{
  "title": "Budget Support Versus Project Aid",
  "publication": "IMF Working Papers, April 1, 2003",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/budget-support-versus-project-aid-16445",
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  "summary": "Should donors who are interested in the effectiveness of developmental programs rely on conditional budget support or on project aid? To answer this question, we present a model in which only a subset of the developmental expenditures can be subject to conditionality.",
  "sections": [
    {
      "heading": "Research question and approach",
      "content": "- Research question: Should donors who are interested in the effectiveness of developmental programs rely on conditional budget support or on project aid?\n- Analytical approach:\n  - Present a model in which only a subset of the developmental expenditures can be subject to conditionality.\n  - Test the model by estimating a modified growth model for a panel of developing countries."
    },
    {
      "heading": "Theoretical findings",
      "content": "- Budget support is preferable to project aid when:\n  - donors and recipients' preferences are aligned, and\n  - assistance is small relative to recipients' resources."
    },
    {
      "heading": "Empirical findings",
      "content": "- Empirical estimation of a modified growth model for a panel of developing countries finds evidence supporting the model’s predictions (i.e., the conditions under which budget support is preferable)."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subjects: Budget planning and preparation; Capital spending; Expenditure; Financial institutions; Foreign aid; Poverty; Poverty reduction; Project loans; Public financial management (PFM)\n- Keywords: aid policy; asymmetric information; Budget planning and preparation; budget support; Capital spending; conditionality; East Asia; empirical growth models; first derivative; policy Index; Poverty reduction; project aid; Project loans; recipient government; Sub-Saharan Africa; WP\n\n---\n\n Content in this bundle\n\n- Budget Support Versus Project Aid - WP/03/88\n  - Budget Support Versus Project Aid - WP/03/88 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Budget Support Versus Project Aid - WP/03/88 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/budget-support-versus-project-aid-16445"
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    "Authors: Tito Cordella, Giovanni Dell'Ariccia",
    "Published: April 1, 2003",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451851182.001",
    "Research question: Should donors who are interested in the effectiveness of developmental programs rely on conditional budget support or on project aid?",
    "Analytical approach:",
    "Budget support is preferable to project aid when:",
    "Empirical estimation of a modified growth model for a panel of developing countries finds evidence supporting the model’s predictions (i.e., the conditions under which budget support is preferable).",
    "Subjects: Budget planning and preparation; Capital spending; Expenditure; Financial institutions; Foreign aid; Poverty; Poverty reduction; Project loans; Public financial management (PFM)",
    "Keywords: aid policy; asymmetric information; Budget planning and preparation; budget support; Capital spending; conditionality; East Asia; empirical growth models; first derivative; policy Index; Poverty reduction; project aid; Project loans; recipient government; Sub-Saharan Africa; WP",
    "**Budget Support Versus Project Aid - WP/03/88**"
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