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European Parliament hears arguments on budget support scrutiny
12 November 2008
Eurodad staff member Lucy Hayes made a presentation on budget support at the European Parliament’s Development Committee. The hearing, held at the parliament in Brussels on 5 November, was looking into the question of budget support, based on the concerns of some parliamentarians that this aid modality is hard to monitor. Eurodad said that budget support is one of the essential means for recipient countries to monitor their own public spending, and that European representatives can find several ways to determine the results of their funding.
Other speakers were Dr Stephan Klingebiel, who works at the Kigali office of German agency KfW, Klaus Rudischhauser, of the European Commission’s DG Development, and Alta Fölscher of Mokoro, a consultancy. Mokoro has done a study for the European Parliament on budget support. This is supposed to provide recommendations and guidelines of both a technical and political nature to ensure effective parliamentary oversight of aid provided as budget support. It was produced using case studies of parliamentary scrutiny in Canada, the UK, Netherlands, Sweden, and at the European Union level.
The Mokoro study correctly argues that budget support should be measured on results on the ground rather than from a purely fiduciary angle (as much previous aid has been assessed). Donor agencies such as the Department for International Development have budget support guidelines – including some basic risk assessments. But, the study found, they “report poorly on budget support”. The report indicates some emerging practices, including ex ante approval of every budget support (in Germany) and special audit reports.
Lucy Hayes, for Eurodad, agreed with several of these points, but commented that parliamentarians must not forget the 95% of aid that is not channelled through budget support. They must ensure better quality and better impact across all aid modalities. A recent Eurodad case study on Sierra Leone showed that only one third of aid to that country is spent via the national budget – the rest is invisible to planners, parliamentarians and the public. She also stressed that budget support is not a blank cheque for recipient governments, coming as it does with several pre-conditions and with outcome monitoring.
MEPs welcomed the report and the presentations. Some – including Glenys Kinnock – reacted with surprise that the Mokoro study had only examined how parliaments in Europe can scrutinise aid, not how elected representatives in Africa and elsewhere can do so. A future study is being considered which will look at this accountability from below, the very point of moving to provide more money as budget support.
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