19 Apr 2011

General budget support a double-edged sword says professor

6:53 pm on 19 April 2011

A Victoria University Professor of Development Studies says government-to-government aid funding works for and against the recipient.

The comment follows the announcement by the Cook Islands government that it's about to undergo a European Union-sponsored assessment of the strength of its financial system with a view to moving to general budget support.

Professor John Overton says although that system reflects a high level of trust in the donor-recipient relationship, it's a double-edged sword.

"it is something that you would say increases the autonomy of the recipient government in that they have a programme that has been agreed to by the donors so there's a general strategy in place for how they're going to spend their money. On the other hand the sort of conditionalities that go with it in terms of continued monitoring and audit do mean that their hands are tied a bit, certainly."

Victoria University's Professor John Overton.