Sector budget support: Objectives, funding, arrangements and conditions for disbursement. Analysis of a non-traditional sector

Although project aid still represents the bulk of total official development assistance of the European Commission, budget support commitments have increased substantially in recent years. This aid modality involves a continuous dialogue with beneficiary countries, in relation to macro-economic policy, poverty reduction, public management and sector policy reform. Sector budget support (SBS) operations have traditionally been concentrated in the education, health, water and sanitation, transport and environment sectors. More recently, SBS has also been approved for non-traditional sectors like food and nutrition security, regional integration, social cohesion and trade. This brief paper analyses three recent sector budget support operations funded by the European Commission in the food and nutrition security sector in lower middle-income countries in Latin America. Two of the operations (Peru and Guatemala) were funded through the main EU geographic development cooperation financial instrument, while the Bolivia operation was funded under the EU food facility.

Vagn Mikkelsen - April 2011