The Future of Integrated Policy-Based Development Cooperation: Lessons from the Exit from General Budget Support in Malawi, Rwanda, Uganda and Zambia

Abstract

During the 2000s, budget support had been a preferred aid modality for implementing the principles of effective aid formulated in the 2005 Paris Declaration. While the literature attested to the positive effects of the modality, the 2010s have been marked by the withdrawal of many donors from the modality. The modality had increasingly come under criticism due to scandals in the recipient countries and accountability pressures at home. This evaluation used a theory-based approach comprised of comparative case studies in Malawi, Rwanda, Uganda and Zambia, which were complemented by an innovative process tracing approach. The results of the evaluation show that the exit from budget support increases fragmentation in aid portfolios and lowers harmonization and coordination among donors. The exit led to negative developments in most areas that had benefited from the introduction of budget support, for example in public expenditure for social sectors and macroeconomic performance. These findings are not only relevant for the launch of new policy-based modalities similar to budget support, but also provide lessons learned for the exit from integrated policy-based approaches. This evaluation is one in a row of three DEval budget support evaluations (Orth et al. (2017), What We Know about the Effectiveness of Budget Support; Krisch et al. (2015), Accompanying Measures to Budget Support in Sub-Saharan Africa).