Sector budget support (SBS) is an aid modality which donor agencies are increasingly using to support African countries to achieve their policy objectives. The purpose of the study is to draw on the experience of SBS in different countries and sectors to guide future improvements in policy and practice by partner countries and donors. It represents the first major comparative and systematic assessment of Sector Budget Support. The Study was commissioned by the Strategic Partnership with Africa and carried out in partnership with Mokoro and local researchers.
Through reviewing the existing literature and specific cases of the provision of SBS, this study identifies the variety of different forms in which SBS is provided, and analyses the effects of SBS on sectoral systems and service delivery. In doing so, it examines the provision of SBS from the perspective of donor agencies and recipient governments, and the incentives they face.
The research demonstrates that sector budget support has made an important contribution to opening up access to basic public services and improving the efficiency of public expenditure. However, like general budget support and all other forms of aid, sector budget support is struggling to have an impact on the quality and equity of service provision, which is necessary if the improved access is to be of significant benefit. This is not the fault of sector budget support as an aid modality, but the way in which it is delivered alongside other aid.
The research has important implications for donor and recipient aid policies, and provides a solid basis for the provision of guidance on the role of SBS as an aid modality. The study’s Good Practice Note sets out how, by putting service delivery at the heart of its design and implementation, SBS can be instrumental in improving aid effectiveness at the sector level.