Skip to content

Forum for the Future of Aid

Southern Voices for Change in the International Aid System Project

The Forum on the Future of Aid is an online community dedicated to research and opinions about how the international aid system currently works and where it should go next

organised by ODI

Budget support to Ghana: A risk worth taking?

Source: ODI

The Briefing paper argues that the Ghana's Multidonor budget Support has done enough to justify itself but is flawed.It has not achieved a sufficient critical mass and it has strayed too far from its initial objective of reducing transactions costs. These flaws have prevented it from minimising the risks of injecting budget support into a still weak fiscal system. While it is seen as having kept reform on the agenda and as having a generally pro-poor influence, it has neither been able to minimise the risks by galvanising more effective PFM systems nor to maximise the payoff in terms of poverty-reduction.
Remedial action is therefore recommended, along the following lines:
• The MDBS programme needs to be re-conceived primarily as a method of budget financing, not as a tool for policy leverage.
• Annual disbursements should not be conditional but instead be dependent upon the maintenance of ‘due processes’ in public spending (see Box 2).
• Reforms should be promoted by open dialogue with both domestic and external stakeholders.
• The PAF needs to be re-designed as a mechanism for enhancing internal, rather than external, accountability, by making reform targets and results public, and by giving wider access to policy debates.
• The original objective of minimising transaction costs needs to be brought back to centre-stage.
Parallel steps by the Ghanaian Government are also needed. It should:
• Develop a statement of aid policy setting out Government preferences for different forms of assistance and the future development of MDBS
vis à vis other modalities.
• Take actions to strengthen the public finances and raise the credibility of the budget, to reduce dangers of misuse of budgetary aid.
• Strengthen its capacity to put assistance to good use. This would require difficult decisions about the desirable size and remuneration of the public service.

Log In or Join

Resource Categories

Size of tags indicates the number of resources
Absorption Accountability Africa Aid Architecture Aid Architecture Aid effectiveness Aid linkages Aid modalities Aid organisations All regions Asia Pacific Bilateral Donors Budget Support By Region Capacity Development Conditionality Corruption CSOs Debt Relief Domestic Resource Mobilisation Donor Coordination Mechanisms Economic Growth Education Effects of aid Emergencies Environment Europe Food Aid Gender Good Humanitarian Donorship Governance Harmonisation & Alignment Health Hot Topics Humanitarian Aid Quality Institutions Latest trends Latin America and Caribbean Macro impacts/Dutch Disease MDGs Middle East Multilateral and International (governmental) Organisations National Policy Frameworks/PRSs Natural Disasters NGOs Ownership Productive Sectors Public Expenditure Management/Budget Sector Programme based approaches Technical Assistance Trade Vertical Programmes/Global Initiatives Workshops

Recent Forum Posts

  • The Paris Declaration is Gender Blind
  • The urgent need for transparency and accountability
  • Your Support is needed in Egypt
  • Independent People's Tribunal on the World Bank Group
  • South and the future of the world

Suggest a Resource

If you would like to suggest a resource for the Forum on the Future of Aid, please email