Post-conflict budget support lessons from Mozambique

Denmark has little experience to draw on with aid when it comes to the continuum from war through post-conflict reconstruction to democratic stabilization. One notable exception is the support provided to Mozambique over the past decades, which besides its focus on providing key state services also contributed to creating political legitimacy in the form of popular acceptance of a contested regime, thereby bolstering its authority.

This policy brief revisits the main lessons from support to Mozambique during its post-conflict reconstruction phase, when Danish aid in many ways broke new ground and, importantly, helped prepare the ground for the present emphasis on public sector reform, and sector and general budget support. In important ways, lessons from Mozambique suggest that sector and general budget support should not be only for relatively functional states, as present Danish and EU thinking about budget support suggests, but rather that some kind of budget-like support is a sine non qua during post-conflict reconstruction.

The main recommendation is that sector and general budget support is considered from the beginning in post-conflict situations. This is important as one cannot expect a significant impact of peace-dividends on the state budget, since such dividends seldom translate into increased economic capabilities. This makes sector/budget support a necessity.

Other recommendations are that government and state legitimacy should be a key criterion for how and what to support when budget support-like modalities are used and that aid is used for staff, input and recurrent costs in sectors that have the most rapid and significant positive impact on people's lives, which are usually to be found in the health, education, agriculture and security sectors.