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Budget support is aid provided directly to a partner government's central exchequer, and aims to reduce poverty through helping to fund the poverty reduction strategy of the beneficiary country. DFID's use of budget support has risen to £461 million, representing nearly twenty per cent of bilateral expenditure. Budget support has been designed to improve aid effectiveness by reinforcing developing country policies and systems, and reducing transaction costs. Despite having provided budget support in some countries for many years, however, the Department has not established whether it is in practice cost-effective. DFID's main criterion for providing budget support is that benefits must outweigh the risks, a judgement which is assessed subjectively by country teams. DFID assesses weaknesses in financial systems but rarely estimates the associated risks of corruption or waste of UK funds. DFID's monitoring has basic weaknesses in specifying suitable indicators and tracking progress against objectives. Bodies such as Parliaments, State Audit Offices and civil society organisations can provide effective challenge to governments and ensure that the poor benefit from budget support funding. DFID has not historically paid sufficient attention to strengthening domestic accountability. DFID also has a responsibility to UK stakeholders to demonstrate that funds have been spent effectively.
Budget support is aid provided directly to a partner government's central exchequer, and aims to reduce poverty through helping to fund the poverty reduction strategy of the beneficiary country. DFID's use of budget support has risen to £461 million, representing nearly twenty per cent of bilateral expenditure. This study examines the aims of budget support, what it is achieving, how DFID manages the risks of using it and how DFID takes individual funding decisions. The report finds that budget support has: often enabled partner governments to increase expenditure on priority areas; resulted in partner governments providing more services, particularly in health and education; helped increase the capacity of partner governments to plan and deliver services effectively and to develop better poverty-focused policies; helped partner governments to strengthen their financial management systems and encouraged other donors to support such reforms; facilitated donor alignment to, and support for, the developing nation's own strategies; and reinforced existing economic stability and good economic management. But evidence on whether budget support has yielded better value for money than other forms of aid is not conclusive. While budget support has some advantages compared to other forms of aid, it also carries significant risks which need to be better managed. Monitoring achievement is challenging, and DFID does not always set out what it expects to achieve or by when. Formal monitoring frameworks do not always track progress in remedying weaknesses in financial systems. And monitoring of human rights - one of the key criteria for giving budget support - is not yet systematic. Weaknesses in available statistics continue to limit the ability to monitor results. Developing country governments may not be capable of using UK funds efficiently and effectively or may misuse them for political reasons or through corruption.
Pt. 1. Challenges and opportunities -- pt. 2. Power, procedures and relationships -- pt. 3. The way forward.
The Politics of Evidence and Results in International Development critically examines the context and history of the current demands for results-oriented measurement and for evidence of value for money.This book will inspire development professionals and organizations to cultivate their political skills.
The Government recognises that aid spending has sometimes been controversial at home because people want to know that it is squarely in the UK's national interest. Recent crises have proved, though, why aid is so important for us as well as for the countries we assist. The 2015 Spending Review is therefore being used to fundamentally review how this budget is spent. Spending will be shaped according to four strategic objectives. The strategy sets out how, as a result of the new approach, we will: allocate 50% of all DFID's spending to fragile states and regions; increase aid spending for the Syrian crisis and the related region; end all traditional general budget support - so we can better target spending; use an expanded cross-government Conflict, Stability and Security Fund (CSSF) to underpin our security objectives by supporting the international work of the National Security Council (NSC); create a £500 million ODA crisis reserve to allow still greater flexibility to respond to emerging crises such as the displacement of Syrian refugees; fund a new £1 billion commitment to global public health (the "Ross Fund") which will fund work to tackle the most dangerous infectious diseases, including malaria. The fund will also support work to fight diseases of epidemic potential, such as Ebola, neglected tropical diseases, and drug resistant infections; and use a new cross-government Prosperity Fund, led by the NSC, to drive forward our aim of promoting global prosperity.
The Committee's report reviews the Department for International Development's 2007 annual report (HCP 514, session 2006-07, ISBN 9780102945195), focusing on issues of efficiency and effectiveness. The Committee welcomes the increase in the DFID's budget under the Comprehensive Spending Review Settlement for 2008-11, in line with the target of 0.7 per cent of Gross National Income to be allocated to Official Development Assistance by 2013. However, it notes the significant challenge for DFID in using this funding effectively when it is also required to reduce its administrative costs, and therefore staff numbers, at a time when its focus is shifting increasingly towards fragile states where providing assistance is resource-intensive. Concerns are raised that DFID continues to emphasise inputs rather than outcomes, although DFID's new Public Service Agreement Delivery Agreement and the plans to establish the Independent Advisory Committee on Development Impact should make it easier to identify whether DFID's expenditure is effective in reducing poverty in developing countries. Four areas for improvement in DFID's work are highlighted relating to gender equality, climate change, governance and agricultural development.
Why is aid contested?. The aid industry defined. How the thinking about aid and international development has evolved. Development projects: rationale and critique. Hard-nosed development: reforms, adjustment, governance. Country-led approaches and donor coordination: can the aid industry let go?. Development's poor cousins: environment, gender, participation, rights. How does the industry knows what works and what doesn't. Challenges for the 21st century