The period being evaluated (roughly 2005–2015, although seven of the eight evaluations concentrated on the period 2005–2010) was a period of high and increasing ODA levels, with budget support being the EU’s and multilateral development partners’ preferred aid modality. Overall, budget support provided a significant and predictable source of funding for recipient governments and created fiscal space for them to undertake discretionary expenditure. The scale of budget support in relation to public expenditure was significant in all countries. Budget support annual disbursements represented as much as 25% of public expenditure in Uganda in the first half of the period; 15% of public expenditure in Burkina Faso; more than 10% in Mali, Mozambique and Tanzania; 8% in Ghana; and 6.5% in Zambia. Even in Tunisia, where it represented only 1.4% of public expenditure, budget support was an important source of funding for discretionary expenditure.

The predictability of the amounts of budget support was high, with disbursements close to planned amounts in most cases. This was true even though a lack of mutual accountability triggered temporary suspensions of budget support by the EU and other development partners in five of the eight countries during the evaluation period. In three cases, temporary suspension was linked to the government’s breach of principles (major corruption and fraud cases had been brought to light in Tanzania in 2007 and 2008; Zambia in 2009; and Mozambique in 2009, 2011, and 2012). At the time, the EU’s general budget support was not yet linked to respect for fundamental values, but only to the eligibility criteria, which continued to be satisfied. While corrective measures were discussed and then implemented, the EU continued to disburse funds, which eased the effect of these suspensions on the government’s Treasury tensions. In the two other cases, Uganda (2012) and Ghana (2013 and 2014), underperformance on results, a deteriorating macroeconomic situation and serious concerns regarding PFM triggered all development partners, including the EU, to suspend budget support since the key conditions were no longer being met. 

With these temporary suspensions and deferred disbursements of budget support due to the countries’ breach of mutual accountability, the predictability of disbursement timing could not be maintained: in Mali, Uganda, and Zambia public expenditure was delayed and the government had to seek temporary domestic borrowing. 

In almost all EU budget support, capacity development complements funding, policy dialogue, and performance monitoring. Technical assistance is used to strengthen the country’s policy and PFM systems, to improve the accountability of the government toward its citizens, and to strengthen key institutions and policy-making processes. Typical areas of support include external oversight, monitoring and evaluation, underlying statistical data systems and processes, PFM, including gender budgeting and monitoring, and the active engagement of stakeholders in policy design, implementation and monitoring. 

Technical assistance usefully complemented budget support in backing governance reforms and reinforcing capacities in PFM, audit, and statistics in six of the eight countries. Where sector budget support was provided alongside general budget support, sector capacities (e.g., in health, water, and sanitation) also benefited from technical assistance. In Ghana, major efforts were made to strengthen the capacities of civil society organizations and to enhance their role in policy processes. Overall, technical assistance remained a minor component of the budget support package and in many instances, evaluators estimated that more could have been done with better planning and a more flexible response to strengthen capacities at the subnational level where policy implementation takes place.

In every result identified in all eight evaluations as a direct or indirect effect of budget support, policy dialogue featured as a central element. Dialogue related to budget support was invariably a crucial factor in improving policies, governance, and policy decision making. Through their policy dialogue, development partners were able to put and keep specific issues on the government’s priority agenda, draw attention to governance matters, and propose and discuss policy options. The development partners also used performance monitoring and the variable tranche indicators to discuss results of policy implementation, corrective measures, and implementation challenges.

The effectiveness of policy dialogue was helped by the strong coordination of budget support donors within a structured framework (Box 3.1). This facilitated harmonization, alignment, and the delivery of joint messages. During the period, temporary suspensions of budget support disbursements led to a severe deterioration of government–development partner relations in five countries. The overall positive assessment of budget support policy dialogue was tempered in several cases by a perceived lack of government ownership and leadership of the policy dialogue (this was not the case in Ghana) as well as by extending budget support areas of interest to ever wider governance and sector issues for which reform capacities were insufficient.

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  Basket funds typically pool funds from different development partners into a single time-framed fund, in an autonomous account, with its own management, accounting, monitoring and accountability mechanisms under an agreed set of operating procedures. Funds are most often earmarked for specific uses, prioritised by common agreement between the recipient government and the development partners. See the list of co-operation modalities (B04) in the CRS codes in https://www.oecd.org/development/financing-sustainable-development/development-finance-standards/dacandcrscodelists.htm.