I refer to Graham Hands' letter on aid disbursement (NCE last week). While he is correct that the trend is to disburse more aid by budget support, I think it is incorrect to attribute this to a lack of management capacity in the Department for International Development (DFID).
Budget support is now the preferred strategy of many aid organisations. To quote from a recent EU discussion paper: 'budget support replaces costly, project-based and highly fragmented aid practices with more efficient and rapidly disbursable resource flows.
The idea is that partner countries should assume ownership of resources, engage in meaningful public sector and finance reforms, improve governance by creating better accountability mechanisms, and hence help to reduce poverty in the long term.' DFID emphasises the need for caution and flexibility in introducing the approach, but is clear that this is ultimately the preferred modality.
This is not to say that many of the problems raised by Mr Hands are not real. A lot of us who are active in development are very sceptical of how this will play out, particularly in the countries with a poor governance record. But it is important to realise that we are dealing with a policy decision designed to improve aid effectiveness, not a copout reflecting lack of agency capacity.
I would argue that ownership and capacity building are more important than nice new tarmac, even if it has been designed by British consultants and built by British contractors.
Dave Stiedl, Engineering for Development, Hotel Yeedzin, Bhutan, dstiedl@yahoo. co. uk