Abstract for: Towards an optimal rate of general budget support in developing countries
Developing countries (recipients) and especially countries south of the Sahara have been heavily reliant on foreign (donor) aid for over half a century. Granted, conventional suppositions consider such dependence indispensable. Regardless, there is a widespread consensus among stakeholders that the effects of aid to recipients have not attained their desired results and Africa’s real per capita income today is lower than in the 1970’s leaving many African countries at least as poor as they were forty years ago. Aid fungibility, the phenomena under consideration is mundane; a known but daunting problem to eliminate. In this paper, we propose a first level perspective on the internal dynamics of recipients of these foreign aids. This working model analyzes Agriculture, Healthcare and Education as well as ICTs sectors; enough to fully represent and understand the phenomena under consideration. These selected sectors account for more than 75% of all donor aid to recipients. The goal of our hypothesis is to derive a first level model to be used as a base in developing further thorough model disaggregation of an overall outlook outlining socio-cultural dynamics and more importantly to establish an optimal budget rate proven to minimize fungibility.