Retooling Development Aid in the 21st Century- The Importance of Budget Support (INTPA Infopoint)

We have 7 years left to meet the Sustainable Development Goals and the international community has to make the most of the remaining time to achieve much-needed progress, despite adverse conditions on the rise since 2020.

Against this backdrop, the recently published book « Retooling Development Aid in the 21st Century: The Importance of Budget Support » is a timely contribution to revive the conversation on development effectiveness. It highlights the critical part that budget support can play to address both essential global public goods and tackle country-specific development challenges.

The publication revisits the principles of ownership, predictability, policy dialogue and incentives for reforms and results. It looks at prospects of budget support to address further fragility, enhance resilience to climate change and play a catalytic role for private investments in the current global financial architecture.

Although the book focuses on World Bank’s experience with budget support, lessons can be drawn for EU budget support. The EU is amongst the top providers of grant budget support, which has accounted for 15 to 20% of EU external assistance over the last two decades with a peak to 24% in 2020 in response to the COVID-19 pandemic. Budget support has been pivotal in the EU toolbox and demonstrated its effectiveness in various contexts. It has proved agile enough to adapt to crises, and lately to help Ukraine and neighbouring countries to cope with the Russian war of aggression.