IDA15

AID ARCHITECTURE: AN OVERVIEW OF THE MAIN TRENDS
IN OFFICIAL DEVELOPMENT ASSISTANCE FLOWSInternational Development Association
Resource Mobilization (FRM)
February 2007

Abbreviations and Acronyms
AfDF
CDM
CMEA
CRS
DAC
DAG
DFID
GFATM
GAVI
GNI
HIPC
HPG
IBRD
IDA
IEG
IMF
IRAI
LDC
MDB
MDRI
MDGs
NGO
OCHA
ODA
ODI
OECD
PRSP
PSI
TA
UK
UN
UNAIDS
UNDP
UNICEFUSA
USAID

African Development Fund
Clean Development Mechanism
Council for Mutual Economic Assistance (also known as
COMECON)
Creditor Reporting System
Development Assistance Committee
Development Assistance Group (predecessor of DAC)
Department for International Development
Global Fund to Fight Aids, TB and Malaria
GAVI Alliance (formerly known as Global Alliance for
Vaccines and Immunization)
Gross National Income
Heavily Indebted Poor Country
Humanitarian Policy Group (part of ODI)
International Bank for Reconstruction and Development
International Development Association
Independent Evaluation Group (World Bank)International Monetary Fund
IDA’s Resource Allocation Index
Least Developed Country
Multilateral Development Bank
Multilateral Debt Relief Initiative
Millennium Development Goals
Non Governmental Organization
UN Office for the Co-ordination of Humanitarian Affairs
Official Development AssistanceOverseas Development Institute
Organisation for Economic Co-operation and Development
Poverty Reduction Strategy Paper
Policy Support Instrument
Technical Assistance
United Kingdom
United Nations
Joint UN Program on HIV/AIDS
United Nations Development Programme
United Nations Children’s Fund
United States of America
U.S. Agency for International Development

TABLE OF CONTENTS

Executive Summary ................................................................................................................. ….iI.

Introduction ....................................................................................................................….1

II.

Overview of Trends in Official Development Assistance ...................................................2
A. Overall Trends in ODA Flows ....................................................................................2
A.1 Main Trends in Volumes and Terms...................................................................2
A.2 Bilateral vs. Multilateral ODA............................................................................4
A.3 Gross Disbursements and Credit Reflows...........................................................5
A.4 Fast-Disbursing ODA Trends .............................................................................6
B. The Distribution of ODA ............................................................................................6
B.1 Distribution of ODA Per Income Group .............................................................6
B.2 ODA Trends for IDA-Eligible Countries. ..........................................................7
B.3 Geographical Distribution of ODA .....................................................................9
B.4 Sectoral Distribution of ODA .............................................................................9III. Proliferation of Aid Channels ............................................................................................12
A. The Donors’ Viewpoint.............................................................................................15
B. The Recipients’ Viewpoint........................................................................................16
IV. Fragmentation of Official Development Assistance..........................................................21
A. Aid Fragmentation and Associated Costs……………………………… ...………..21
B. The Paris Declaration Agenda…………………………...………………………....24
V.

Concluding Remarks..........................................................................................................25

TablesTable 1. ODA for Sector Programs, General Budget Support and Debt Relief.................................... 6
Table 2. IDA Share of Net ODA Disbursements (2001-2005) .......................................................... 8
Table 3. Distribution of ODA Commitments to IDA-Eligible Countries by Bilateral Donors andMultilateral Organizations ...................................................................................................... 12
Table 4. Government Capacity and Donor Fragmentation in Low-Income Countries (2004).............. 23

ChartsChart 1. ODA from DAC Donors to Developing Countries and Multilateral Organizations ................. 3
Chart 2. Average Amount of Multilateral ODA Received by Main International Organizations .......... 4
Chart 3. Funding of ODA and ODA Receipts by Developing Countries, 1994-2005………………….5
Chart 4. Share of Total ODA for Low- and Middle-Income Countries………………………………...7
Chart 5. ODA from DAC Donors and and Multilateral Organizations to IDA Countries.......................8
Chart 6. Breakdown of ODA by Regions………………………………………………………………9Chart 7. Distribution of sector allocable ODA to Low-Income Countries and Sub-Saharan Africa .... 11
Chart 8. Donor View of ODA through Bilateral and Multilateral Channels ........................................ 15
Chart 9. Recipient Countries View of Aid Channels ............................................................................ 17
Chart 10. Number and Average Size of Donor Activites included in the CRS Database....................... 22

TABLE OF CONTENTS (cont’d)
Text Boxes
Box 1. Non-DAC and Emerging Donors............................................................................................ 13
Box 2. Alternative Measures of Proliferation and Fragmentation ...................................................... 14
Box 3. Global Programs and Vertical Funds ...................................................................................... 18
Box 4. Health Sector Financing and Public Spending: The Case of Rwanda .................................... 20
Box 5. Example of Aid Transaction Costs in Tanzania...................................................................... 23
Annexes
Annex I. A Brief History of the Aid Architecture.................................................................................. 27
Chart 1: Increase of Net ODA due to the Widening of the List of ODA Eligible Activities(1978-2005)……………………… ................................................………………………....33
Chart 2: Bilateral ODA to Countries Added to the DAC list of Aid Recipients
since1989………………………… ................................................………………………....34
Chart 3: Official and Private Flows and ODA as a Share of GNI in DAC Countries andMajor Events on Aid Targets (1960-2005)…………………………………………………...36
Annex II. List of Bilateral Donors......................................................................................................... 42
Annex III. List of Main International Development Organizations ........................................................ 43
Annex IV. Long-Term Trends in DAC ODA.......................................................................................... 53
Annex V. Bilateral vs. Multilateral Contributions, 2000-2005 ............................................................. 54

EXECUTIVE SUMMARYi.
This paper provides background data and analysis to help inform upcoming
discussions on the role of IDA in the global aid architecture. The paper reviews broad
trends in Official Development Assistance (ODA) flows; the growing complexity of theexisting global aid architecture; and the prospects and challenges facing the donor
community going forward. It relies heavily on analysis of data from OECD’s DAC
database, as well as from the Creditor Reporting System (CRS). 1
Overview of Trends in Official Development Assistanceii.

Key trends in ODA volumes and terms:¾

Funding for ODA has been growing steadily over the last decade, with net ODA
disbursements reaching US$105 billion (at constant 2004 prices) in 2005.

¾

Much of the recent increase in ODA has been due to debt relief, and to a lesser
extent to emergency assistance and administrative costs of donors. In realterms, debt relief alone explains almost 70 percent of the increase in ODA
between 2004 and 2005.

¾

In contrast, the resumption of growth in ODA for core development programs
since the late 1990s has been less marked than in the case of total ODA. Core
development ODA grew on average 4.6 percent p.a. during 2001-2005, while
total ODA grew by 11.4 percent p.a. over the same period.2¾

IDA’s role as the main channel for multilateral ODA has been surpassed by theEuropean Commission and the United Nations system since the 1990s.

¾

ODA terms have become increasingly concessional, with almost 90 percent ofbilateral ODA being in the form of grants.

iii.

Key trends in the distribution of ODA across recipient countries:¾

IDA-eligible countries have received in recent years less ODA for coredevelopment programs than they did on average during the early 1990s.

¾

IDA’s share in ODA for core development programs for IDA-eligible countries
has been growing, even on a net disbursement basis.

¾

General budget and sector program support rose as a percentage of total ODA
commitments from 8 percent in 2001 to 20 percent in 2004.

¾

The share of social sectors in sector allocable ODA to low-income countries rosefrom 29 percent in the early 1990s to 52 percent between 2001 and 2004.

¾

In parallel, the combined share of infrastructure and production dropped from 59
percent to 38 percent over the same period.

The Growing Complexity of the Global Aid Architecture
iv.
Proliferation of aid channels, ODA fragmentation and a significant degree of
earmarking have contributed to increase the complexity of the global aid
1
2

Invaluable contributions by DAC staff are gratefully acknowledged.
The corresponding growth rates for the last decade are respectively 2.8 and 5.4 percent per annum.

- ii -

architecture. Data analysis shows that there has been a proliferation of bilateral andmultilateral agencies which interact with recipient countries. For instance, the average
number of donors per country rose from about 12 in the 1960s to about 33 in the 20012005 period. In addition, there are currently over 230 international organizations, funds,
and programs. Donor proliferation seems to be particularly pronounced in the healthsector, where more than 100 major organizations are involved. This is accompanied bysignificant earmarking of aid resources for specific uses or for special-purpose
organizations, including global programs or “vertical” funds. In fact, about half of the
ODA channeled through multilateral channels in 2005 went through some degree of
earmarking by sector or theme. “Verticalization” or earmarking of ODA has also been
observed in some bilateral assistance programs. Available data for 2004 also indicates alarge number of aid activities, which tend to be small in financial size.
v.
The complexity of the aid architecture increases transaction costs for donors
and recipients alike, which reduces the effectiveness of aid. Although the transaction
costs of aid have not been systematically quantified, there is evidence that donor
proliferation and aid fragmentation represent a tax on recipient countries’ implementation
capacity.
vi.
Non-DAC and “emerging” donors are becoming increasingly important as
ODA providers. New donors bring with them more resources to help developing
countries reach their MDGs. At the same time, new challenges for harmonization andalignment are created. Non-DAC donors are a heterogeneous group: the degree to which
DAC approaches and norms as regards the provision aid finance are applied by non-DAC
donors varies from country-to-country. Insufficient data on non-DAC ODA makes it
difficult to accurately assess aid volumes and prospects from these sources. Non-DAC
OECD countries alone are expected in aggregate to double their current ODA levels toover $2 billion by 2010.
Concluding Remarksvii.
ODA has grown steadily over the last decade, and is expected to continue torise as donors have committed to significantly scale-up aid to achieve the MDGs. To
make effective use of such scaled-up ODA at the country level, a number of
implementation challenges would need to be addressed by donor and recipients. The
most upfront challenges include:¾

Achieving complementarity across national, regional and global development
priorities and programs; and¾ Strengthening recipient countries’ ability to make effective use of potentiallyscaled-up fast-disbursing ODA, such as budget support.

viii. A platform for achieving complementarity across national, regional and global
development priorities and programs can be found in the principles and targets of theParis Declaration. In addition, country-level effectiveness of a potential scaling-up inprogrammatic ODA – added to the increased fiscal space brought about by recent debt
relief initiatives – can be enhanced if country systems are strengthened.

AID ARCHITECTURE: AN OVERVIEW OF THE MAIN TRENDS
IN OFFICIAL DEVELOPMENT ASSISTANCE FLOWS
I. INTRODUCTION
1.
IDA Deputies have expressed interest in discussing IDA’s role in the international
aid architecture. A number of topics would be included in a discussion, such as: (i) how todefine IDA’s role in the global aid architecture to best assist countries to achieve the MDGs;(ii) IDA’s role in regional aid architectures, including the division of labor with otherinstitutions in promoting regional integration and cooperation; and (iii) the implementationof the harmonization and alignment agenda, and how the Paris Declaration agenda could
contribute to positive change in the global aid architecture.
2.
This paper provides background data and analysis to help inform upcoming
discussions on aid architecture. As such, the paper will focus on broad trends in Official
Development Assistance (ODA) flows as well as on some of the main features of theexisting global aid architecture. 3 Therefore, it aims to provide a common basis for theensuing in-depth discussions of how IDA fits in this architecture – a topic that will be taken
up by subsequent papers to be presented for discussion during the IDA15 negotiations. The
paper relies heavily on analysis of data from OECD’s DAC database, as well as from theCreditor Reporting System (CRS).
3.
Aid architecture can be defined as the set of rules and institutions governing aid
flows to developing countries. While aid has an architecture, it has no single architect. 4 It
has evolved over time much of it without a pre-defined blueprint. Most of today’s aid
principles and institutions are the result of over half a century of debate and joint decisionmaking. Broadly speaking, two aid “architectures” can be distinguished: the “Cold War
Architecture”, which lasted from the end of World War II to the fall of the Berlin Wall in
1989; and the “Post Cold War Aid Architecture”, which started in 1990 and is still prevalent
today.
4.
This paper is organized as follows. Section II provides an overview of the main
trends in ODA, focusing on overall trends in ODA flows and the distribution of ODA acrossrecipient countries. Sections III and IV discuss some of the key factors behind the growing
complexity of the existing aid architecture: the proliferation of aid channels and thefragmentation of ODA. Section V concludes with a brief look into the main challenges
facing the donor community going forward. A summary of the historical evolution of theinternational aid architecture is provided in Annex I. Lists of bilateral donors as well as ofthe main international organizations are respectively provided in Annexes II and III. Annex
IV presents data on long-term DAC ODA trends, and Annex V shows donor-by-donor
bilateral and multilateral contributions over the 2000-2005 period.

