Evaluations of Balance of Payments Support:

Summaries The author argues that macroeconomic evaluations of the impact of aid still lack an established methodology. It is mentioned that when assessing the impact of economic reform programmes, the authors of the various evaluations have encountered a series of problems such as the time span which has often been too short. Very few evaluations address the issue of the extent of ‘ownership’ of the respective adjustment programmes and the degree of domestic political credibility. Potential critical areas that might be addressed in evaluations could include the following items: incentive problems related to the high marginal tax on good performance implicit in the ‘financing gap’ approach; the danger of a soft budget constraint being introduced by benevolent donors; the danger of programme aid being used to bail out bad performers year after year; and the multiple roles played by the IFI as preferred creditors, major macroeconomic advisers and coordinators of part of the bilateral aid.