Download or read book Budget Support Versus Project Aid written by Mr.Tito Cordella and published by International Monetary Fund. This book was released on 2003-04-01 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.