(How) does budget support build domestic accountability?

Mar 27, 2009

A few weeks ago, William Easterly published a characteristic attack on DFID’s  promotion of general budget support on his Aidwatch blog entitled  Why Does British Foreign Aid Prefer Poor Governments Over Poor People? He argues that DFID gives budget support to countries with poor indicators of democracy, human rights and corruption. If one of the goals of budget support is to build domestic accountability, he argues, then these indicators suggest that budget support is failing to build domestic accountability.

Ex DFID staffer Owen Barder, director of aidinfo  responded by challenging Easterly’s facts on Ethiopia, Vietnam and Malawi and arguing that  “the governments mentioned in this piece (Ethiopia, Vietnam and Malawi) all make demonstrably good use of the money they have received.”  (click here to read his full response).

While governments making good use of money is always a good thing, Barder essentially misses Easterly’s point that budget support has not been successful in improving domestic accountability in budget support countries.

So let us look at domestic accountability in Rwanda and Malawi more closely by using the 2008 Open Budget Index (Ethiopia was not included in the OBI). The Index shows that Rwanda provides ‘scant or no information’ to its citizens on the formulation or implementation of the government budget (click here for the Rwanda survey): No spending plans, No actual expenditure reports, No audit reports – Nothing.  Malawi does  a little better, but still provides only ‘minimal’ budget information to citizens (click here for the Malawi survey).

What about participation? In Rwanda the Executive doesn’t consult the Legislature or the public before tabling the budget. When it gets the Executive’s budget proposal, the Legislature doesn’t hold hearings to get citizens’ input either.  Again the picture in Malawi is similar.

It is very hard to see where accountability resides if government doesn’t provide budget information to citizens and makes little or no effort to involve them in budget decisions or implemention. So if Easterly’s argument is that budget support should not be considered where domestic accountability is not already at a high level, it is hard to disagree with him.

If Easterly’s argument is that budget support has not managed to build domestic accountability, he is also right. To go from this argument to arguing that efforts to create domestic accountability are ineffective and should be suspended in favor of donor conditionalities,  is however problematic. This  constitutes throwing the baby of domestic accountability out with the bathwater of aid modalities.

While aid can be a useful carrot, the debate should focus on how to create domestic accountability, not on how and where to apply donor funding.  In practice we know that domestic accountability institutions in poor countries are as weak as they ever were. Domestic accountability will not ’emerge’ where budget support is provided. It must be built by the very same donors that adhere to the budget support approach. Thank goodness DFID makes no small effort to do just this.

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