Public Sector Governance and Accountability Series: Budgeting and ...

Strengthening Public Expenditure Management in Africa 429
and (c) demand that a genuine transfer of knowledge be at the core of the
consultant’s work. That being said, the foremost priority in external assistance
to budget reform is to insist on, and to support, stronger public financial
accountability, including through opening the door to user feedback and
some appropriate form of civil society participation in budget preparation
and a reality check in budget execution.
As public financial management systems improve, donors will more and
more be able to move from project aid to budget support. The issue is usually
presented as a binary choice: either assistance is strictly tied to a specific,
narrowly defined project or general budget support is provided in exchange
for appropriate policy understandings. However, the fungibility of money is
conceptually and practically a continuum—ranging from the extreme of
earmarking funds for individual items of expenditure to the other extreme
of unconditional (and convertible) transfers. This perspective suggests a
scenario of progressive increases in fungibility of assistance, including
untied financing of selected groupings of activities smaller than the overall
expenditure program. For example, short of financing the budget as a whole,
donors could readily support “basket” financing for, say, malaria eradication
or child immunization or rural road maintenance. (A current example is the
untied assistance provided by some donors for Tanzania’s Public Financial
Management Reform Program.)
Once again, the operational issue is not whether general budget support
is more likely to be effective than narrow project aid. It is, or it is not,
depending on circumstances. The operational issue is how to improve the
circumstances to permit a move to budget support—at either the sector or
the general level, or both. Given the vested interests in project aid from both
donor agency and recipient sides, and the economic, institutional, and political
obstacles to moving away from project aid, strengthening of budgetary
management, reductions of fiduciary risk, and improvements in service
delivery acquire even greater importance.
A Concluding Word
The various pragmatic lessons of international experience in budget reform
have often been referred to, with particular reference to the experience of
developing countries. One general lesson, the world over, is that long-term
sustainability of institutional reform always demands local ownership,
political buy-in, and a degree of comfort among those responsible for
implementing the reform.Without the active cooperation of budget managers
and key staff members in both the core ministries and the line ministries,