What has the Department for International Development’s (DFID’s) independent evaluation study of General Budget Support (GBS) in Mozambique and Andhra Pradesh (AP) shown? What are the lessons to be learnt for future policy-making? How have policies, programmes and projects affected poverty reduction? This study, produced by Oxford Policy Management and the Overseas Development Institute, is being used for a joint global formative evaluation of General Budget Support.
Mozambique has relatively good policies, and more recently, lots of growth. However, in practice there is widespread public perception that much aid is wasted on poorly conceived projects. The case of Andhra Pradesh produces findings that in some ways support conclusions that GBS is an appropriate, effective and efficient instrument of poverty reduction.
In countries as aid-dependent as Mozambique, donors are reluctant to put all their resources into one aid modality and instead prefer a range of different options. GBS is succeeding in Andhra Pradesh. Budget support has enabled DFID to begin discussions with the government on a range of reform issues for which it previously had no platform. Additional findings from the report include:
- In Mozambique, the most immediate impact of GBS is the premium that it places on effective donor co-ordination, one of the successes of the Joint Donor Programme to date.
- In Mozambique, major risks to the success of GBS include concerns over government commitment to the improvement of standards and weak relationships between budget planning and execution.
- In Mozambique the sustainability of GBS is uncertain. It is unlikely donors will continue to support a programme without clear improvements in public resource management.
- The government in AP views partnership as the key element of GBS, enabling donors to put difficult issues on the table.
- GBS takes a long time to organise in AP. The institutional challenge of creating capable, effective and accountable states is a difficult one.
- There is a strong impression in AP that GBS has been about the development of organisational positions rather than a shared multi-donor position.
In Mozambique there is a need to reach common agreement between disparate donors over the policy matrix that will be attached to future GBS. In AP, the jump from ‘project land’ to GBS is not easily made and DFID need to understand the broad policy issues before entering into government negotiations. Further policy implications include:
- In Mozambique there is a need to clarify how government success will be measured in meeting policy targets.
- In Mozambique it is important to enhance the predictability of financial flows to support medium-term fiscal planning.
- Concerning Mozambique, proposals to move toward a mixture of fixed and variable tranches in their GBS programme should be studied further by DFID.
- In AP there is a need for advocacy between donors and then a discussion of the common donor position with both state and central government at the early stages of GBS processes.
- Central support of country offices in AP needs to be strengthened, in particular in areas of assessment and design.
- The threat of withholding budget support will not force the government in AP to undertake further policy reform. Therefore medium term commitment is needed for medium term benefits.
