AEGIS ECAS 2007 - View abstract

Panel	81. Contradictions along the path to development: International co-operation, elites and entrepreneurs
Paper ID	334
Author(s)	Whitehead, Richard L.
Paper	No paper submitted
Abstract	Since the 2005 Paris Forum on Aid Effectiveness, international financial institutions and foreign ministries have been applying more emphasis on General Budget Support (GBS) to finance inadequate fiscal budgets in developing countries, as opposed to sector and sub-sector aid in support for specific development projects. This is especially true in cases where recipient countries have a demonstrated commitment to good governance. GBS is a clear improvement over the high social costs and inflexibilities associated with previous structural adjustment policies. When compared to project assistance, GBS achieves greater administrative convenience and enhanced coherence in development policy. However, recent work by Goran Hyden points out that budget support risks strengthening the institutional position of status quo interests in recipient countries. This effect is due to the interaction between specific policy aspects of GBS and local power structures. First, whereas project aid normally involves multiple local and international civil society actors and NGOs, budget support diverts aid directly to the state budget, which is then allocated in accordance with programs described under the recipient county’s Poverty Reduction Strategy. Secondly, the finances associated with GBS are generally more “fungible” than sector and sub-sector aid, giving state leaders more flexibility in budget usage. For Hyden, fungible budget support carries with it a greater risk of entrenching existing clientele networks which reproduce status quo representation. Additionally, increased budget support may further reinforce an asymmetry of resources between state and societal organizations expected to act as a counterweight to the state and incumbent. Without appropriate safeguards based on an understanding of local power structures, GBS risks mapping onto local power relations in ways that threaten some of the key goals in development assistance, including civil society capacity-building, good governance, and accountability. In light of this emerging emphasis on GBS, I propose to re-open some old questions about the relationships between the political elites in Africa, who enjoy a monopoly on access to state resources, and the societies in which these elites are supposed to govern and improve. In this paper, attention will first be paid to describing the motivations and interests behind the shifting emphasis from project support toward an emphasis on GBS. Secondly, I will theorize about the relationship between access to state resources and regime tenure, paying special attention to clientele networks which ‘harmonize’ the interests of political elites with the interests of a variety of other social actors. What are some of the possible relationships between access to state resources and regime tenure? How are these relationships a threat to stated goals defined in Poverty Reduction Strategies? In order to supplement theory, I will give a cursory overview of several African cases where GBS has been enhanced. Is there visible evidence suggesting that GBS is positively related to regime entrenchment? Finally, I will briefly discuss some of the measures taken by international donors for preventing incumbent abuse of general budget aid, such as public expenditure reviews and public service reforms.

General Budget Support in Development Aid: Who does it Empower?