What we know about the effectiveness of budget support: Evaluation Synthesis

Abstract

For a number of years, budget support has been a preferred aid modality for implementing the principles of effective aid formulated in the 2005 Paris Declaration. Various evaluations find that aid provided through this modality contributes to increased budget allocation towards poverty reduction and improved development outcomes in a number of countries. Nonetheless, budget support has increasingly come under criticism in recent years, and many bilateral donors have either partly or fully stopped using this modality. Against this background, DEval conducted a comprehensive and systematic review of existing evidence on the effectiveness of budget support, based on a considerably larger number and greater variety of sources than previous synthetic work. To close important remaining knowledge gaps this evaluation synthesis draws together different perspectives on the impact of budget support from a total of 95 evaluations and studies. The findings substantiate existing knowledge on the effectiveness of budget support and at the same time generate new insights for decision makers in German and international development cooperation.