Joint Evaluation of Partnership General Budget Support

1. Joint Evaluation of Partnership General Budget Support Ann Bartholomew, Mokoro

2. Presentation Outline 1. General Issues • Management of the Study • Purpose of the Evaluation • Definitions and Classification of GBS • Methodology 2. Preliminary Cross-Country Findings 3. Study Dissemination

3. Management of Study • Commissioned by a wide Steering Group of donors • Management Group: DFID, EC, Sida, Netherlands • Consortium: IDD+University of Birmingham, International Development Department, with partners (Mokoro, Ecorys, DRN, NCG, local consultants). • Country studies: Burkina Faso, Malawi, Mozambique, Nicaragua, Rwanda, Uganda, Vietnam. [Parallel study in Tanzania] • Outputs: Country reports and synthesis report

4. Purpose and Definition • Purpose of the Evaluation:to evaluate to what extent, and under what circumstances (in what country contexts), PGBS is relevant, efficient and effective for achieving sustainable impacts on poverty reduction and growth. • Definition: The general characteristics of budget support are that it is channelled directly to partner governments using their own allocation, procurement and accounting systems, and that it is not linked to specific project activities.

5. Classification of GBS

6. Methodology • Evaluation Questions: • The Relevance of Partnership GBS • The Effects of Partnership GBS on Harmonisation and Alignment • The Effects of Partnership GBS on Public Expenditures • The Effects of Partnership GBS on Planning and Budgeting Systems • The Effects of Partnership GBS on Policies and Policy Processes • The Effects of Partnership GBS on Macroeconomic Performance • The Effects of Partnership GBS on the Delivery of Public Services • The Effects of Partnership GBS on Poverty Reduction • The Sustainability of Partnership GBS and its Effects • Major Cross-Cutting Issues

7. Preliminary Cross-Country Findings The Length of Experience of PGBS Differs Considerably • In Malawi and Nicaragua and to a certain extent Vietnam there is more limited PGBS experience, whereas in Uganda, Mozambique and Burkina Faso the process has been longer established There are Wide Variations in the Design of PGBS • PGBS in Vietnam and Uganda are led by multilaterals and bilaterals in other countries (e.g. Mozambique) • PGBS can be complex with numerous parallel PGSB instruments (Uganda). In Vietnam there is one instrument (the PRSC) • All have evolved in nature over time and are specific to country contexts Differences in Partner Government Attitudes to PGSB • Some countries have sought to encourage donors to shift towards PGBS (Uganda, Rwanda), others express a preference but are careful not to discourage other forms of aid (Mozambique); for others (Vietnam, Nicaragua) PGBS is still a relatively recent initiative

8. A New Partnership Paradigm? • In Uganda, Mozambique, Burkina Faso and Vietnam there is evidence of a different relationship than under structural adjustment. In the first three countries there have been pivotal changes in aid management relationships that effected non-PGBS aid modalities • Political conditionality has not been appreciated by partner governments and has led to the delay/suspension of PGBS (Rwanda and Uganda) Predictability of Donor Funding • Predictability of PGBS is a problem in many of the study countries. Non-fulfilment of conditionality has caused tranches to be delayed but, it is still a more predictable form of funding than projects Harmonisation and Alignment • Evidence of alignment with government systems and indirect effects on other modalities • Policy alignment is dependent on credible national and sectoral strategies. In many cases PGBS and associated dialogue and review systems complement and enhance existing sector mechanisms, providing forums for addressing cross-sector issues n

9. Alignment with government budget cycles varied Ambiguous effects on transactions costs • The start-up costs of establishing GBS and engaging in dialogue can be quite high, but should fall over time. In some countries a proliferation of PGBS instruments constrains the lowering of transaction costs, but there is evidence of lower transaction costs for both government and donors in some countries Strong impacts on Public expenditures • These were reported in all countries except Malawi and Nicaragua where PGBS is very recent. These effects stem from bringing funds on budget and increasing discretionary budget financing. This increased public expenditure or reduced the budget deficit Strengthening of policies and policy processes • In Vietnam, Uganda and Mozambique PGBS had an influence on government policy and processes. Possibly as they all have strong government ownership of the reform processes. • Uganda was rated highly as it has a very transparent & systematic involvement of donors within policy, planning and budget processes

10. Weak evidence of PGBS contributing to macroeconomic performance • This was the case for all countries except Uganda and to a certain degree Mozambique. Possibly because satisfactory macroeconomic performance is often a pre-requisite for PGBS • Generally PGBS was found to aid fiscal discipline (as in Vietnam) although volatility of PGBS has had negative effects (Malawi, Rwanda). • Significant negative impacts of PGBS were not found on private investment or tax revenue in any country Evidence of PGBS supported expenditure on service delivery • Only in Malawi and Nicaragua weak effects of PGBS funds were found Difficulty of tracking distinct (separately identifiable) PGBS effects on poverty • This was the case in nearly all study countries • However, PGBS is unique in that it directly supports the national PRSs.

11. Sustainability of the PGBS is a crucial issue as poverty reduction and institution building are long-term processes • PGBS has been evolutionary in design in all cases and has shown the need to learn from experience and adapt accordingly • PGBS may be politically vulnerable as donors need to justify their involvement to home constituencies. • Moving towards sector or targeted budget support (Vietnam and Rwanda) may reflect this or the perception that PGBS can not fulfil poverty reduction objectives. Overall, except for Malawi and Nicaragua where PGBS effects are too recent to evaluate, assessments of country studies were all positive.

12. Dissemination of Study Findings • Country reports • Synthesis report • Dissemination conference • In-country dissemination workshop