult to do from Glasgow
    or London?).
    Secondly, it assumes that recipient governments will actually listen!
    Competition amongst donor countries means that money can always be sought
    elsewhere (China?)
    If the recipient country doesn’t like the beat drummed by DFID, it will march
    elsewhere.

    Owen, governments in developing countries will change for
    the better when the local electorates can force such change. Until local middle
    classes hold this power, the British taxpayer is throwing good money after bad.

     

     

     

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