3

4This paper, however, is not meant to provide a comprehensive survey of the fast-growing literature on
aid architecture.
A discussion of possible roles for an aid “architect” can be found in Burall, S. and S. Maxwell, with
A.R. Menocal (2006), “Reforming the International Aid Architecture: Options and Ways Forward”.
Overseas Development Institute Working Paper 278, October.

-2II. OVERVIEW OF TRENDS IN OFFICIAL DEVELOPMENT ASSISTANCE 5
5.
A closer examination of major ODA trends can facilitate a better understandingof the key issues affecting the existing global aid architecture. The figures reported inthis Section come from the OECD’s DAC database, as well as from the Creditor Reporting
System (CRS). 6 In what follows, subsection A looks into some of the main trends in ODA
flows, while subsection B focuses on how ODA has been distributed across recipient
countries.
A.

Overall Trends in ODA Flows

A.1. Main Trends in Volumes and Terms
6.
After a protracted decline during the 1990s, funding for Official Development
Assistance has been growing steadily over the last decade. 7 ,8 As shown in Chart 1, net
ODA disbursements have consistently risen in real terms since the late 1990s, and reached
US$105 billion (at constant 2004 prices) in 2005, up from about US$58 billion in 1997. Net
ODA disbursements in 2005 can be decomposed as follows: 64 percent for core development
programs; 24 percent for debt relief; 8 percent for emergency assistance; and 4 percent for
donors’ administrative costs. In fact, 1997 ODA levels mark the reversal of a previously
declining trend – in real terms, total funding for ODA in that year was the lowest since 1983.
7.
Much of the recent increase in ODA has been due to debt relief, and to a lesser
extent to emergency assistance and administrative costs of donors. The main driver ofthe more recent increase in total ODA has been debt relief, as shown in Chart 1: Debt relief
grew steeply since the end of the Cold War, having reached an average annual growth rate –at 2004 prices – of 63 percent between 2001 and 2005. In addition, in real terms, debt relief
explains almost 70 percent of the increase in ODA between 2004 and 2005 – most of which(US$19 billion) benefiting Iraq and Nigeria.
8.
In contrast, the resumption of growth in ODA for core development programs
since the late 1990s has been less marked than in the case of total ODA. Official
development assistance (ODA) for core development programs (bilateral and multilateral,
excluding selected special-purpose grants such as debt relief, administrative costs of donors,
and emergency assistance) has not grown as fast as total ODA, as shown in Chart 1. Core
development ODA grew on average 4.6 percent p.a. during 2001-2005, while total ODA

5

6
7

8

ODA is defined as “grants or loans provided by official agencies (including state and local
governments, or by their executive agencies) to developing countries (countries and territories on the
DAC List of Aid Recipients) and to multilateral institutions for flows to developing countries, eachtransaction of which meets the following test: (a) it is administered with the promotion of theeconomic development and welfare of developing countries as its main objective; and (b) it isconcessional in character and contains a Grant Element of at least 25 per cent (calculated at a rate ofdiscount of 10 per cent). In addition to financial flows, Technical Co-operation is included in aid.
Invaluable contributions from DAC staff are gratefully acknowledged.
As noted in the draft 2007 Global Monitoring Report, preliminary DAC estimates indicate that total
net ODA dipped in 2006, although it is expected to continue on a rising trend through 2010.
The rising importance of non-DAC donors is not fully captured in DAC data: “Data on so-called
South-South assistance are incomplete, however, making it difficult to obtain comprehensive
information on South-South aid volumes and prospects”. IMF and World Bank (2006). Global
Monitoring Report, p. 75.

-3grew by 11.4 percent p.a. over the same period. 9 In real terms, only in 2005 did ODA for
core development programs exceed its 1992 levels.
Chart 1. ODA from DAC Donors to Developing Countries and Multilateral Organizations 10(Net disbursements, US$ million at 2004 prices, 1960-2005)
120,000

100,000

80,00060,00040,00020,000Core Development Programs

Administrative costs of donors

Emergency Assistance

20
04

20
02

20
00

19
98

19
96

19
94

19
92

19
90

19
88

19
86

19
84

19
82

19
80

19
78

19
76

19
74

19
72

19
70

19
68

19
66

19
64

19
62

19
60

-

Debt Relief

Source: DAC online (Tables 1 and 2a)9.
The recent upward trend in ODA volumes has been accompanied byincreasingly concessional ODA terms. 11 Almost 90 percent of bilateral ODA is in theform of grants. As a result of an overall consensus reached within DAC in the late 1970s,
there has been a marked increase - from less than 60 percent 1975 to almost 90 percent in2005 – of bilateral ODA being provided as grants. 12 More recently, there has also been an
increase in the use of grants by multilateral organizations. The grant element of ODA loans
has also increased, though it is more difficult to compare across time given that the nominal
discount rate used in the calculation of the grant element has not changed over time while
market rates have fluctuated widely.

9
10

11

12

The corresponding growth rates for the last decade are respectively 2.8 and 5.4 percent per annum.
Data for this chart is presented from a source of funds perspective, whereby recipient country groups
cannot be distinguished. Donors started considering significant amounts of administrative costs as partof ODA in 1979. See Annex I, subsection C.1.
The donor community has been focusing its attention on aid terms since the early days of DAC. Therewas wide support among donors for a progressive softening of aid terms. By 1972, an agreement had
been reached within DAC on a target of an 84 percent grant element in aid with special conditions for
Least Developed Countries, a concept introduced by the UN only one year earlier. The final terms agreed in 1978 - included a grant element of ODA commitments of 86 percent (90 percent for LDCs).
Assistance to the social sectors and multi-sector assistance (e.g., environment, women in development)
as well as support to NGOs are provided mostly as grants, while ODA to infrastructure is mostly
through loans.

-4-

A.2. Bilateral vs. Multilateral ODA
10.
About 70 percent of ODA flows have been provided through bilateralorganizations and 30 percent through multilateral organizations. 13 The share ofbilateral ODA has remained relatively stable at 70 percent of total aid flows since the mid
1970s, with the exception of 2005 when bilateral ODA reached 78 percent of the total.
However, there is a great deal of donor-by-donor variance in terms of bilateral vs.
multilateral contributions: the shares of multilateral contributions in total ODA flows for the
2000-2005 period range from 9 to 64 percent.
11.
Among multilateral organizations, IDA’s role as the main channel for
multilateral ODA has been surpassed by the European Commission and the United
Nations. Since the 1990s, the most important channel for multilateral ODA has been theEuropean Commission as shown in Chart 2, which shows only core contributions tointernational organizations. 14 The amounts of core contributions channeled through IDA
and, on a smaller scale, through regional banks peaked in the 1980s and have declined
thereafter. IDA’s share in total multilateral ODA declined from 42 percent in the 1970s to
an average of 20 percent in the 2001-2005 period.
Chart 2. Average Amount of Multilateral ODA (core contributions) Received by Main International
Organizations
9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

1960-19691970-1979
IBRD, IFC, MIGA

1980-1989
Regional Banks

Other agencies

1990-2000
IDA

UN Agencies

2001-2005
EC(Net disbursements, US$ millions at 2004 prices, period averages, 1960-2005)
Source: DAC online (Table 1)

13

14

A key issue in understanding this data is that the bilateral assistance percentage includes funds which
are actually managed by international organizations for specific uses. This issue is discussed
subsequently in the paper.
Staff estimates based on Annual Reports. However, once trust funds and non-core contributions to the
UN – which DAC records as bilateral ODA – are considered, the UN becomes the most important
multilateral channel with annual core and non-core contributions amounting to nearly US$ 12 billion in2005. In comparison, if trust funds are added to core contributions, the totals for IDA in 2005 become
US$ 8.4 billion, still well below the UN. These totals exclude GEF, GFATM, and the HIPC TF.

-5A.3. Gross Disbursements and Credit Reflows
12.
Due primarily to credit reflows, gross disbursements by multilateral ODA
providers such as IDA exceeds the contributions they receive from donors. 15 In thecase of IDA, internal resources comprise credit reflows and investment income on IDA’s
liquid assets – to which IBRD transfers are added. 16 The fact that IDA and othermultilateral development banks can finance part of their assistance to developing
countries on the basis of internal resources – which include credit reflows – mean that
their “presence” in recipient countries is greater than what would be implied by net
disbursement figures. Chart 3 describes several financial flows (cumulative for the 19942005 period): (i) bilateral ODA for developing countries; (ii) bilateral donor
contributions to multilateral channels; (iii) multilateral outflows to developing countries;and (iv) reflows from developing countries to bilateral and multilateral donors. 17 The
chart also indicates that IDA is the third largest recipient of funding for multilateral ODA(US$ 55 billion, cumulative for 1994-2005), but the second largest (after the EC)
provider of multilateral ODA to developing countries (US$66 billion, cumulative net
disbursements for 1994-2005). 18
Chart 3. Funding of ODA and ODA Receipts by Developing Countries, 1994-2005(Gross Disbursements and Reflows, US$ billion, Cumulative, 2004 Prices)

Official
Bilateral
Donors

28

84

25

55
64

642 100
Other
Multilateral

Regional
Banks

12

IDA

UN Agencies

EC

29

71

1

3

7

14
40
80

21
Developing Countries
and Territories

LEGEND

Gross disbursements
Reflows

Source: DAC Online Tables 1a and 2a

15

16

17

18

Credit reflows are borrower repayments on credits that have been disbursed and are outstanding,excluding interest.
IBRD has contributed resources from its net income and surplus to support IDA’s replenishments,
since the inception of IDA. In FY07, an IFC grant of US$150 million was also approved to support
grant-financed private sector development projects in IDA countries. See IDA (2007). “IDA’s LongTerm Financial Capacity”. Resource Mobilization Department, February.
The difference between ODA funding received by multilateral institutions and multilateral outflows todeveloping countries is due to a number of factors, including the time lag between funding anddisbursement, administrative costs and other expenditures (including research) that is not directed toany specific recipient country, and contributions to other multilaterals (as e.g. in the case of theEuropean Commission).
IDA remains the largest provider of multilateral ODA to IDA-eligible countries. See also IDA (2007),
op. cit., for a detailed discussion of the impact of debt relief and IDA grants on IDA’s credit flows andassistance capacity going forward.

