The OECDDAC Evaluation Framework for Budget Support: What has it told us about impact

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The OECD-DAC Evaluation Framework for Budget
Support What has it told us about impact?

• Andrew Lawson
• Director, Fiscus Limited

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Presentation Outline

• General/ Sectoral Budget Support definitions
• Objectives GBS/ SBS as contributions to a
  Government strategy
• How budget support works understanding its
  effects
• The 5 levels of the OECD-DAC evaluation framework
• Conclusions on impact from Tanzania, Ghana the
  7 country evaluation
• How to improve attention to Impact

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GBS/ SBS Definitions a)
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GBS/ SBS Definitions b)
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GBS/ SBS Definitions c)
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Objectives of Budget Support

• Budget Support is a contribution to a partner
  Governments strategy programme of spending
• It therefore shares its Objectives !
• Thus, Budget Support has four levels of
  objectives
• In short term empower Government in its
  relations with donors (giving power over use of
  funding)
• In medium term transform the quality of
  Governance (By using a transparent budget/ policy
  process)
• In medium to long term enhance Governments
  capacity to reduce poverty
• In long term reduce poverty.

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3. How Budget Support works 3 types of effects

• Flows of Funds effects
• Additional Funding for public spending and/ or
• More fungible funding through the budget rather
  than through earmarked projects
• Endogenous policy institutional effects
• The budget becomes more important
• Public policy processes become more transparent
• Exogenous policy institutional effects
• Policy dialogue (and conditionality) changes
  policy choices
• External technical assistance strengthens
  processes

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4. 5 levels of OECD-DAC framework

• Level 1 The GBS/ SBS inputs
• Level 2 The Direct Effects (on the relationship
  between external assistance, the national budget
  and national policy processes)
• Level 3 The Outputs (consequent changes in the
  financing and institutional structure for public
  spending and public policy)
• Level 4 The Outcomes (an enhancement in the
  capacity of Government to promote growth and
  poverty reduction).
• Level 5 The Impacts (in terms of sustainable
  economic growth, poverty reduction, and in the
  case of SBS, the achievement of sector
  development objectives.)

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(No Transcript)
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Outcomes (better spending) Impacts (poverty
reduction)
Outputs (Strengthened budget policy
processes)
Direct Effects On Aid/ Budget structure
GBS/ SBS Inputs
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5. Conclusions on Impact from existing
evaluations a)

• Tanzania 2005-05 Ghana 2006-07 IDD 7 country
  evaluation (2004-06)
• Some positive findings on outcomes/ impacts
• Contributions to reduced arrears reduced
  domestic debt, with positive effects on private
  sector liquidity composition of spending -
  especially Tanzania Ghana in early stages of
  GBS
• Facilitated increases in poverty-related
  spending, especially Education with resulting
  expansion of enrolments per pupil spending
  most notable in Tanzania, Uganda, Ghana
• Generalised improvements in PFM systems
  especially Tanzania, Uganda, Rwanda, Mozamabique.
  

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5. Conclusions on Impact from existing
evaluations b)

• Reservations about Poverty impact
• Tanzania - Evaluation expressed concerns over
  pro-urban focus of spending and over slowness of
  agricultural marketing liberalisation
• Ghana Evaluation expressed concerns over
  weakness of GPRS and poverty policy in general
  and over policy mistakes in Health
• 7 country study emphasised data difficulties.
• None of the evaluations were sufficiently well
  resourced to address Impact effectively.
• In all cases primary interest of audience was on
  inputs/ outputs process issues.

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6. How to improve assessment of Impact a)

• Quantify more carefully the changes in funding
  composition (GBS/ Other Aid/ Domestic resources)
  and the changes in spending/ borrowing
  experienced
• Dedicate resources to examine Outcomes Impact
  of Governmnet Budget Policy Support
• Examine evoluation of poverty and how it might be
  related to policy changes useful to time GBS
  evaluation to coincide with Poverty surveys
• Examine sector specific outcomes Education,
  Health, Infrastructure, Agriculture again
  timing survey to coincide with PERs/ sector work
• Examine changes in environment for private sector
  development and their relationship to policy
  changes.

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6. How to improve assessment of Impact b)

• Worry less about Attribution !
• Project vs. GBS debate may be irrelevant Large
  scale budget support (or debt relief) has no
  plausible alternative modality because such large
  amounts of quick disbursing resources cannot be
  provided through other modalities (projects or
  common basket funds).
• Is Government responsible or are Donors? again
  probably not a relevant question (so long as
  funding is clearly needed) because choosing the
  right partner and making partnerships work are
  crucial elements of budget support
• Banks take responsibility for choosing the
  wrong lenders, why should Donors and
  Multilaterals not be judged the same way?