Budget Support

Budget Support and Program Approaches

The current consensus around how to deliver aid more effectively (expressed most clearly in the 2005 Paris Declaration on Aid Effectiveness), emphasises the importance of donors moving away from delivering aid through a multitude of projects towards support for national development programs (called Program Approaches), including through delivering aid directly to government budgets (called Budget Support).

This consensus is motivated by concerns that project aid creates significant administrative burdens, creates coordination challenges in achieving system-wide change, often by-passes government institutions, are often closely controlled by donors and make large-scale increases in spending difficult. In contrast Program Approaches and Budget Support suffer far less from these problems and offer significant opportunities for delivering aid more effectively. A range of evaluations of the use of Budget Support have highlighted the positive development impacts it has made in a range of countries (see links below).

The Paris Declaration committed the major international donors to deliver 2/3 of their aid through Programme-Based Approaches (PBAs) by 2010 (indicator 9) and to halve the amount of aid they deliver outside of government systems for financial management and procurement (indicator 5a). By 2011, little to no progress had been made towards reaching the target of 66% of aid provision through PBAs whilst the 2011 Survey could not establish if the commitment for using recipient-country public financial management systems had been met.

UK approaches to Budget Support and Program Approaches

The UK government delivers more Budget Support than any other donor. Whilst in 2008/9 globally only around 6% of aid was delivered through Budget Support, 27% of the UK’s bilateral aid and 39% of its bilateral aid to sub-Saharan Africa was delivered in this way.

The UK is also a global leader in delivering aid through Program Approaches and it had reached its Paris target of delivering 2/3 of its aid in this way back in 2007.

UKAN members welcome the UK government’s performance in delivering aid through Budget Support and Program Approaches, and also the 2009 White Paper commitment to increase the UK’s support for accountability activities carried out by parliaments, audit institutions and civil society organisations in recipient countries to a level equivalent to 5% of budget support.

UKAN continues to engage with the UK government on budget support Program Approaches and recommends that the following steps be taken:

  • To review the use of conditionality in the UK’s budget support in order to better support ownership and to focus on the most critical conditions.
  • To deliver increased spending on accountability in a strategic and informed way, focussing on the most crucial gaps that exist in support to these activities.
  • To strengthen aid agreements with recipients so that there is absolute clarity on the terms of budget support and processes for dialogue and review where concerns arise.
  • To provide stronger guidance to and monitor more closely performance of country offices on their use of Budget Support and Program Approaches

Useful resources

UKAN Policy Paper 2: Budget Support and Country-led Aid

OECD Joint Evaluation of General Budget Support 2006; Synthesis Report and 7 Country Reports

Mokoro Study of Sector Budget Support in Practice

Working Party on Aid Effectiveness, Report on Progress since Paris (working title) (2011)