Tackling rural poverty, together

Jim Harvey

Head of Profession, Livelihoods and Environment Groups, Department for International Development (DFID), London

“Tremendous public interest in development” puts donors in spotlight

Nater: What’s your assessment of direct budget support?

Harvey: I once worked for a Sudanese project director — one of the most effective and dedicated professionals I’ve known — who said “We know what needs to be done but we don’t have the resources to do it. Why can’t the donors trust us more, interfere less and let us get on with the job?” So my starting point on budget support is remembering that director’s words.

The OECD estimates that OECD donor-countries now channel about US$ 5 billion — about 5% of their aid — directly to the budgets of developing country governments. Donors, partner-countries, NGOs and civil society groups are all involved in the analysis and debate. The record so far shows up benefits and also important areas where policy and practice can be improved. Some serious studies have been done already. Birmingham University worked with 24 donors and seven partner countries to produce the Evaluation of General Budget Support report, released in May this year.

The consensus seems to be that budget support isn’t a panacea, but it can work in widely-differing country contexts, and it can help strengthen public financial management, transparency and good governance. Budget support also seems to strengthen services like health and education.

It seems that when a developing country’s government has the political will to reduce poverty, budget support can be an effective way for donors to deliver aid. But there’s less evidence so far showing an impact on economic growth or on actual income levels for poor people. I think there’s general agreement that donors should continue to pursue a mix of mechanisms to deliver aid. There needs to be more analysis of political risks, and this should be shared amongst donors.

Whose job is it to improve government accountability and institutions?
If you mean accountability to developing country citizens, it’s less and less the job of donors. Governments themselves must strengthen accountability although donors and international efforts such as the High Level Commission on Legal Empowerment of the Poor can help.

But donors need to become more accountable, too — it’s a Paris principle. And at home our parliaments and publics are looking for greater accountability, as well. In the UK a Bill has just been passed by Parliament that will increase transparency on the way that aid is provided, reported on and used — it’s also seeking to promote coherence in government policies on development. We should welcome this. The ‘Make Poverty History’ campaign last year showed that there’s a tremendous public interest in development — we’re all much more in the spotlight now.