-6A.4. Fast-Disbursing ODA Trends
13.
The share of general budget support and sector programs 19 in totalcommitments has increased in recent years. Table 1 shows that general budget and sector
program support as a percentage of total ODA commitments rose from 8 percent in 2001 to
20 percent in 2004. Most of this increase is attributable to sector programs, which nearly
tripled between 2003 and 2004. Low-income countries received the lion’s share (63 percent)of total general budget and sector program support in 2004. Table 1 also shows that, during
the 2001-2004 period, low-income countries were the main beneficiaries of commitments fordebt relief (about 90 percent in 2004), which from a macroeconomic point of view is akin to
fast-disbursing ODA.
Table 1. ODA for Sector Programs, General Budget Support and Debt Relief(Commitments, US$ million at 2004 prices, 2001-2004)
Type
Sector Programs (1)Low Income
Middle Income
UnallocatedGeneral Budget Support
Low Income
Middle Income
UnallocatedTotal General and Sector Support
Debt relief
Low Income
Middle Income
Unallocated2001

US$ amounts (2004 prices)
2002
2003
2004

641
199
441
0
4,847
3,919
913
14
5,488
5,582
2,962
2,601
19

1,984
774
1,105
105
5,850
4,853
990
8
7,834
8,504
5,263
3,102
139

5,404
1,591
3,645
168
6,395
3,635
2,745
16
11,79917,778
14,7713,003
414,666
7,854
6,011
800
5,249
4,631
608
11
19,915
8,570
7,578
899
93

2001

% of total commitments
2002
2003
2004

1%
0%
1%
0%
7%
5%
1%
0%
8%
8%
4%
4%
0%

2%
1%
1%
0%
7%
6%
1%
0%
10%
10%
6%
4%
0%

6%
2%
4%
0%
7%
4%
3%
0%
12%
18%
15%
3%
0%

(1) Excluding debt relief and general budget support to avoide double counting. Only commitments with no investment or TC components.

Source: CRS Online (Table 1)

B.

The Distribution of ODA

14.
Five dimensions of the distribution of ODA across recipient countries are
examined in this subsection: (i) the distribution of ODA per income group; (ii) ODA
trends for IDA-eligible, low-income countries; (iii) the geographical distribution of ODA;
and (iv) the sectoral distribution of ODA.
B.1. Distribution of ODA per Income Group15.
The share of ODA going to low-income countries has been above 60 percent
since the 1970s, reaching about 67 percent over the 2001-2005 period. Chart 4 below
shows how total ODA has been distributed over time to four country income categories 20 :19

DAC’s Creditor Reporting System (CRS) does not include a subset of data for sector programs
provided through budget support. Sector programs are defined by DAC as follows: “Sector
programme aid comprises contributions to carry out wide-ranging development plans in a defined
sector such as agriculture, education, transportation, etc. Assistance is made available "in cash" or "inkind", with or without restriction on the specific use of the funds, but on the condition that the recipient
executes a development plan in favour of the sector concerned.” The definition is similar to that of a
SWAp and includes, but it is not limited to, sector budget support.

20

Least Developed Countries are a UN category and not defined in terms of a per capita GNI threshold:“Since 1971, the United Nations has denominated ‘Least Developed Countries’ (LDCs) a category of

15%
8%
6%
1%
5%
5%
1%
0%
20%
9%
8%
1%
0%

-7(i) least developed countries (LDCs); (ii) other low-income countries (OLICs); (iii) lowermiddle income countries (LMICs); and (iv) upper-middle income countries (UMICs). Except
for the 1960s, the average share of ODA going to low-income countries (LDCs and OLICs)
has been 60 percent or above. In addition, low-income countries received about 64 percent
of ODA from bilateral sources and 74 percent of ODA from multilateral sources over the
2001-2005 period.
Chart 4. Share of Total ODA for Low- and Middle-Income Countries (%)

100%
80%
60%
40%
20%
0%
1960-19691970-1979
LDC

1980-1989

1990-2000

OLIC

UMIC

LMIC

2001-2005

Source: DAC online (Table 2a).

B.2. ODA Trends for IDA-Eligible Countries
16.
Total ODA to IDA-eligible countries has been increasing over time. Chart 5
shows the increasing importance of special-purpose grants such as emergency assistance anddebt relief. In view of the debt relief provided to Iraq, the share of total debt relief in total
ODA for all developing countries in 2005 was 38 percent, compared to 22 percent for IDAeligible countries only.
17.
However, IDA-eligible countries have received in recent years less ODA for coredevelopment programs than they did on average during the early 1990s. In fact, as
indicated in Chart 5, the average annual ODA for core development programs received by
IDA-eligible countries in the 2001-2005 period – about $32 billion at 2004 prices - is still
below the 1991-1995 average – about $33 billion per year. Furthermore, chart 5 shows amarked declined in core development ODA for those countries between 1994 and 1999. In
recent years, there seems to have been some recovery in ODA flows for core development
programs for IDA-eligible countries, but not enough to reach the levels observed by the late

low income States that are deemed structurally disadvantaged in their development process, and facing
more than other countries the risk of failing to come out of poverty.” United Nations Conference on
Trade and Development (2005), Statistical Profiles of the Least Developed Countries 2005, p. 6. Other
Low-Income Countries (OLICs) are those non-LDCs with per capita GNI below US$825 in 2004;
Lower-Middle Income Countries and Territories (LMICs) are those with per capita GNI between
US$826 and US$3,255 in 2004; and Upper-Middle Income Countries are those with per capita GNI
between US$3,256 and US$10,065 in 2005. See DAC List of ODA Recipients, effective from 2006 forreporting on 2005, 2006 and 2007.

-81980s. 21 On the other hand, core development ODA provided by IDA showed greater
stability over the 1990s, fluctuating between US$4.2 billion and US$5.7 billion (both figures
at 2004 prices) during this period.
Chart 5. Official Development Assistance from DAC Donors and Multilateral Organizations to IDAEligible Countries(Net disbursements, US$ million at 2004 prices, 1960-2005)
60,00050,00040,00030,00020,00010,000

04
20

00

02
20

98

Emergency Assistance

20

19

94

96
19

92

Core Development Programs (all donors but IDA)

19

19

88

90
19

19

86

84

82

19

19

19

78

80
19

76

Core Development Programs (IDA only)

19

19

72

74
19

19

70

66

68

19

19

19

62

19

60

19

19

64

-

Debt Relief

Source: DAC online (Table 2A)

18.
IDA’s share in ODA for core development programs for IDA-eligible countries
has been growing, even on a net disbursement basis. As indicated in Chart 5, between
2001 and 2005, IDA’s cumulative net ODA for core development programs exceeded US$33
billion (at 2004 prices), or about 20 percent of the total core development ODA for IDAeligible countries. Furthermore, in the recent past, IDA has provided more than 20 percent
of ODA in 17 countries; between 10 and 20 percent in 34 countries; between 5 and 10
percent in 12 countries and less than 5 percent in 18 countries as shown in Table 2.
Table 2: IDA Share of Net ODA Disbursements (2001-2005)
IDA share> 20%
10% < 20%

5% < 10%< 5%

21Country
Armenia, Bangladesh, Comoros, Chad, Eritrea, Ethiopia, Gambia, Georgia, Ghana,
India, Madagascar, Pakistan, Rwanda, Senegal, St. Lucia, Uganda, Vietnam,
Albania, Azerbaijan, Benin, Bolivia, Bosnia-Herzegovina, Burkina Faso, Burundi,
Cape Verde, Congo Dem. Rep. (Zaire), Cote d'Ivoire, Djibouti, Grenada, Guinea,
Guinea-Bissau, Honduras, Kyrgyz Republic, Laos, Lesotho, Malawi, Maldives,
Mali, Mauritania, Moldova, Mongolia, Mozambique, Nicaragua, Niger, Sierra
Leone, Sri Lanka, St.Vincent, Tajikistan, Tanzania, Yemen, Zambia
Bhutan, Cambodia, Cameroon, Congo, Rep., Dominica, Guyana, Kenya, Nepal,
Nigeria, Samoa, Sao Tome & Principe, and Tonga.
Afghanistan, Angola, Central African Republic, Haiti, Indonesia, Kiribati, Liberia,
Myanmar, Papua New Guinea, Serbia & Montenegro, Solomon Islands, Somalia,
Sudan, Timor-Leste, Togo, Uzbekistan, Vanuatu, Zimbabwe

No.
17

The total amounts refer to ODA received by low income countries from bilateral and multilateralsources. The chart is presented from a uses of funds perspective.

34

12
18

-9B.3. Geographical Distribution of ODA
19.
Sub-Saharan Africa’s share of total ODA has been growing for almost half acentury, from a little more than 20 percent in the 1960s to over a third of total ODA
today. 22 This can be seen in Chart 6. During the last five years (2001-2005), most of ODA
flows have been directed to Sub-Saharan Africa (38 percent), South and Central Asia (15percent), the Middle East and North Africa (14 percent), and Far East Asia (11 percent). It
should be noted, however, that debt relief for Nigeria accounts for a substantial share ofrecent growth in ODA to Africa.
Chart 6. Breakdown of ODA by Regions (%)

Source: DAC Online, Table 2a

B.4. Sectoral Distribution of ODA
20.
The share of the social sectors in total sector allocable ODA 23 to low-income
countries has grown from 29 percent in the early 1990s to 52 percent in 2000-2004.
22

23

ODA is the most important source of capital inflows for most countries in Sub-Saharan Africa,“contributing nearly half of all net capital flows.” See Sundberg, M. And A. Gelb (2007). “Making Aid
Work”. Finance and Development, Vol. 43, No. 4, December, p.2.
DAC defines sector allocable ODA as: “Total sector allocable ODA is used to better reflect the sector
focus of donor’s programmes. It concerns all ODA flows aimed at fostering a peculiar sector in therecipient country (examples of sectors are: agriculture, education, health, water supply and sanitation,
government and civil society, transport and storage, etc.) and thus excludes all the contributions thatare not susceptible to allocation by sector (e.g., balance-of-payments support, actions relating to debt,
emergency assistance, and internal transactions in the donor country - administrative costs of donors,
Support to NGOs and Unallocated/unspecified ODA)”.

- 10 Currently, half of all sector allocable ODA goes to the social sectors. Within sector allocable
ODA, since 1990 there has been an overall shift from infrastructure and production to social
sectors 24 , as shown 25 in Chart 7 and Table 3, particularly for Sub-Saharan Africa, where they
now account for 60 percent of all sector allocable ODA. It is interesting to note that thistrend is concomitant to the rising trend in the share of grants in total ODA and the increasing
importance of ODA earmarking.
21.
In contrast, infrastructure ODA for low income countries – and especially for
Sub-Saharan Africa – has declined in relative terms. In the case of Sub-Saharan Africa,
the share of infrastructure in sector allocable ODA fell from 29 percent in the first half of the
1990s to 19 percent in the 2000-2004 period. There has also been a reallocation of aid
resources away from water and sanitation – which is classified by DAC under social
sectors. 26 This could be interpreted as an increasing financing of recurrent costs of service
delivery by government and non-governmental organizations.
22.
Three quarters of ODA for physical infrastructure for IDA-eligible countries
are provided by two bilateral donors (Japan and the US, together at 42 percent) andtwo multilateral donors (IDA and EC, together at 32 percent). Physical infrastructure isused here to refer to three sectors under the DAC classification for economic infrastructure:(i) transport and storage; (ii) communications; and (iii) energy. 27 Among the multilaterals,
IDA had the largest commitments, with about US$3.4 billion in commitments for physicalinfrastructure during 2004-2005, or about 20 percent of total physical infrastructurecommitments for IDA-eligible countries during this period. It is followed by the EC, with
about US$2 billion, 79 percent of which also classified under transport and storage. In turn,
IDA’s commitments for physical infrastructure in 2004-2005 were distributed as follows: 58
percent for transport and storage; 36 percent for energy; and 6 percent for communications.

24

25

26

27

“Other social sectors” comprise water and sanitation, population, health, government and civil society,and conflict, peace and security. “Production” includes agriculture, forestry and fishery; industry andmining; and tourism.
Chart 7 focuses on sector allocable ODA alone, while Table 3 covers both sector allocable and overall
ODA.
Within the social sectors, aid seems to have been reallocated from water and sanitation to governmentand civil society. As a share of total ODA allocated to the social sectors, water and sanitation fell from
22 percent in the 1990s to about 14 percent in 2001-2004, while government and civil society rosefrom 15 to 23 percent over the same period.
Cumulative commitments for 2004-2005, at constant 2004 prices. The source for the figures in thisparagraph is the CRS. “Economic Infrastructure”, as defined in the CRS Directives, includes also
“Banking” and “Business Services”.

