Volker Hauck, Oliver Hasse and Martin Koppensteiner. 2005. EC budget support: thumbs up or down? (ECDPM Discussion Paper 63). Maastricht: ECDPM.
Budget support is a form of macro-economic financial assistance that is designed to prioritise the fight against poverty and the achievement of the Millennium Development Goals (MDGs). The European Commission (EC) is providing more and more budget support under the Cotonou Partnership Agreement (CPA), which structures the provision of assistance by the European Union (EU) to the African, Caribbean and Pacific (ACP) countries. The EC also provides macro-economic support through its cooperation agreements with a number of non-ACP countries, for which it is now also introducing budget support.
During the course of its work in the ACP regions, the European Centre for Development Policy Management (ECDPM) was approached by parliamentarians, representatives of non-governmental organisations and partner government officials, all of whom had certain questions to ask about the background to and operation of budget support.
These actors regard budget support as an increasingly important mechanism for development cooperation, and one that has potentially far-reaching implications for their work. At the same time, it is a relatively new mechanism, is poorly understood and is driven by a relatively small group of experts in aid agencies and partner country finance or planning ministries.