Challenges in evaluating budget support and how to solve them

While there are well-tested methods for evaluating projects, it is much more difficult to evaluate budget support with the same rigour. This article outlines the challenges of evaluating budget support. In addition to applying a rigorous counterfactual for assessing impact, we argue that there are three other challenges, mainly caused by the ambiguities in the theory and practice of budget support. We then present a typology of different approaches for evaluating budget support based on two dichotomies: ‘qualitative versus quantitative’ and ‘country case study versus cross-country research’. Discussing the strengths and weaknesses of each, we show that an eclectic combination of the different methods can successfully solve the challenges.