Budget support in the EC's development cooperation

Abstract

The present study on the European Commission's provision of budget support is based on a report prepared for the German Federal Ministry for Economic Cooperation and Development (BMZ) and submitted to the ministry in January 2005.A comprehensive analysis of the EC's budget support had become necessary because, among other things, the way in which the instrument is handled had come in for criticism from various quarters in Germany.The present study works out the central elements of the EC's budget support concept, examining it in terms of the objectives envisaged for and the risks entailed by budget support.The study furthermore looks into whether and to what extent the concept is in fact being implemented in the EC's budget-support programs.The study's aim is to assess the EC's performance as a donor in the provision of budget support.In preparing the study, the author evaluated 30 financing proposals for budget support as well as a comprehensive body of other documents and conducted numerous interviews, with, among others, partners at the Directorate General for Development (DG DEV) and the EuropeAid Cooperation Office (AIDCO), the German Federal Ministry for Economic Cooperation and Development (BMZ), the GTZ, the KfW, and the GFA.The author also took two field trips to Ethiopia and Mozambique in order to analyze some of the initial experiences gained in program implementation.She would like to take the present opportunity to extend her heartfelt thanks to her many interview partners as well as to the representatives of the European delegations in the two countries named; without their active cooperation this study would not have been possible.In essence, the following text reflects the state of the information available in January 2005.In a small number of cases the text has been updated or altered to render it more precise.

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