Allowing governments in poor countries to decide for themselves how to spend aid money has led to more schools and hospital for the poor, Hilary Benn, the UKs International Development Secretary said Monday.
Announcing the findings of an international study into whether donors such as Britain should back specific projects or provide budget support for developing countries, Benn said he was encouraged by signs of increased resources being deployed in the fight against poverty.
A report on seven countries – Burkina Faso, Malawi, Mozambique, Rwanda, Uganda, Nicaragua and Vietnam – found that handing aid money to the treasuries in poor countries made the flow of overseas assistance more predictable and helped governments plan long-term anti-poverty strategies.
The study, conducted by the international development department at Birmingham University, was requested by the wests leading think tank, the Organization for Economic Cooperation and Development (OECD).
With donor governments now channeling 5billion US dollar (30 milliarder DKR) a year – about 5 percent of their total aid – directly to the budgets of developing countries, the OECD said it was important to evaluate whether the money was being well spent.
Benn said Britain provided 25 percent of its aid directly to governments and, in addition to boosting health and education spending, there had been better management of public finances, greater transparency and more effective coordination between donors.
He added, however, that direct budget support was not a panacea. The report showed that in five of the seven countries studied there had been benefits from the new system but that it was important for donors to make a full assessment of political risks before channeling funds straight to governments.
Countries such as the US and Japan tend to be less keen on providing direct budget support, fearing that money will be squandered unless there is accountability to donors.
Benn said the new approach had yet to make a significant difference to the democratic accountability of recipient governments to their citizens but it was important to be realistic about what direct budget support could and could not deliver.
Kilde: www.worldbank.org
