Budget Support to Ghana: A Risk Worth Taking?
This briefing paper assesses the strategy of providing development assistance through “general budget support” (GBS), using as a case study the Multi-Donor Budget Support (MDBS) program instituted in Ghana by the Overseas Development Institute and CDD-Ghana. GBS, defined as the provision of financial aid by a donor agency directly to a country’s national treasury, aims to harmonize fiscal systems of donor-supported aid projects and governments’ regular budgets. The report concludes that MDBS has not reduced the risks associated with putting money into weak fiscal systems but has encouraged budget reform and increases in poverty-reduction expenditures. The report recommends that MDBS be re-conceived as a method of budget financing rather than a tool for policy leverage.