- 11 Chart 7. Distribution of Sector Allocable ODA to Low Income Countries and Sub-Saharan Africa
Commitments, period averages, %, 1990-2004

Low Income Countries

11%

10%

11%

12%
15%
26%

26%
34%

33%

52%
39%
29%

1990-1994

1995-1999
Social sectors

Infrastructure

2000-2004

Production

Multisector

Sub-Saharan Africa

10%

12%

14%

12%
15%
24%
19%
26%

29%

60%
47%
33%

1990-1994

1995-1999
Social sectors

Infrastructure

Production

2000-2004
Multisector

Source: CRS Online (Table 1)

- 12 Table 3. Distribution of ODA Commitments to IDA-Eligible Countries by Bilateral Donors andMultilateral Organizations
US$ millions at 2004 prices, period averages, %, 1990-2004
Period1990-1994

SectorAmount1995-1999%

Amount2000-2004%

Amount%Education

1,926

7%

2,289

7%

3,771

8%

Other social sectors

4,782

16%

7,120

23%

11,91425%

Infrastructure

7,084

24%

7,243

23%

7,695

16%

Production

5,220

18%

3,598

11%

3,406

7%

Multi-sector

2,592

9%

2,735

9%

3,110

6%

Total Sector Allocable

21,60473%

22,98673%

29,897

62%

General Program Assistance

5,235

18%

3,421

11%

5,886

12%

Actions Relating to Debt

1,769

6%

2,625

8%

8,072

17%

838

3%

1,958

6%

3,642

8%

-

0%

20

0%

76

0%

Emergency
Administrative costs of donors
Support to NGOs

25

0%

12

0%

88

0%

Unallocated

123

0%

351

1%

344

1%

Grand total

29,594100%

31,374100%

48,006100%

Source: CRS online (Table 1)

III.

PROLIFERATION OF AID CHANNELS

23.
The global aid architecture has become increasingly complex, with the growing
importance of non-DAC and other “emerging” donors 28 as well as with a high degree ofaid proliferation and ODA fragmentation. This paper associates “proliferation” with thenumber of donor channels providing ODA to a given recipient country, and “fragmentation”
with the number of donor-funded activities as well as their average value. 29 Data analysis
shows that there are a growing number of bilateral donors and international organizations,funds and programs over the last half century. The number of bilateral donors grew from 5-6
in the mid 1940s to at least 56 today (see Annex II for a partial list). There has also been adramatic increase in the number of international organizations, funds and programs (seeAnnex III for a preliminary list 30 of over 230 of them). Many of these new funds andprograms are specialized in a particular sector or theme.
24.
The impact of the proliferation of aid channels can be seen from the perspectiveof both donors and recipients. Subsection A deals with the donors’ viewpoint, while
subsection B deals with the recipients’ viewpoint. It is useful to first clarify a few
conceptual issues. Aid channels can be either bilateral or multilateral, while ODA can bebilateral, multilateral or multi-bilateral. Multi-bilateral ODA refers to voluntary external
assistance from donors for a multilateral agency which is supplementary to core membershipcontributions and which is earmarked for specific purposes. 31 Given that such multi28
29
30

31

See Box 1 for a brief discussion on non-DAC and emerging donors.
See Box 2 for alternative measures of proliferation and fragmentation.
All organizations included in the DAC List of Main International Organizations plus 10 well-known
global programs not included in the list.
As stated in DAC’s Managing Aid (2005), “aid contributions qualify for recording as multilateralassistance only if: (a) they are made to an international institution whose members are governments
and who conduct all or a significant part of their activities in favour of developing (or transition)
countries; (b) those contributions are pooled with other amounts received so that they lose theiridentity and become an integral part of the institutions financial assets; and (c) the pooled contributions
are disbursed at the institution’s discretion. Any ODA or official aid which does not fulfil thesecriteria is classified as bilateral assistance. This includes multi-bilateral (multi-bi) assistance, i.e.,

- 13 bilateral aid is classified as bilateral aid in published DAC statistics, it has been necessary toseparately estimate this significant and growing type of ODA.
Box 1. Non-DAC and Emerging Donors
Non-DAC and emerging donors are becoming increasingly important as ODA providers. New donors bringwith them more resources to help developing countries reach their MDGs. At the same time, newchallenges for harmonization and alignment are created. Non-DAC donors are a fairly heterogeneous set ofcountries, which can be broadly classified into four groups 32 : (i) OECD countries which are not members of
DAC, such as Korea, Mexico, Turkey and several European countries; (ii) new European Union countries
which are not members of the OECD; (iii) Middle East and OPEC countries, particularly Saudi Arabia; and(iv) non-OECD donors that do not belong to any of the previous groups, including Brazil, China, India andRussia. Two of the most important policy challenges as regards non-DAC and emerging donors are: (i) the
limited availability of data regarding their aid volumes and terms; and (ii) their diverse approaches toharmonization and alignment.
Insufficient data on non-DAC ODA makes it difficult to accurately assess aid volumes and prospects fromthese sources. 33 Non-DAC OECD countries alone are expected in aggregate to double their current ODA
levels to over $2 billion by 2010. See Manning (2006), op. cit., p. 373. Available information suggests that
non-DAC donors have been particularly involved in humanitarian aid. In response to the Indian Ocean
tsunami in early 2005, for example, 70 non DAC donors responded with pledges of support. A recent ODI
study 34 found that non-DAC donors accounted for up to 12 percent of official humanitarian financing in the
period 1999-2004 (based on data from OCHA’s Financial Tracking System), focused their efforts in a few
countries (i.e., Afghanistan, Iraq, North Korea and the occupied Palestinian Territories), and preferredbilateral aid over multilateral routes.
Although a number of non-DAC donors signed the Paris Declaration (see subsection IV.C), harmonization
challenges remain present. The degree to which DAC approaches and norms as regards the provision aid
finance are applied by different non-DAC countries varies across the four country groupings described above.
Manning (2006) highlights three main risks for low-income countries (LICs) associated with insufficientharmonization between DAC and non-DAC donors: (i) LICs – particularly those with enhanced “borrowing
space” in the wake of MDRI – might find it easier to borrow on inappropriately non-concessional terms; (ii)
LICs may also have increased opportunities to access low-conditionality aid that could help postpone muchneeded reforms; and (iii) if good practices in project appraisal are not followed, increased aid could translate
partly into more unproductive capital projects in LICs. These risks could be mitigated by means of a strong,coordinated effort to implement the principles and targets of the Paris Declaration (see subsection IV.C).

32

33

34

voluntary external assistance from donors for a multilateral agency, supplementary to core membershipcontributions, which is earmarked for specific purposes.” (p. 102)
See Manning, R. (2006). “Will ‘Emerging Donors’ Change the Face of International Co-Operation?”,Development Policy Review, 24(4).
See IMF and World Bank (2006). Global Monitoring Report, p. 75: “Data on so-called South-South
Assistance are incomplete, however, making it difficult to obtain comprehensive information on SouthSouth aid volumes and prospects.”
Harmer, A. and L. Cotterrell (2005). Diversity in Donorship: The changing landscape of official
humanitarian aid. The Humanitarian Policy Group at the Overseas Development Institute.

- 14 Box 2. Alternative Measures of Proliferation and Fragmentation

The definitions of proliferation and fragmentation adopted in this paper are simple and intuitive, butthese terms are used in a somewhat different way in recent empirical studies. For example, Knack andRahman (2004, p. 12) define “donor fragmentation” as a large number of donors each with a small
share of the total aid provided to a given recipient country. Their definition – which is more closely
related to the definition of proliferation adopted in this paper – is translated into a measure that equals
one minus a Hirschman-Herfindahl donor concentration index 35 , as follows:

1 − ∑ s d2 ,where sd is the share of each donor in total ODA provided to a given recipient. By subtracting theHirschman-Herfindahl donor concentration index – which varies from 0 to 1 – from one, a measure ofdonor dispersion or “fragmentation” is obtained. They calculate this measure using two alternative
sources of data: DAC and Development Gateway’s AiDA (Accessible Information on Development
Activities) database. Based on the DAC data, they conclude (p. 14) that “year-by-year changes in thisfragmentation index, average over all countries, show an upward trend from 1975 onward. This
increase largely reflects an increase in the number of DAC donors.” This upward trend can be seen in
the chart below:

Acharya et al. (2006, p. 8) point out that “from the perspective of the aid recipient, donors can be
responsible for proliferation of two distinct kinds. The first we label source proliferation: the provisionof aid to a particular country from a wide variety of donors in relatively small amounts. The second,
use proliferation, is the division of aid among a wide variety of end-uses in-country. This latter
concern is essentially the old question of how far a given volume of aid is divided into small packets(‘projects’) or large packets (‘programmes’).” What they call “source proliferation” is closer to thenotion of proliferation adopted in this paper, while their concept of “use proliferation” is closer to“fragmentation” as used here.
Like Knack and Rahman, Acharya et al. calculate an Index of Recipient Fragmentation (IRF) –measuring “use proliferation” – based on a Hirschman-Herfindahl index. In addition, they calculate an
Index of Donor Proliferation (IDP) which aims to measure “how widely each donor disperses a budget
of $X” (p. 9). The IDP is based on an alternative measure of concentration, the Theil Index 36 . Theyshow that the IRF and the IDP are positively correlated, suggesting that “the very high degree offragmentation experienced by some aid recipients is directly attributable to the fact that their donors areespecially likely to proliferate their aid.” (p. 14).
35

36

The Hirschman-Herfindahl index is more commonly used as a measure of the degree of concentration– in terms of the number and size of firms – in a given industry. In this case, the parameter s would beinterpreted as the market share of each individual firm. The lower (higher) is the index, the more (less)competitive is the industry. A value of 1 for the index indicates a single monopolistic firm.
See also Kapoor, S. (2006). “Making Aid More Effective: Tackling Aid Proliferation and Aid
Fragmentation – A Think Piece”. World Bank, processed, for a review of this literature.

- 15 A.

The Donors’ Viewpoint

25.
Official bilateral donors channel resources through both bilateral andmultilateral channels. This is shown in Chart 8. In 2005, about a third of ODA (32percent) was channeled through multilateral channels, while the balance went directly todeveloping countries as described below. Over two thirds (70 percent) of the aid
disbursed to multilateral channels was multilateral, while the balance (30 percent) was
multi-bilateral, including trust funds. Multilateral channels can be distinguished between
multi-purpose international organizations (that operate in several sectors and countries
like the European Commission or IDA) and specialized or thematic internationalorganizations (whose activities are focused on a particular theme or sector, like UNICEF
or GFATM). 37
Chart 8. Donor View of ODA through Bilateral and Multilateral Channels
Core
contributions
Multi-purpose
International Organizations
Funds
Aid budgets
Debt
forgiveness
Reflows

Core
contributions
Official
Bilateral
DonorsNature of theorganization:
PublicFunds
PublicPrivate

Lotteries orAssets seized

Sector or
Thematic
International
Organizations

PrivateProposed
new sources(e.g., global
taxes)

Debt relief andactions on debt
Programs
Projects
Technical
Cooperation

Emergency(incl. food aid)
Developing Countries andTerritories

LEGEND

Multilateral ODA

Multi-bilateral ODA

Bilateral ODA

26.
About half of the bilateral contributions channeled through multilateralchannels in 2005 went through some degree of earmarking by sector or theme. This
figure is an approximation based on 2005 annual reports. It includes not only trust funds
and other multi-bilateral ODA, but also contributions to sector or thematically targeted
multilateral organizations. 38 Besides complicating budgetary management, 39 earmarking
may lead to a misalignment between donors’ and recipient countries’ priorities. By
constraining recipients’ flexibility in allocating resources, earmarking may contribute to
37

38

39

Within the latter group, it is also possible to differentiate between organizations that are controlled andmanaged by public entities (i.e., inter-governmental or inter-agency organizations like UNAIDS),
public-private partnerships (i.e., funded and operated through a partnership of government and/orintergovernmental organizations and one or more private sector companies or private foundations – asin the case of GAVI), or purely private (i.e., international NGOs like Médecins Sans Frontières).
Staff estimates of the distribution among channels are purely indicative, as DAC statistics do notprovide this level of detail. Estimates have been derived from the various organizations’ Annual
Reports (latest available) and then combined with information from DAC online.
See e.g. Gottret, P. And G. Schieber (2006). Health Financing Revisited. A Practioner’s Guide.
Washington, D.C.: The World Bank, 131.

