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Keywords:

  • budget transparency;
  • foreign aid;
  • aid-dependent countries;
  • Open Budget Index;
  • donor engagement;
  • governance

SUMMARY

Budget transparency has come to be considered a key aspect of governance. Over the past decade, donors have invested increasing resources in strengthening processes through which budget transparency in developing countries can be enhanced. According to the 2008 Open Budget Index (OBI) Report, however, aid dependency and budget transparency appear to be inversely correlated. This article looks at the role of donor agencies in promoting or preventing budget transparency in aid-dependent countries. It looks at significant correlations across the whole sample of 84 countries covered in the 2008 OBI, and analyzes more specific data for a sub-sample of 16 aid-dependent countries, before selecting six countries for which more detailed findings are then presented. All of these countries have implemented reforms aimed at enhancing budget transparency, with substantial donor support. These, however, often had only limited success, partly because they were not well adapted to the local context, and partly because donors put limited emphasis on improving public access to budget information. Donor efforts were also often offset by other characteristics of donor interventions, namely their fragmentation, lack of transparency, and limited use of programme aid modalities such as budget support and pooled sector funding. Copyright © 2012 John Wiley & Sons, Ltd.