Statistics in development cooperation - budget support

This article is part of a set of background articles providing an ‘outline of knowledge’ of international statistical cooperation between the European Union (EU) and developing countries, for non-statisticians needing to deal with statistics in development programmes and projects. The outline serves as an entry point and introduction to the much more detailed Eurostat publication 'Guide to statistics in European Commission development cooperation', downloadable in PDF format in English, French and Spanish (further down referred to as 'the Guide').

Many developing countries have weak statistical systems and mechanisms for measuring results. Good, reliable statistics are essential for measuring progress in reaching development goals and provide essential information about the effectiveness of policies and programmes. They help governments improve their policies and to be transparent and accountable about the delivery of development results. Reliable statistics are a key element towards better measurement, monitoring and management of the results of development assistance.

Budget support is an important instrument in EU's comprehensive development policy towards partner countries. Budget support relies on conditionality and policy dialogue, thus baseline information is needed to start the process. As budget support is focused on development results, information to measure the performance of budget support at general and at sector policy level is needed. The indicators should be drawn from the partner country's national or sector development policy and should contain a mix of process, output and outcome indicators. Budget support programmes typically have a capacity building component that can be mobilised to support the strengthening of statistical systems, either through project modality, technical assistance or pooled funding.

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What is the connection between EU budget support to third countries and statistics?

In 2011, following a broad consultation, the European Commission issued the Communication The future approach to EU budget support to third countries.

This Communication introduces budget support as:

Budget support involves policy dialogue, financial transfers to the national treasury account of the partner country, performance assessment and capacity-building, based on partnership and mutual accountability. It should not be seen as an end in itself, but as a means of delivering better aid and achieving sustainable development objectives by fostering partner countries ownership of development policies and reforms, as well as by implementing the aid effectiveness agenda and commitments set out in the Monterrey Consensus (2002), the European Consensus on Development (2005), the Paris Declaration on Aid Effectiveness (2005), and the Accra Agenda for Action (2008).”

Budget support relies on a framework for conditionality and on policy dialogue, thus there is a need for baseline information to start the process. Statistics are necessary to verify the extent to which variable budget support tranches can be disbursed. As budget support is focussed on development results, information is needed to be able to measure the performance of budget support both at general and at sector policy level. The related indicators should rely on quality statistics.

Quality statistics should be at the heart of the budget support methodology, for an informed baseline framework, to advocate for evidence-based decision-making with the partners and to efficiently measure the performance of budget support.

How to decide whether statistics are of sufficient quality to be used for budget support?

The capacity of the national statistical system (NSS)

The capacity of the NSS to produce quality statistics is a key issue of the budget support process. The outline of knowledge article dealing with data availability provides a checklist of the key issues when evaluating the NSS of a developing country. The articles about capacity building and data quality are also useful.

The strengths and weaknesses of the NSS should be assessed according to international standards, in order to identify which data are reliable and which sectors of the NSS that need support.

Several international initiatives provide information to assess the capacity of the NSS

How to integrate statistics in the budget support process?

Supporting statistics in the frame of institutional strengthening activities in budget support

EuropeAid’s Evaluation of the Commission support for statistics in third countries (2007) recommends pursuing the “efforts to accompany budget support with institutional building in the area of statistical information provision, with a view to strengthening the statistical system as a whole”. Typically, a share of 3 to 5 % of the support is dedicated to institutional strengthening. This share is available for technical assistance to improve the beneficiary’s capacity to use its budget to implement its poverty reduction policy. It could be mobilised to support the country’s statistical development.

Advocacy for an evidence-based decision-making

The same 2007 Evaluation reminds that using this share to support statistics is based on a demand from the partner. Thus, it is essential to efficiently advocate for evidence-based decision-making in the dialogue with the partners. The advocacy article of this outline of knowledge and the Guide provide you with key messages to build an advocacy strategy.

Advocacy for statistics in the dialogue with the partner can help raising awareness of the importance of evidence-based decision-making and stimulate the demand for official statistics.

Coherence with the National Strategy for the Development of Statistics

The capacity building support to the national statistical system should be brought in the frame of the National Strategy for the Development of Statistics (NSDS), if one exists. The NSS should be considered as a whole: capacity building support to the NSS should be based on the stated needs of the country’s official statistics users, not only on the information needed for budget support.

If a need for support to strengthen weak areas of the NSS is identified, this support should be provided respecting national priorities for the development of statistics.

Indicators for sector policies covered by the budget support

The process to assess the strengths and weaknesses of the NSS as a whole and the related information is not the same as the process to collect information for disbursement indicators of the variable tranches of the budget support:

  • the first process aims at identifying the NSS’s needs and possibly preparing capacity building actions in the frame of a national strategy for the development of statistics;
  • the second process usually corresponds to a subset of indicators related to sector policies and aims at measuring the performance of a particular supported sector. Part D of the Guide provides information about statistics by policy areas and presents the stakes and support means by sector.

Guide examples and practical information

  • Box 3.1: Typology of indicators
  • Box 3.2: Typology of indicators by the use made of them
  • Box 8.1: Terms of reference checklist for a statistics identification or pre-feasibility study
  • C.5.1 The importance of National Statistical Systems
  • C.5.2 Assessing the capacity of the National Statistical System
  • C.5.3 The concept of quality in statistics
  • C.7.4.2 Support to the whole statistical system at national level
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