BUDGET SUPPORT AND AID EFFECTIVENESS: EXPERIENCE IN EAST ASIA

Abstract

Today there are more than 60,000 aid projects underway in the developing world, often with different administrative procedures set up by the donors. 85 percent of these projects cost less than $1 million. This places a heavy burden on poor countries that lack the administrative capacity to handle these demands, and does not help them build their own systems. So when the project ends, the results are often not sustained. A conservative estimate for a typical African country is that this way of delivering aid translates into thousands of new reports and more than a thousand new annual missions to appraise, monitor and evaluate. Each mission asks to meet with key officials, and each will ask the government to comment on its reports. Strong evidence supports that these donor-driven approaches are one of the reasons development assistance has been under-performing. Such fragmentation may not apply to aid to East Asia, where attempts are being made to enhance aid effectiveness by linking assistance for individual projects, fostering ownership by partner countries, and not merely offering aid but collaborating in foreign direct investments and private funds.

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