General budget support evaluability study phase 1: final synthesis report

A significant proportion of bilateral aid is increasingly being committed to General Budget Support (GBS), but is this a suitable, effective and sustainable means of channelling international support to poverty reduction? This report, written by Oxford Policy Management (OPM) and the Overseas Development Institute (ODI) for the UK Department for International Development (DFID) develops and tests a framework for GBS evaluation using cases from Uganda, Mozambique and Andhra Pradesh (AP), India.The evolution and significance of budget support is explained and a conceptual framework upon which the report is based is summarised. The framework is applied to each case, giving most consideration to whether GBS inputs and activities are in place, what the immediate effects and what the medium-term institutional effects of GBS have been, as it is assumed these will affect intermediate outcomes towards poverty reduction goals. Preliminary conclusions are made and lessons learned highlighted.GBS represents a shift away from supporting projects towards “programmatic” forms of aid. It supposedly moves away from conditionality towards more general macro-economic support with the goal of reducing poverty by improving the efficiency and effectiveness of governance institutions, policy and processes. However, the study finds that:a variety of objectives are being pursued by different governments and donors through GBS, conditions remain and the process appears fragilewhilst GBS inputs and activities are in place in Uganda, aid delivery in Mozambique and AP remains project basedfew, if any, of the postulated positive effects of GBS are automaticevidence for immediate results empowering governments is variable, though in Uganda GBS is helping public policy and expenditure management to be more properly governedGBS has improved allocative efficiency and there are grounds for optimism, and caution, regarding increased state effectiveness and improving democratic accountability, however it has not raised the predictability of fundingconcepts of “conditionality” and “partnership” are confusing, and hinder attempts to clarify operating rules.Conclusions made and lessons learned include that:purposes of GBS regarding institutional change need to be conceptualised, clearly stated and widely agreed on by donors and governmentsprogramming needs to be followed through giving attention to detail at the sector level, looking at cross-cutting administrative issues such as recruitment and staff posting systems, pay and performance monitoring and procurement and considering the accountability, efficiency and effectiveness of local governmentthere is little evidence to suggest that conditionality is an effective means of influencing policy, it also creates false donor security, therefore should be droppedoperating rules for GBS need to be explicitly stated and agreed in advance, based on the realistic framework of a multi-stakeholder club, where the economics of organisations and concepts such as “exit”, “voice” and “loyalty” are appliedimprovements in voice and restrictions on exit need to be investigated, as there is an implicit trade-off between the donors’ capacity to influence the government agenda and the ease of exit from the process.