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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

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The Lenpa Forum Case Study - Multi Donor Budget Support and Capacity Development: Emerging Lessons from Ghana

Source: DFID

This report argues that there appears to be a virtuous and mutually reinforcing relationship between improving capacity for macroeconomic and public financial management, the GPRS (Ghana Poverty Reduction Strategy), HIPC (Highly Indebted Poor Countries), the IMF PRGF (Poverty Reduction Growth Facility) and the MDBS (Multi Donor Budget Support) programme. It is difficult, and possibly unnecessary, to identify attribution to each of these developments. During the past three years these processes have combined to deliver higher rates of growth, lower domestic borrowing, lower interest rates, and increased spending on poverty related expenditures.

MDBS has supported capacity development by providing additional budget resources to fund such investments, and by using dialogue and monitoring to concentrate attention on crosscutting reforms to tackle bottlenecks. This approach has been more successful in some areas than others, with PFM (Public Financial Management) providing a notable success. While the relationship between MDBS capacity development and complementary TA (Technical Assistance) support is complex, emerging experience indicates that small-scale and co-ordinated TA can provide technical direction when senior officials drive the reforms and MDBS provides the incentives, resources and focus.

Click here to read the full report

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