- 16 underfunding of other investments which are equally important for economic growth andpoverty reduction.
B.

The Recipients’ Viewpoint

27.
The growing importance of sector/thematic international organizations andprivate donors further increased the complexity of the aid architecture from therecipients’ standpoint. The complexity of the various inter-linkages can be gauged byinspecting Chart 8 which also shows – besides ODA – a greater role for the private sector
in aid funding and implementation. Private philanthropy in aid has grown in importance inrecent years. 40 In addition, competition among multilateral channels for a largely stable
pool of resources has been combined with an increase in the role of private
providers/managers of aid. About 6 percent of all reported official aid to developing
countries has been provided through NGOs and public-private partnerships. The latter area new phenomenon that emerged in the mid 1990s when global programs started to bedeliberately set up outside the UN system. Global programs and “vertical funds” arediscussed in more detail in Box 3.

40

As noted in a recent study by the World Bank’s Global Programs and Partnerships (GPP), “according
to the U.S. Foundation Center, US foundations gave a record estimated $3.8 billion in 2005. The Gates
Foundation’s international giving is the major component of this, doubling from $526 million in 2002
to $1.2 billion in 2004.” See World Bank (2006), “Changes in the International Aid Architecture andODA Trends”, Global Programs and Partnerships, processed, p. 30. See also US Foundation Center(2006). International Grantmaking Update. Private philanthropic aid is also significant in Europe andJapan.

- 17 Chart 9. Recipient Countries’ View of Aid Channels
Core
contributions

Reflows
Multi-purpose
International Organizations

Time lagFunds
Aid budgetsCore
contributions
PublicDebt
forgiveness

Official
Bilateral
DonorsReflows

Funds
PublicPrivate

OthersTax
deductions

Sector or
Thematic
International
Organizations

PrivateOther (incl.
admin cost andawareness)

Debt relief andactions on debt

PrivateDonorsPrograms
Projects
Technical
Cooperation

Emergency(incl. food aid)
Developing Countries andTerritories

LEGEND

Multilateral ODA

Multi-bilateral ODA

Bilateral ODA

Private Aid- 18 -

Box 3. Global Programs and Vertical Funds
Global programs – often referred to also as “global funds” or “vertical funds” – are defined (see IEG, 2004)
as “partnerships and related initiatives whose benefits are intended to cut across more than one region of
the world and in which the partners: (a) reach explicit agreement on objectives; (b) agree to establish a new(formal or informal) organization; (c) generate new products or services; and (d) contribute dedicatedresources to the program.” In other words, global programs focus “vertically” on specific issues or themes,in contrast with the “horizontal” approach of the country-based model of aid.
While the first major global program, the Consultative Group on International Agricultural Research(CGIAR), was established 35 years ago, the current “boom” in vertical funds started in earnest whenseveral large such funds were created in the late 1990s. Contributions to global programs represented 3
percent of total ODA in 2005. The main sectors covered by global programs are health (e.g., the Global
Fund for Aids, Tuberculosis, and Malaria, GFATM) and environment (e.g., the Global Environmental
Facility, GEF). The rapid increase – in both size and country eligibility – of the Catalytic Fund (CF) under
the Education for All/Fast Track Initiative (EFA/FTI) in recent months will also mean that a rising share of
education sector financing will come from a global program.
“Verticalization” or earmarking of ODA can also be seen in bilateral assistance programs, such as the U.S.
government’s PEPFAR. 41 The PEPFAR has been driving the rising trend in bilateral assistance for
HIV/AIDS among DAC donors. 42
Vertical funds may lead to an increase in the importance of the specific interventions they support in theoverall financing for a given country. For example, GFATM has increased the weight of infectious disease
control in total aid for the health sector, particularly in Sub-Saharan Africa (see chart below).
Aid for Infectious Disease Control (US$ million at 2004 prices, 2005)
1,109

25% of total ODA for health

36% of total ODA for health

695

615
585

239

227

73

SSA

79

61
16

South andCentral Asia

22
East Asia

40
3-

Middle East-

North Africa

including GFATM

27

6

-

LAC

Low Income

Middle incomeAllexcluding GFATM

The effectiveness and the sustainability of global programs will ultimately rest on the presence ofcomplementary sector-level and country-level policies. As noted in the 2006 Global Monitoring Report (p.
78), “global funds need to support country-led strategies and priorities (…)”. A recent joint DAC-WorldBank workshop (Paris, December 5, 2006) concluded that a “mutually reinforcing approach” between
global programs and the country-based aid delivery model should be developed, focusing on
complementarities and strengthening the alignment of “vertical” aid with country programs.

41
42

President's Emergency Plan for AIDS Relief.
See Gottret and Schieber (2006), op. cit., p. 135. According to the PEPFAR website(www.pepfar.gov), “the U.S. President's Emergency Plan for AIDS Relief (Emergency Plan/PEPFAR)
is the largest commitment ever by any nation for an international health initiative dedicated to a single
disease -- a five-year, $15 billion, multifaceted approach to combating the disease around the world.”

- 19 -

28.
Donor proliferation at the country level has continuously increased over time.
The average number of donors per country nearly tripled over the last half century, risingfrom about 12 in the 1960s to about 33 in the 2001-2005 period. The combination of morebilateral donors and of an increasing number of multilateral channels has led to anincreasingly crowded aid scene. 43 Aid channel proliferation at the country level has been
substantial, particularly after the end of the Cold War when the number of countries withover 40 active donors and international organizations grew from zero to thirty-one. 44 The
number of international organizations, funds and programs is now higher than the number ofdeveloping countries they were created to assist.
29.
Multiple aid channels impose an additional strain on already weak
implementation capacities in low-income countries. 45 In fact, “managing aid flows frommany different donors is a huge challenge for recipient countries, since different donors
usually insist on using their own unique processes for initiating, implementing, andmonitoring projects. Recipients can be overwhelmed by requirements for multiple project
audits, environmental assessments, procurement reports, financial statements, and project
updates”. 46
30.
Proliferation of aid channels is particularly pronounced in the health sector. In
fact, more than 100 major organizations are involved in the health sector, a much higher
degree of proliferation than in any other sector. 47 Insufficient clarity of mandates and roles
for the various donor organizations – associated with the earmarking of much such aid –makes it difficult to reconcile with “the development of a holistic approach to health systems
and sustainable financing at the country level.” 48 The effectiveness of increased ODA
financing for health will rest on finding an appropriate balance between providing resources
for disease- and intervention-specific health programs and strengthening health systems. The
Rwanda case (see Box 4) clearly shows that work on health systems and sustainablefinancing requires a substantial increase in coordination and harmonization in the healthsector. This needs to be done in a manner that enhances inter-sectorality and country focus,
while strengthening recipient country leadership and ownership of ODA financed efforts in
the health sector.

43

44

45

46

47

48

Available data do not indicate that donor proliferation has been particularly more severe in IDAeligible countries.
The year of the start of donor operations in a particular country has been made equal to the year wheneach donor reported its first disbursement to DAC. While this is the best available data, donors may
have started operations earlier without reporting it to DAC, while some non DAC donors (e.g., China,
India) do not report data on their activities to DAC and therefore are not included.
See Knack, S. and A. Rahman (2004). “Donor Fragmentation and Bureaucratic Quality in Aid
Recipients”. World Bank Policy Research Working Paper 3186, January. The authors show that aid
fragmentation across donors could be taxing on the bureaucratic quality of recipient countries (withcausation running from fragmentation to bureaucratic quality). See also Box 1 in this paper.
Radelet, S. (2006). “A Primer on Foreign Aid”. Center for Global Development Working Paper, No.
92, July, p. 15.
This figure includes private donors, but not NGOs. Schieber, G., L. Fleisher, and P. Gottret (2006).
“Getting Real on Health Financing”. Finance and Development, Vol. 43, No. 4, December, p. 8.
Schieber, G., L. Fleisher, and P. Gottret (2006), op. cit., p. 7.

- 20 -

Box 4. Health Sector Financing and Public Spending: The Case of Rwanda
The health sector in Rwanda has received increased funding both from donors and the State budget. As
noted in a recent report prepared by the government of Rwanda, the health sector share of public
expenditure quadrupled over the last decade: the health sector accounted in 2005 for about 10 percent
of government spending – up from 2.5 percent in 1998.1/ In addition, health sector interventions(including HIV/AIDS-related interventions, which DAC classifies under "Population Programmes"
rather than health) received 14.5 percent of total ODA and 21.5 percent of sector allocable ODA to
Rwanda in the period 2001-2005. In 2004, donor grants represented about half of total government
spending in Rwanda, but this figure would actually underestimate the importance of foreign aid in
Rwanda because of off-budget funding, especially in the health sector.
Rwanda’s experience highlights the fundamental problems with the ways in which aid for health isdelivered. A recent review of development assistance for health (DAH) to Rwanda documented threemajor issues the government faces in making sure resources translate into results.
The first is the challenge of achieving policy coherence – and even basic fiscal monitoring – given thefact that only 14 percent of total donor support for health is channeled through the Rwandan Ministryof Health and another 12 percent by local governments or health districts. The remaining 75 percent ofdonor aid goes directly to NGOs or is directly managed by the donors through their own projects (seeTable below).
Who Spends Donor Aid for Health in Rwanda?
Financing Agent
Percentage of Donor Aid
Central Government
14.3
NGOs
54.8
Development Partner Direct Management
19.0
Direct to Local Government or Health District
11.9
Total
100.0
Source: MINISANTE, National Health Accounts, April 2006
A second issue is misalignment of funding in relation the country’s burden of disease and withgovernment priorities as established in the country’s own health strategy: $46 million of its current
assistance is earmarked for HIV/AIDS, $18 million for malaria, and only $1million for the integrated
management of childhood illnesses (IMCI) (see chart below). Rwanda has a 3 percent HIV/AIDS
prevalence rate and despite progress, infant mortality rate remains high at 118 per 1000 and maternalmortality at 1,400 per 100,000. The Rwanda health strategy calls for improving the health system andincentives therein in order to improve access to the population to essential health services.
Donor assistance for health, Rwanda
Rwanda Donor Funding for Health, 2005
50

Millions ($)

40
30
20
10
0
HIV/AIDS

Malaria

IMCI

Objective

A third issue is volatility and the absence of long term commitments: much of the assistance to
Rwanda, like other countries, reflects annual or biannual commitments, with the notable exception ofbilateral aid from the UK. This leads to substantial variations in the level of funding from year to year,
and inhibits long-term planning. In two areas in particular – national decisions to scale up healthservice provision by training and hiring more doctors and nurses, and the increase in the number ofpatients on long-term anti-retroviral (ARV) treatment – Rwanda incurs major risks of sustainability.

- 21 -

Box 4 (cont’d)
The Rwanda case provides a clear illustration of the importance of a multi-sector approach even for
attaining health outcomes. Rwanda is a country with important needs in terms of roads, water,
sanitation, education and others. The aforementioned report prepared by the Rwandan authorities
states that “spending on health has increased markedly in recent years (...). However, infrastructure andagriculture have been relatively neglected. Major investments in the road network are needed tosupport economic growth and poverty reduction. Major investments are needed in energy and in waterand sanitation.”2/ Such multi-sector investments are also important determinants of health outcomes.
______________________
1/ Republic of Rwanda (2006). Scaling Up to Achieve the Health MDGs in Rwanda. A Background
Study for the High-Level Forum Meeting in Tunis, June 12-13, 2006. Prepared by the Ministry of
Finance and Economic Planning and the Ministry of Health.
2/ Op. cit., p. 21.

