Can GBS be a preferable aid modality under SDGs?

Abstract

PurposeThe purpose of this paper is to verify whether general budget support is a favorable aid modality under SDGs in developing countries.Design/methodology/approachThe authors use panel data on government revenue, expenditure, and social indicators for the ten-year period from 1997 to 2006 to reflect the result for sustainable development goals (SDGs). The authors focus on the health sector as a representative social sector.FindingsThe results show that GBS in fact increases the budget allocation for the health sector more than tax revenue does. However, the effect of government health expenditure on health indicators is not necessarily improved by the introduction of GBS, which indicates that the introduction of GBS alone has limited impact.Social implicationsThe paper suggests that the complementarity between GBS and projects/programs focusing on human and institutional capacity development should be seriously considered. These results shall be considered even under SDGs.Originality/valueThis paper attempts to assess the effect of GBS in developing countries by using panel data on government revenue, expenditure, and social indicators for the ten-year period from 1997 to 2006 to reflect the result for SDGs.