Budget support as more effective aid? Recent experiences and emerging lessons
Making Aid More Effective Through Budget Support
Shantayanan Devarajan, Bank Chief Economist, posed a question: given that public sector reform is needed, that old-style conditionality doesn’t work, and that aid is more or less fungible, what is the best instrument to achieve development and poverty reduction? He also illustrated these three facts with his experiences in the Punjab, Pakistan. Andrew Lawson, Head of the Centre for Aid and Public Expenditure, made the case for providing budget support in a coherent way and in the right context. Steve Radelet, Senior Fellow at the Center for Global Development, suggested a ratings method to encourage countries to improve overall policy and governance stance and quality of public financial management to qualify for budget support. Nicolas van de Walle, Associate Dean for International Studies at Cornell University, pointed out that a critical mass of support is needed. Scholar then asked panelists how they would select appropriate circumstances for budget support, and how they derive the most benefit from it. Panelists also responded to audience questions. Scholar summed up by noting that budget support offers benefits, but the circumstances must be chosen correctly.