IV. FRAGMENTATION OF OFFICIAL DEVELOPMENT ASSISTANCE

31.
The proliferation of aid channels has been combined with fragmented aid. ODA
fragmentation can be damaging to the effectiveness of ODA, particularly in recipient
countries with low institutional capacity, as it may increase the transaction costs of aid.
Fragmentation is manifested in different forms, such as the number of donor-funded
activities and the financial size of aid commitments and the dispersion of small-scale freestanding technical assistance as a modality (instrument) of aid delivery (see also discussion
in Box 2). This Section briefly describes ODA fragmentation trends and the transaction
costs they engender (subsection A) and how these issues are being addressed in the context
of the Paris Declaration on Aid Effectiveness.
A.

Aid Fragmentation and Associated Costs

32.
The number of donor-funded activities is large – particularly in the social
sectors – and the average financial size of aid interventions/activities is small. The
average size of donor funded activities in developing countries is about $1.5 million and total
number of interventions/activities has reached almost 60,000 (see Chart 10). 49 The social
sectors (including health and education) account for 48 percent of all activities recorded in
the Creditor Reporting System for 2004. This average size of donor activity does not change
substantially across sectors or across income groups except for infrastructure projects (about
3 times the average size), general budget support (13 times) and debt relief (16 times). 50

49

50

In general, a "transaction" signifies allocation of funds to a specific activity (project or programme) ina given sector in a given recipient country. However, to improve the accuracy of CRS-based statistics,
donors sometimes choose to compile CRS reports at a finer level, in which case a "transaction"
represents a component of an activity. But there are also cases where it is preferable to report at amore aggregated level. A "transaction" can thus be the sum of several activities.
It is difficult to verify whether this situation has deteriorated over time as part of the growth incommitments may be a result of improved reporting from some DAC members.

- 22 -

Chart 10. Number and Average Size of Donor Activities included in the CRS Database(US$ million, 2004 prices)

Source: CRS Online (Table 1)

33.
Fragmentation is reinforced by the fact that the majority of aid activities
allocated by modality is for free standing technical assistance. 51 The level reached by
2004 (i.e., over 20,000 free standing TA activities) was equivalent, on average, to almost one
free standing TA activity – normally of very limited financial size – started each working
day in each developing country. As noted in the 2006 Global Monitoring Report 52 ,“technical cooperation is often criticized as being excessively costly because of the high costof international experts, as exacerbating the problem of brain drain by training the best andbrightest but not being able to retain them, and as being too fragmented and uncoordinated.”
34.
Fragmentation seems to be higher the lower is the institutional capacity ofrecipient countries. This is suggested by Table 4 below, which links the public sector
management capacity to selected features of donor activities. Where implementation
capacity is very low, donors tend to finance a large number of small activities in a relatively
reduced number of sectors. 53 As government capacity becomes higher, donors seem more
willing to support larger projects in more sub-sectors and to increase the overall amount of
aid resources to the country, as measured by commitments per capita.

51"Activities financed by a donor country whose primary purpose is to augment the level of knowledge,
skills, technical know-how or productive aptitudes of the population of developing countries, i.e.,
increasing their stock of human intellectual capital, or their capacity for more effective use of their
existing factor endowment.” From DAC Directives.

52

IMF and World Bank (2006). Global Monitoring Report, pp. 97-98, fn. 17.
The figures in Table 4 do not control for the size or income levels of recipient countries.

53

- 23 -

Table 4. -Government Capacity and Donor Fragmentation in Low Income Countries (2004) 54

In each low income country:
No. ofNo. ofAverage sizetransactions subsectorsof CRS
recorded inwhere
activities
CRS
active(US$ million)

Government Capacity

IDA IRAI
RatingNo. ofdonorsreportingto CRS

Very low

Up to 2.5

23

427

77

1.1

29.6

11

Low

2.6-3.0

23

300

78

1.5

42.9

15

Medium

3.1-3.5

25

502

97

1.8

65.7

19

High

>3.5

24

454

95

2.0

70.0

7

35.
Transaction costs of ODA affect both
donors and recipients. 55 In fact, “donors,
recipients and independent observers all agree
that the system is too complicated and imposes
high transaction costs on all parties”. Suchcosts reflect a rising number of aid channels anddonor
activities/interventions;progressive
earmarking of funding through multilateral andbilateral channels; and widespread use of
uncoordinated technical assistance. While there
is ample anecdotal evidence of the increase oftransaction costs caused by aid fragmentationand donor proliferation, they have not beensystematically quantified (see Box 5).

ODA
Commitments
per capita
(US$)

No of
countries

Box 5 -Examples of Aid
Transaction Costs in Tanzania
A large share of aid to Tanzania isthrough more than 700 projects
managedby
56
parallelimplementation units. Half of alltechnical assistance provided to thecountry is not coordinated with the
Tanzanian government.
Tanzania
received 541 donor missions during
2005 of which only 17 percent
involved more than one donor.
Source: DAC, Progress report on the 2006
survey on monitoring the Paris Declaration .

36.
From the recipient countries’ perspective, transaction costs are directly andindirectly associated with the administrative burden placed on them. 56 Acharya et al.
(2006, op. cit.) distinguish between direct and indirect transaction costs. Direct costs referto the diversion of scarce resources in recipient countries – notably the time and attentionof politicians and government officials – away from domestic priorities in order to attend to
demands associated with managing aid-related activities. Such costs are especially relevantin situations where aid is subdivided into many small “packets” with their own managerial
and reporting requirements. Indirect costs result from the impact of aid proliferation andfragmentation on the incentive systems in recipient countries’ government bureaucracies.
An example of such indirect costs is when donor-financed project implementation units
lead to “brain drain” from line ministries where managerial skills are in short supply.

54
55
56

See discussion in footnote 49.
In Burall, S. and S. Maxwell, with A.R. Menocal (2006), op. cit., p. 1.
There is a small but growing literature on the costs created by aid proliferation and fragmentation.
Recent examples include: Easterly, W. (2002). “The Cartel of Good Intentions: The Problem of
Bureaucracy in Foreig Aid”. Journal of Policy Reform, Vol. 5 (4); Djankov, S., J.G. Montalvo, and M.
Reynal-Querol (2005). “The Effectiveness of Foreign Aid in a Donor Fragmented World”. World
Bank, Washington, D.C.; T. Harford and M. Klein (2005). “The Market for Aid”, Public Policy for thePrivate Sector, Note No. 293, June; Acharya, A., A. De Lima and M. Moore (2006). “Proliferation andFragmentation: Transactions Costs and the Value of Aid”. Journal of Development Studies, Vol. 42,
No. 1; and Roodman, D. (2006). “Aid Proliferation and Absorptive Capacity”. Center for Global
Development Working Paper. No. 75, January.

- 24 -B.

The Paris Declaration Agenda

37.
The Paris Declaration on Aid Effectiveness is a significant step forward
towards addressing the complexities of the existing aid architecture. 57 Signed on
March 2, 2005 by 35 donor countries, 26 multilateral donors, 56 recipient countries, and14 civil society observers, the Declaration put forward an agenda supported by a broad
spectrum of development actors. As noted in the 2006 Global Monitoring Report, “adistinct feature of the Paris Declaration is a mutual commitment undertaken by partner[recipient] countries and donor countries to an international monitoring process.” 58
38.
The Paris Declaration is based on the key principles of ownership, alignment,
harmonization, managing for results, and mutual accountability. These principles
underlie the partnership commitments between recipient or partner countries and thedonor countries, as follows: 59¾ Ownership. “Partner countries exercise effective leadership over theirdevelopment policies and strategies, and co-ordinate development actions.”¾ Alignment. “Donors base their overall support on partner countries’ national

development strategies, institutions and procedures.”¾ Harmonization. “Donors’ actions are more harmonized, transparent andcollectively effective.”¾ Managing for Results. “Managing resources and improving decision-making forresults”.
¾ Mutual Accountability. “Donors and partners are accountable for development

results”.
39.
The five principles of the Paris Declaration are translated into 12
monitorable global targets for 2010. On the side of recipient or partner countries, thesetargets emphasize the importance of operational development strategies and reliable
procurement and public financial management systems. On the side of donor countries,
the targets aim inter alia at aligning aid flows to recipients’ national priorities,
strengthening recipient country capacity, increasing predictability of aid, increasing the
proportion of untied aid, using common arrangements or procedures, and sharing
analysis. To ensure mutual accountability, all partner countries should have mutual
assessment reviews by 2010.
40.
Some of the Paris Declaration targets are directly aimed at addressing aid
fragmentation. They include: (i) 50 percent of technical co-operation flows should be
implemented through coordinated programs consistent with national development
strategies; and (ii) 66 percent of aid flows should be provided in the context of program57

58
59

See Paris Declaration on Aid Effectiveness. Ownership, Harmonisation, Alignment, Results andMutual Accountability. It was signed on March 2, 2005 by ministers of donor and recipient countries
responsible for promoting development as well as by heads of multilateral and bilateral development
institutions.
IMF and World Bank (2006). Global Monitoring Report, p. 79.
Definitions extracted from Paris Declaration, op. cit.

- 25 -

based approaches. Although progress towards these targets should lead to improvements
in aid fragmentation indicators, the data present in this paper does not yet capture theeffects of the Paris Declaration on aid management.
V. CONCLUDING REMARKS41.
ODA has grown steadily over the last decade, and is expected to continue torise as donors have committed to significantly scale-up aid to achieve the MDGs. As
indicated in the 2006 Global Monitoring Report, net ODA disbursements are projected toincrease by 60 percent from US$79 billion in 2004 to US$128 billion in 2010, with halfof it expected to benefit Africa. 60, 61 With the winding down of debt relief, the scaling up
of aid is most likely to occur in other categories of ODA (i.e. core development
programs).
42.
To make effective use of such scaled-up ODA at the country level, a numberof implementation challenges would need to be addressed by donors and recipients.
The most upfront challenges include: (i) achieving complementarity across national,
regional and global development priorities and programs; and (ii) strengthening recipient
countries’ ability to make effective use of potentially scaled-up fast-disbursing ODA suchas budget support.
43.
A platform for achieving complementarity across national, regional andglobal development priorities and programs can be found in the principles andtargets of the Paris Declaration. New ODA sources – emerging donors, regional andglobal programs, private philanthropic aid – bring with them more resources to help
developing countries reach their MDGs. However, uncoordinated priorities and programs
at the national, regional, and global levels – associated with more fragmented delivery –create transaction costs in ODA delivery and reduce the effectiveness of aid. As noted in
the Declaration, “excessive fragmentation of aid at global, country or sector level impairs
aid effectiveness. A pragmatic approach to the division of labour and burden sharing
increases complementarity and can reduce transaction costs.” The Paris Declaration also
puts forward a renewed emphasis on harmonization and alignment as well as on thecentrality of national development strategies as the primary mechanisms to increase
country-level effectiveness of the international aid architecture: “In determining the mosteffective modalities of aid delivery, we will be guided by development strategies andpriorities established by partner countries. Individually and collectively, we will choose
and design appropriate and complementary modalities so as to maximize their combined
effectiveness”.
44.
The country-level effectiveness of a potential scaling-up in fast-disbursing
ODA – added to the increased fiscal space brought about by recent debt relief
initiatives – can be enhanced if country systems are strengthened. If current trends
60

61

Measured in 2004 prices and based on DAC members’ announced commitments. See 2006 Global
Monitoring Report, p. 76: “At their summit in Gleneagles, G-8 leaders committed to increase aid to
Africa by $25 billion a year by 2010, more than doubling assistance to the region. Coupled withpledges by the EU, DAC members have also agreed to expand aid to all developing countries by about$50 billion. These promises would raise the average share of ODA to GNI to 0.36 percent in 2010.”
This discussion is based on an extrapolation of previous aid trends and is not meant to be predictive of
future aid flows. Aid flows figures for the 2006-2010 period are not forecasts, but DAC Secretariat
projections based on public announcements by DAC member countries.

