Budget Support Versus Project Aid
Electronic Access:
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Summary:
Should donors who are interested in the effectiveness of developmental programs rely on conditional budget support or on project aid? To answer this question, we present a model in which only a subset of the developmental expenditures can be subject to conditionality. We show that budget support is preferable to project aid when donors and recipients' preferences are aligned, and when assistance is small relative to recipients' resources. Then, we test our model estimating a modified growth model for a panel of developing countries, and find evidence in support of our predictions.
Series:
Working Paper No. 2003/088
Subject:
Budget planning and preparation Capital spending Expenditure Financial institutions Foreign aid Poverty Poverty reduction Project loans Public financial management (PFM)
English
Publication Date:
April 1, 2003
ISBN/ISSN:
9781451851182/1018-5941
Stock No:
WPIEA0882003
Pages:
32
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