Working Paper 167 - Promoting Economic Reforms in Developing Countries Rethinking Budgetary Aid?
AbstractThis paper examines donor practices in the use of budgetary aid to promote economic and structural reforms in developing countries, notably those of Africa. It is based on an observation in recent literature to the effect that, despite its increased use since its advent in the 1980s, budgetary aid appears to have had limited impact on the design and implementation of economic reforms in developing countries. To remedy this situation and reposition budgetary aid as a catalyst for structural reforms in recipient countries (one of this instrument’s fundamental objectives), and to strengthen the linkages between fund transfers to national treasury accounts and implementation of profound and far-reaching reforms in support of growth and job creation, the paper proposes a new instrument for donors, namely Enhanced Budget Support (EBS). The latter seeks three major objectives: i) devote budget support to the implementation of reforms requiring the creation of intangible assets, an area in which it has a comparative advantage; ii) clearer identification of the changes in economic behaviors and, therefore, the results, targeted by the reforms and iii) align budget support financing with the estimated budgetary cost of the structural reforms to be pursued, an approach which few donors have adopted today. Apart from enhancing transparency, this approach would afford the stakeholders the means of more fully guaranteeing accountability, thereby strengthening the link between budget support and implementation and, consequently, the outcomes of reforms. The challenges often mentioned in assessing the budgetary cost of reforms, can be overcome.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by African Development Bank in its series Working Paper Series with number 446.
Date of creation: 26 Feb 2013
Date of revision:
Contact details of provider:
Postal: 15 Avenue du Ghana P.O.Box 323-1002 Tunis-Belvedère, Tunisia
Phone: (+216) 71 10 39 00
Fax: (225) 21.77.53
Web page: http://www.afdb.org/en/knowledge/publications/
More information through EDIRC
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stefan Koeberle & Zoran Stavreski & Jan Walliser, 2006. "Budget Support as More Effective Aid? Recent Experiences and Emerging Lessons," World Bank Publications, The World Bank, number 6958, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Adeleke Oluwole Salami).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.