- 26 -

persist, the share of fast-disbursing ODA would continue to rise. In low-income countries
without robust fiduciary systems, budget support scale-up and the effective use ofadditional funds retained by countries due to debt relief will need to be accompanied byincreased capacity to systematically review public expenditure composition and bystrengthened financial management systems. In addition, coordinated donor support iscritical. Under the Paris Declaration, donors committed to “use country systems andprocedures to the maximum extent possible. Where use of country systems is not
feasible, [they committed to] establish additional safeguards and measures in ways thatstrengthen rather than undermine country systems and procedures.”- 27 -

ANNEX I – A BRIEF HISTORY OF THE AID ARCHITECTURE

A.

Introduction

1.
In
the
following
Annex Box 1 - Aid Architectures and Phasesparagraphs, we briefly review theevolution of the elements of the
The phases identified are the following:
aid architecture. The only real
A. Cold War Aid Architecture (1946-1989)
discontinuity over time has been
the end of the Cold War and we
1. Post War Security Aid (1946-1959)
will refer to “Cold War” and2. Economic Development Assistance (1960-1969)
“Post
Cold
War”
aid
3. Commodity Shocks (1970-1979)
architectures.
Within each
4. Structural Adjustment (1980-1989)
architecture, as shown in Annex
B. Post Cold War Aid Architecture (1990-today)Box 1, we can distinguish phases(4 under the Cold War and 2
5. Post War Transition (1990-2000)
under the Post Cold War
6. New Millennium Development (2001-today)architectures)
corresponding
broadly to each decade since 1950. Probably due to the UN “Development Decades”
started in the 1960s, the beginning of a new decade (and even more of a new century anda new millennium) has always marked a change (at least in emphasis) on the aid scene.

B.
1.

Aid Institutions

Donor Countries

2.
During the Post War Security phase, most aid (88%), according to aggregate DAC
data at current prices, came from the United States (58%), France (22%), and the United
Kingdom (8%). France had the largest foreign aid program in relative terms. In the early
1960s a major concern was how to share the “aid burden” (a term still used in DAC
tables today) among donors. Canada, Germany, Japan, Sweden, Switzerland, Belgium,
Denmark, Norway and the Netherlands established aid agencies or ministries in the
1960s. The number of donors grew from 5-6 in the mid 1940s to over 60 today.
3.
A substantial redistribution of the “aid burden” was carried out in the 1970s when,
for the first time, development cooperation budgets met substantial parliamentary
opposition in France and the USA. In the USA in 1971, the Senate, for the first time afterWorld War II, rejected a foreign assistance bill authorizing funds for fiscal years 1972
and 1973. 62
4.
The outcome of the debate was opposite in Northern European Countries and inJapan where aid budgets were substantially increased. In the late 1960s, Sweden,
Netherlands, Norway and Denmark decided to increase their aid above 0.7 of GNI, alevel all of them crossed by the mid to late 1970s. In 1978, Japan launched its first"doubling-of-ODA" plan. Japan became the second largest DAC donor by 1984 and thelargest by 1989.
62

From http://www.usaid.gov/about_usaid/usaidhist.html.

- 28 -

5.
As a result the relative importance of the United States, France and the United
Kingdom over total net ODA declined substantially in the 1970s and 1980s and has now
stabilized at slightly over a third of total net flows.
6.
Overall, DAC donors’ share of total ODA was at its lowest in the 1970s when non
DAC donors accounted for about a third of total ODA. Historically, CMEA (the former
Soviet bloc) accounted for 10% of total ODA till the end of the Cold War. ODA from
Arab countries reached a peak of 30% of total aid by 1978, with occasional peaks after
the second oil shock and the first Gulf War. Since the mid 1990s, DAC donors haveaccounted for 95% of all ODA flows. 63
7.
“New” donors have emerged since the mid 1990s or re-emerged as in the case of
the East European countries that have joined the European Union. The emergence of non
DAC donors has been even more evident in humanitarian aid. In response to the Indian
Ocean tsunami in early 2005, for example, 70 non DAC donors responded with pledgesof support. A recent ODI study 64 found that non-DAC donors accounted for up to 12%
of official humanitarian financing in the period 1999-2004 (based on data from OCHA’s
Financial Tracking System), focused their efforts in a few countries (i.e., Afghanistan,Iraq, North Korea and the occupied Palestinian Territories), and preferred bilateral aid
over multilateral routes.
8.
At the same time, while the number of donors has increased, some are operating
in a more unified way, as is the case for the 27 members of the European Union. One of
the most important developments after the fall of the Berlin wall was in fact the Treaty ofMaastricht putting development cooperation on equal footing with other community
policies, establishing a strong co-ordination obligation for the Member States and theCommission, and setting clear objectives for EC-managed aid. Over the following 15
years, the process has led to a series of common EU positions at international fora, and acommon EU development policy framework.
9.
The structures managing bilateral aid have also evolved over time and the overall
development cooperation frameworks have become more and more sophisticated. In the
1940s and 1950s only the top three donors provided aid through specialized ministries oragencies: the French Overseas Ministry - Ministère de la France d’Outre-Mer, the British
Colonial Development Corporation and the US Economic Cooperation Agency (ECA) in
charge of the Marshall Plan’s European Recovery Program (ERP). 65 Smaller donors
without dedicated structures like the Netherlands provided multilateral contributions to
UN organizations whose aid was going to colonies in the West Indies and Papua New
Guinea. 66
10.
In the 1960s, most donors established separate, in some cases independent,
development cooperation structures. In 1961 France, the United Kingdom and the UnitedStates of America reorganized their agencies increasing for a while their independence.
63
64
65

66

Manning (2006), op. cit.
Harmer and Cotterrell (2005), op. cit.
It was renamed twice in the 1950s as Mutual Security Agency first and International Cooperation
Agency later.
Paul Hoebink, Poverty Reduction in the Development Cooperation Policy of the Netherlands, onbehalf of the French Ministry of Foreign Affairs, 2002, p. 2.

- 29 -

France was the first country to establish a Ministry for Co-operation to be responsible forassistance to independent, mainly African, developing countries. 67 The United Kingdom
established the Department for Technical Cooperation to “consolidate in one place thetechnical expertise for the colonies that had been spread across several government
departments.” 68 The USA renamed the International Cooperation Agency (ICA) as the
U.S. Agency for International Development (USAID) and put it in charge of theadministration of the entire US bilateral economic assistance. Other nine countries (i.e.,
Canada, Germany, Japan, Sweden, Switzerland, Belgium, Denmark, Norway and theNetherlands) created ministries or agencies to manage their development cooperation
programs between 1960 and 1963. Only Italy, among the major donors of the time, did
not have a dedicated agency or a department for development cooperation. 69
11.
Where created, ministries for cooperation were independent from the Foreign
Ministry to prevent development policies to be subordinated to foreign policy interests.
However, some were not long lived due to the spreading recognition of the importance ofdevelopment cooperation for post-colonial foreign policy.70

2.

International Agencies and Programs

12. In the 1960s, the activism that led to the establishment of many donor agencies orministries on the bilateral front was matched by the creation of an international
development “framework”. The new multilateral arrangements reflected a general sensethat “consortia” of donors 71 would overcome the coordination, and other problems of amultitude of individual aid programs (Rosenstein-Rodan, 1968).

67

68

69

70

71

See Bossuat, G. (2003). “French Development Aid and Co-operation under de Gaulle”, Contemporary
European History, on the history of French Development Aid and Co-operation under de Gaulle.
Barder, O (2005), Reforming Development Assistance: Lessons from the UK Experience, Center for
Global Development, p.7. In 1964, the functions of the Department of Technical Co-operation and theoverseas aid policy functions of the Foreign, Commonwealth Relations and Colonial Offices and ofother government departments were reorganized into the UK Overseas Development Ministry (ODM)
taking over almost the whole responsibility for the aid program formerly handled by several
government departments.
Italy established a Department for Development Co-operation in the Ministry of Foreign Affairs about
15 years later, in 1978.
In 1966, the French aid administration was reorganized and the overall responsibilities passed to the
Ministry of Foreign Affairs. In the United Kingdom, the Overseas Development Ministry was
replaced in 1970 by the Overseas Development Administration (ODA), a functional wing of theForeign and Commonwealth Office, and the functions of the Minister of Overseas Development weretransferred to the Secretary of State for Foreign and Commonwealth Affairs. The independence of the
UK aid management structure was re-established and interrupted several times. In May 1974 theGovernment announced that the ODA was once again to be a separate ministry, as the Ministry ofOverseas Development, under its own minister. However, in November 1979 the ministry again
became the Overseas Development Administration (ODA) as a functional wing of the Foreign andCommonwealth Office. In 1997 the ODA was replaced by an independent Ministry - the Department
for International Development (DFID) - headed by a Secretary of State with cabinet rank.
During the 1950s, donors started operating together through international consortia. The first suchcase was the Colombo Plan ("Council for Technical Co-operation in South and South-East Asia"),established in 1950, which included India, Pakistan and Ceylon as regional members and Australia,
Canada, New Zealand, United States, Japan and the United Kingdom as donor countries. The WorldBank assisted developing countries by assembling international consortia like the India Consortium
created in 1958 with Canada, Germany, Japan, the United Kingdom, and the United States to meet

- 30 -

13.
The International Development Association (IDA) was established in 1960 andradically changed the nature of the World Bank. Through IDA the Bank started its
concessional lending activities. However, IDA had to be replenished periodically and theviews and priorities of shareholding countries started to play a larger role in the Bank’s
activities. 72 In the early 1960s, the Development Assistance Committee (DAC) 73 wascreated as a key forum of major bilateral donors.
14.
By then, the overall subdivision of labor among the multilateral institutions had
become clear. OECD’s DAC would be a forum for information sharing and rule setting
for the more diverse donor community of the 1960s. IDA and the “concessional
windows” of regional banks 74 would provide soft loans for investments in infrastructure
and production. The UN would provide, through UNDP, funding for its many
specialized agencies, programs and funds supporting developing countries on specificissues and launch new development themes through its conferences.
15.
In the 1980s, UNDP’s decision to move towards national execution of UN
projects, significantly changed its relations with UN specialized agencies, funds andprograms that started to raise funds from donors independently through non core
contributions. 75 In the late 1970s, UNDP started a progressive shift from agency tonational execution: the responsibility for the management of UNDP funded projects was
progressively 76 moved from the Specialized Agencies to recipient country’s institutions
and this became the “norm” from the early 1990s. As a reaction to this move, theSpecialized Agencies increased their financial base by “using part of the assessed budget
for operational activities and by soliciting extra-budgetary contributions from donors.” 77
The balance between core and non-core contributions to UN agencies and programs
changed, with the latter - considered as bilateral ODA by DAC - taking real significanceby the mid-1990s.

