Structural Adjustment Lending (19802000)
 HIPC – Poverty Reduction Strategies
(from 2000)
 Poverty Reduction Support Operations
 Development Policy Operations

Support implementation of government’s
policy and institutional reform program
 Can support cross-cutting reforms or sectoral
reforms
 Provide funding for the budget based on the
completion of agreed policy and institutional
reforms
 Not linked to any specific expenditures
 Can be stand-alone or a programmatic series
of development policy operations
 Deferred Draw Down Options

Strong dialogue on macro-economic and
budgetary policies
 Government policy focus on poverty
reduction and shared prosperity
 Appropriate macro-economic policy
framework
 Adequate public expenditure framework
and public financial management systems, to
ensure that funds contribute to
implementation of government’s
development strategy


Provides unearmarked funding for the budget and thus fully
aligned with budgetary priorities and use of country systems

Predictable source of budgetary funding, to complement
government’s domestic revenue

Helps prioritize reforms and mobilize technical assistance
around agreed reform priorities

Helps Ministry of Finance to drive and coordinate reform
agenda within government with agreed actions and timelines

Supports coordination of policy dialogue between government
and donor community

Can deliver fast response to external shocks
Supporting reform vs. buying reform
 Focus on government priorities vs. donor
priorities
 Predictability vs. performance orientation

Budget support engagements in 6
countries
 Fiji, Kiribati, RMI, Samoa, Solomon Islands,
Tonga, Tuvalu
 Total disbursement of about US$150m
since 2010
 Focus on macro-fiscal management,
structural reforms, and human
development/social protection

Country
Reform Achievement
Macro-Fiscal Management
Kiribati
Proper investment management of its critical RERF assets
Samoa
Greater transparency and efficiency in public procurement
Solomon Is.
Legislative basis for a transparent and predictable mining tax regime
Tonga
Better public service pay management (averting sudden large pay rises)
Tuvalu
Better oversight of fisheries revenues
Structural Reform
Kiribati
Privatization of the telecommunications provider
Samoa
Legislative and regulatory basis for a modern payments system
Solomon Is.
Institutional changes to improve the transparency of land transactions
Tonga
Privatization of the International Dateline Hotel
Human Development/Social Protection
Samoa
Established fee-free primary schooling
Tonga
Raised excises on tobacco, alcohol and unhealthy foods to tackle NCDs
Tuvalu
Broadened vocational training opportunities for women
Country
PEFA
Kiribati
2013
2014
2015
Trend
-
1.8
-
-
-
-
-
N/A
3.0
3.0
2.9
2.9
3.0
3.0

2.1
-
-
2.8
-
-

4.1
4.1
4.1
4.0
4.0
4.0

-
-
2.1
-
-
-

2.8
2.9
3.0
3.0
2.9
3.0

2.7
-
-
-
-
-

3.5
3.4
3.5
3.5
3.5
3.5

-
2.1
-
-
-
2.8

-
-
2.8
2.8
2.8
2.9

-
1.7
2.2
CPIA
PEFA
Tuvalu
2012
CPIA
PEFA
Tonga
2011
CPIA
PEFA
Solomon Is.
2010
CPIA
PEFA
Samoa
<2010
CPIA
1.4
100%
Exceeded
90%
Achieved
80%
Achieved or Better
70%
60%
Partially Achieved or
Better
50%
Partially Achieved
40%
Not Achieved
30%
20%
Not Rated
10%
Not Achieved or Not
Rated
0%
Kiribati
Solomon Is.
Samoa
Tonga
PICs
EAP
Global
A joint policy matrix and single policy
dialogue mechanism.
 Strong government ownership of
supported reforms.
 Supported policy actions address
critical constraints to development
progress.
 Policy matrices with a small number of
substantial reforms.
 Technical assistance provided to
support actions in the policy matrix.

A medium-term perspective.
 Government and donors share a clear
understanding of objectives of
supported reforms.
 Balance between flexibility and
predictability.
 Adequate time and resourcing for
policy dialogue (especially during early
stages).
 Shared analysis to improve dialogue.
