The Changing Dynamics Of Foreign Aid And Democracy In Mozambique.

Author:Stewart, James
 
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24 May 2012

Aid to Mozambique: a tradeoff between governance and democracy?

In a recent UNU-WIDER working paper 'The Changing Dynamics of Foreign Aid and Democracy in Mozambique' Carrie Manning and Monica Malbrough argue that the move towards providing aid in the form of budget support in Mozambique brought a greater coherence to the whole aid agenda and strengthened the capacity of state institutions and thus improved governance in general in Mozambique. However they posit that paradoxically this improvement in governance has come at the price of a weakening of the political processes and institutions that are required for effective democracy.

Budget support and aid for governance

The key change in Mozambique's relationship with its donors has been the shift away from project aid and towards direct budget support, which is now the most important source of aid money for Mozambique accounting for nearly half of the state budget. Donors expect budget support to increase government ownership of the development process, to create mechanisms of mutual accountability between donors and the government, to bring about greater harmonization, co-ordination and information sharing amongst donors, and to unite donors in the support of a common goal. In the case of Mozambique this goal is poverty alleviation. Mozambique's Poverty Reduction Strategy Paper (known by its Portuguese acronym PARPA) provides both the foundation for the government's five year poverty reduction plan and the framework around which budget support is structured.

The shift to budget supports has had two important effects on democracy aid in Mozambique. First it has influenced the kind of things donors are willing to support. In particular it has reinforced a focus of the government in developing the capacity of the state to plan and manage public expenditure, which is key in achieving the poverty reduction goals set out in the PARPA. Governance as defined in the PARPA covers two broad areas; public sector reform and 'justice, legality and public order'. Donors frustrated with a lack of transparency at the national level have recently begun to focus on public sector reform and capacity building at a local level. 'Justice, legality and public order' covers the fight against corruption and the strengthening of monitoring institutions such as the Audit Court.

Second, budget support has led to an increase in the coordination and monitoring and assessment of government performance...

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