Should donors who are interested in the effectiveness of developmental programs rely on conditional budget support or on project aid? To answer this question, we present a model in which only a subset of the developmental expenditures can be subject to conditionality. We show that budget support is preferable to project aid when donors and recipients' preferences are aligned, and when assistance is small relative to recipients' resources. Then, we test our model estimating a modified growth model for a panel of developing countries, and find evidence in support of our predictions.

A basic reference document for persons interested in the federal budget-making process. Emphasizes budget terms in addition to relevant economic and accounting terms to help the user appreciate the dynamics of the budget process. Also distinguishes between any differences in budgetary and non-budgetary meanings of terms. Over 300 terms defined. Index. Appendices: overview of the federal budget process, budget functional classification, and more.

Because of its potential impact, and, in some cases, the harm it has brought, foreign aid is under the microscope. Donor countries, who don't want simply to give money away; recipient nations, who need to make the most of what they have and get; and analysts, policymakers, and writers are all scrutinizing how much is spent and where it goes. Perhaps more important, aid is only a small part of what developing country governments spend. Their own resources finance 80 percent or more of health and education spending except in the most aid-dependent countries. Lives in the Balance investigates a vital aspect of this landscape—how best to ensure that public spending, including aid money, gets to the right destination. The development of democratic institutions and the spread of cheap communications technology in developing countries make it possible for the "demand-side"—citizens and civil society institutions—to advocate for improved transparency, stronger accountability, better priorities, reduced corruption, and more emphasis on helping the poor. Securing real reform will depend not only on knowledge of how the recipient government operates, but also how to work with partner entities—the media, the private sector, other organizations, and legislators—to raise awareness and compel change.

Policymakers and program managers are continually seeking ways to improve accountability in achieving an entity's mission. A key factor in improving accountability in achieving an entity's mission is to implement an effective internal control system. An effective internal control system helps an entity adapt to shifting environments, evolving demands, changing risks, and new priorities. As programs change and entities strive to improve operational processes and implement new technology, management continually evaluates its internal control system so that it is effective and updated when necessary. Section 3512 (c) and (d) of Title 31 of the United States Code (commonly known as the Federal Managers' Financial Integrity Act (FMFIA)) requires the Comptroller General to issue standards for internal control in the federal government.

Should donors interested in the effectiveness of developmental programs rely on conditional budget support or on project aid? To answer this question, we present a model in which only a subset of developmental expenditures can be subject to conditionality. We show that budget support is preferable to project aid when the preferences of donors and recipients are aligned, and when assistance is small relative to the recipient's own resources. Furthermore, when donors cannot observe the recipient's type, they may impose higher levels of conditionality to separate committed governments from uncommitted ones.