Linking budget analysis with aid advocacy

Abstract

Citizens have for many years demanded the right to scrutinise public budgets and play a part in how public money is allocated. In developing countries that are aid dependent there is an extra dimension to this budget work – decisions made by international financial institutions and bilateral donors. These decisions are crucial for government spending, and this briefing sets out some current aid planning issues which are relevant for civil society organisations that monitor government budgets in aid dependent countries. 1 A recent Afrodad study found that: “Mozambique still suffers from distortions in domestic accountability due to heavy reliance on external assistance, the fragmentation of instruments used by donors, and the extent of donor involvement in central policy processes, including the poverty reduction strategy and the budget”.2 Foreign aid makes up a significant percentage of government income for low income countries, in some cases half of the budget. Aid is likely to rise as a proportion of the budget if richer countries fulfil their commitments to increase their foreign assistance towards reaching the Millennium Development Goals (MDGs). At the same time as the expected rise in aid volumes governments have pledged a series of important changes in how aid is delivered, notably a trend towards donors providing money as direct budget support. This briefing describes how budget tracking organisations can understand these trends and build aid decision-making into their strategies.