This paper prepared for the Practitioners' Forum on Budget Support in South Africa (May 2006), reviews the current state of the debate about policy alignment and performance assessment, focusing particularly on the troublesomerelationship between budget-support Performance Assessment Frameworks and PRS annual progress reviews. It argues that further advances in alignment will be achieved only if more explicit attention is given to the recipient side of the relationship and the reasons why Annual Progress Reports do not have the qualities donors expect. Until this is done, there is a case for simplifying PAFs but not for making them more results-based. PAFs should build country ownership by including only the sorts of conditionalities that are likely to work, and combining these with a multi-level selectivity and complementary actions to address missing preconditions for aid effectiveness.
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