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During the past two decades some donor countries have changed the way they work, contributing parts of their development assistance directly to partner countries’ budgets. The aim of this type of support is to better align support with country policies and to reduce the burden of multiple, fragmented aid projects. Budget support, as this type of aid is known, also attempts to strengthen country financial and management systems by using them, and, ultimately, to achieve better development results through more efficient, effective spending.

There is growing interest from various stakeholders in assessing the impacts of budget support and finding out whether or not budget support is indeed an effective way to support poverty reduction. The OECD DAC Evaluation Network has developed a methodology to evaluate budget support, for assessing the chain of results and induced impacts of support at country level. The methodology was tested in evaluations of budget support in Tunisia, Mali and Zambia in 2010/2011. These pilots informed revision of the methodological approach, which was agreed to as a useful basis for further work in 2012. Evaluations are now underway in Morocco, Tanzania, Mozambique and Burundi. 

 Further reading:

• Conference on Budget Support "Budget Support: Policy, Prejudice and Practice", organised by the Dutch Ministry of Foreign Affairs, November 2012 
• Workshop on Evaluating Budget Support, 21-22 March 2012: Draft Agenda; Workshop Report
• Multi-Donor Budget Support: Only Halfway to Effective Coordination, September 2011, German Development Institute
• The future of EU budget support: political conditions, differentiation and coordination, May 2012, Overseas Development Institute

First joint evaluation of budget support

A first major joint evaluation of budget support in 2004 to assess the extent to which, and under what circumstances, budget support is relevant, efficient and effectivefor achieving sustainable impacts on poverty reduction and economic growth. The evaluation was commissioned by a consortium of donor agencies and seven partner Governments under the auspices of the DAC Network on Development Evaluation. This evaluation mainly addressed the process but did not focus on the chain of results of budget support. The more recent work (above) has gone a step further to look at the devleopment results achieved through budget support operations. 

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