72

73

74

75

76

77

India’s balance-of-payments crisis and the Pakistan Consortium of 1960 with the same membershipand objectives.
“The establishment of IDA meant the recognition that there was a legitimate need for concessional
assistance and that the Bank could provide this assistance without compromising its strict standards forlending. However, IDA, with its periodic replenishments by member governments, meant that the
Bank had to pay increasing attention to the views and priorities of the parliamentary bodies thatprovided the replenishment funds. Whereas the Bank had previously to consider only the productive
and economic aspects of lending, now the internal politics of the shareholding governments began toplay a larger role in the Bank's activities.” World Bank, profile of its 3rd President, Eugene R. Black(from website).
In 1960, the then Organization for European Economic Co-operation (OEEC) established a
Development Assistance Group (DAG) as a forum for consultations among aid donors on assistance toless-developed countries. One year later, OEEC was renamed Organization for Economic Cooperation and Development (OECD) with the significant addition of “development” to the name and
DAG was renamed Development Assistance Committee (DAC).
Two Regional Development Banks are also established in this period: the African Development Bankin 1964 and the Asian Development Bank in 1966 that join the Inter-American Development Bank
established in 1959.
Towards a Redesign of the UN Development Architecture, DAC Background Paper prepared by the
Belgian Delegation, December 2005, p 2.
A 1994 study by the UN Joint Inspection Unit found that only 15% of projects financed by UNDP
between 1988 and 1993 had been managed by recipient governments.
Towards a Redesign of the UN Development Architecture, DAC Background Paper prepared by the
Belgian Delegation, December 2005, p.2.

- 31 -

16.
While UN Conferences started to draw the public’s attention on specificdevelopment issues, there was an overall increase in the number of UN agencies, funds
and programs after several conferences. “It appears indeed as if the international
community needed new institutional structures as the concrete manifestation of thepolitical determination to take on the new development challenges.”78 They mirrored thetendency among some bilaterals to earmark development funds for specific purposes.
However, unlike the wave of agencies and funds created earlier, the 1970s cohort was notvery successful in terms of funds raised. This led to the creation of only one newdevelopment related organization in the 1980s and to a second attempt in the late 1990s
when donors preferred public-private partnerships to inter-governmental or inter-agency
global programs.
17.
After the end of the Cold War, humanitarian aid and UN Specialized Agencies inthis field started competing for ODA funds. This has also blurred the distinction between
humanitarian and development aid and brought a security dimension to aid.

3.

Civil Society

18.
The 1990s saw a broadening of public support for development cooperation,although few knew about the MDGs or were confident in their achievement. 79
According to a 2004 research by Eurobarometer, for example, one EU citizen out of two
believed it is “very important” to help people in poor countries but only one out of three
believed that their governments had allocated too small a share of their national budgets
to development aid.
19.
The main concern was not so much the level of aid but the confidence in theability of the official sector to achieve results. Over time there has been a decreasing
confidence among EU citizens in their national governments’ ability to help the poor. 80
In parallel to this declining confidence in official aid, there has been a progressive“privatization” of aid itself: about a fifth of all reported official and private aid todeveloping countries has been provided or managed by NGOs and public-private
partnerships.
20.
According to the Johns Hopkins Comparative Nonprofit Sector Project, which has
been monitoring NGO activities in 35 countries, international activities of NGOs in 2004
(largely but not exclusively on development cooperation and humanitarian aid) employed
the full time equivalent of 140,000 staff - probably larger than the total staff of all
bilateral and multilateral donors combined - and generated revenues for US$13 billion
from philanthropy (36%), government contributions (35%) and fees (29%). “The number
and variety of such organizations seem to have grown enormously in recent years.
Indeed, a veritable “global associational revolution” appears to be under way, a massive
upsurge of organized private, voluntary activity in virtually every region of the world—in
the developed countries of North America, Western Europe, and Asia; throughout Central
and Eastern Europe; and in much of the developing world.” 81
78
79

80
81

Ibidem, p 3.
Eurobarometer, Attitudes towards Development Aid, 2005, p. 4.
Ibidem, p. 42.
Salamon, L.M., S.W. Sokolowski and R. List (2003). Global Civil Society: an Overview, The Johns
Hopkins Comparative Nonprofit Sector Project, p.1.

- 32 -C.

Aid Rules and Principles

21.
The rules and principles of aid, which are the other pillar of the aid architecture,
concern five major areas:






1.

the definition of aid
the aid targets: how much aid should be given
the purpose of aid: what is aid’s goal and what should aid be used for in/by
recipient countries
the modalities of aid: in what form should aid be given (e.g., types of aid, terms)
aid management: roles and responsibilities of donors and recipients (e.g., the aid
effectiveness agenda: coordination, alignment, and harmonization)

The Definition of Aid

22.
This apparently theoretical issue has had instead a substantial impact on thevolume of aid. For example, almost a third of the ODA flows recorded in 2005 would
have not been considered ODA in the 1970s and early 1980s.
23.
The current definition of Official Development Assistance (ODA) comprises
grants or loans provided by official agencies (including state and local governments, orby their executive agencies) to developing countries (countries and territories on the DAC
List of Aid Recipients) and to multilateral institutions for flows to developing countries,
each transaction of which meets the following test: (a) it is administered with thepromotion of the economic development and welfare of developing countries as its main
objective; and (b) it is concessional in character and contains a grant element of at least
25 percent (calculated at a rate of discount of 10 percent). In addition to financial flows,
Technical Co-operation is included in aid.
24.
ODA has five elements: (a) the type of flows (grants, loans or technicalcooperation); (b) the source (official sector of donor countries); (c) the recipients (theymust be on the DAC list); (d) the development/welfare purpose of the relatedtransactions; and (e) their concessional character.
25.
The definition and measurement of “aid” had been one of the first tasks of DAC
and a subject of significant controversy among donors, some supporting a very rigorous
definition of “development” and others in favor of considering almost all official flows todeveloping countries as “aid”. The first comprehensive survey of flows of financial
resources to developing countries (then called “countries in course of economic
development”) was published in March 1961, and covered the period 1956-59. It wasthen followed by DAC Annual Reports and time series were collected from 1961
onwards for aggregate flows (DAC data) and from 1973 for country level activities (CRS
data). The definition of ODA was adopted in 1969 and it allowed distinguishingdevelopment assistance from other flows without developmental objectives. Since then,the major changes of the definition of ODA have concerned two aspects: the activities tobe considered as promoting economic development and welfare and the DAC list of aid
recipients. The definition itself was changed only once in 1972, adding a more precise
definition of “grant element” and replacing the previous term “social development” with“welfare”.

- 33 -

26.
The list of activities to be considered as promoting development and welfare has
been widened substantially over time. Inter alia, cost of refugees in donor countries,
imputed costs of students from developing countries, internally paid interest subsidies,promotion of development awareness, and recording of debt forgiveness on military debt
and other non-ODA debt were all added to the list of activities. There is still an ongoingdebate on the inclusion of certain expenditures relating to conflict prevention, peacebuilding and security-related activities.
Annex Chart 1 - Increase of Net ODA due to the Widening of the list of ODA Eligible Activities(1978-2005)

30%

25%

20%

15%

10%

5%

Debt forgiveness on non ODA debt

Administrative costs

Imputed student costs

Interest subsidies

20
05

20
04

20
03

20
02

20
01

20
00

19
99

19
98

19
97

19
96

19
95

19
94

19
93

19
92

19
91

19
90

19
89

19
88

19
87

19
86

19
85

19
84

19
83

19
82

19
81

19
80

19
79

19
78

0%

Promotion of development awarenessSource: DAC Online (Table 1a)27.
As showed in Annex Chart 1, the impact of these changes on the recorded ODA
volume has been substantial in recent years leading to an increase in total ODA of 33% in
2005, particularly due to debt forgiveness on non ODA debt and to donor administrative
costs.
28.
The DAC list of aid recipients was introduced only in 1993, after a long
discussion on a proposal to consider as ODA all aid for all countries which met the DAC
norms of concessionality and development motivation. Since 1961, data had beencollected on most non communist developing countries. 82 From 1989, countries of theformer Eastern Bloc that were below the World Bank threshold for high income countries
started being added to the list. South Africa was added in 1991. From 1993 to 2004, a
second part was added to the DAC list including "more advanced" developing and
82

They included the following recipients: all countries and territories in Africa except South Africa; in
America except the United States and Canada; non-Communist Asian and Oceanic countries except
Australia, Japan and New Zealand; and the following in Europe: Cyprus, Gibraltar, Greece, Malta,
Spain, Turkey and Yugoslavia.

- 34 -

eastern European countries and aid to these countries was recorded as “Official Aid” anddid not count for the achievement of the UN targets of ODA/GNI. As showed in Annex
Chart 2, bilateral ODA to the countries added to the DAC list since 1989 has been
limited, reaching a peak of 15% of all bilateral ODA by 2003.
Annex Chart 2. Bilateral ODA to Countries Added to the DAC List of Aid Recipients Since 1989
(US$ millions, 2004 prices)
70000

60000

50000

40000

30000

20000

10000

0
1989

1990

1991

1992

1993

1994

1995

1996

1997

Old DAC list countries

1998

1999

2000

2001

2002

2003

2004

2005

New DAC list countries

Source: DAC Online (Table 2a)2.

Aid Targets

29.
The idea of a target for aid was introduced by an appeal by the World Council ofChurches of 1958 circulated to all the United Nations Delegations. 83 Annex Chart 3
shows the evolution of the targets for DAC countries and of the debate on them: theearly target of official and private flows to developing countries over GNI 84 and the post1969 ODA/GNI targets, which benefited from the introduction of the ODA concept in
1969.
30.
The ODA/GNI aid target has been missed so far (with some notable exceptions 85 )although the gap has been narrowing in the last few years. The 0.7 target was neverformally adopted, although the target has been debated at UN Conferences for almost halfa century. Nordic European countries had formally adopted the target in the 1970s and1980s and other EU Member States joined them in 2005. There is no theoretical
83

84

85

For a detailed discussion on the history of the “0.7 target” see e.g. DAC in Dates and Clemens, M.A.
and T.J. Moss (2005). “Ghost of 0.7%: Origins and Relevance of the International Aid Target”. Center
for Global Development.
“National Income”, GNP and GNI were used over the year and are used interchangeably here as thedifferences among the actual ratios due to the different choices of denominator are negligible.
The Netherlands, Sweden, Norway, Denmark and Luxembourg have reached and maintained the 0.7%
target.

- 35 -

background to the target: although some studies in the 1960s tried to justify it, the 0.7
target is more related to an assessment of what was politically feasible at the time than toactual developing countries needs.

3.

The Purpose of Aid

31.
Aid was explicitly motivated by the interest of the donor countries till World War
II. During the first phase of the Cold War (1946-1959), foreign aid was initially focusedon reconstruction and later on security. An important feature of aid in the 1950s was the
optimism generated by the success of the Marshall Plan leading to a widespread belief
that “the combination of capital and technical assistance could transform economies in avery short time.” 86 Even at the international level, as discussed in the Jackson Report of1969, while the most important multilateral organizations (i.e., UN, IBRD, IMF, OEEC,
several UN agencies) were being created, there was “little awareness … that the neworganizations would launch operational activities of a development nature on a long-termbasis. Development operations were also relegated to second place by the founders of thevarious specialized agencies created around the same period to encourage international
cooperation of a sectoral kind in areas such as agriculture, education, health and civil
aviation.” 87
32.
The major shift during and even more after the war in US and UK legislation was
the recognition of foreign aid as a tool to be used for the benefit of the recipient. The
main goal of aid was economic development of recipient countries justified by a
combination of moral, political and economic considerations relating to the interests ofdonors. Growth would be generated through technical assistance and capital forinvestments in infrastructure and agriculture (particularly food production).
33.
The 1960s saw the emergence of the concept of “development co-operation” andthe launch of the first UN Development Decade. The focus in the 1960s shifted towards
government-led industrialization through import substitution, nationalization and overall
economic planning (national development plans). While in the 1950s there had been
more space for community based projects based on the “self-help” philosophy (thepurpose of aid as stated in the 1961 DAC Declaration on the Common Effort, was to“help less-developed countries help themselves”), the 1960s saw a much wider role for
the State.

86
87

Barder (2005), op. cit., p. 4.
Bertrand, D (2005), Some Measures to Improve Overall Performance of the United Nations System at
the Country Level. Part I: A Short History of United Nations Reform in Development. Joint Inspection
Unit, p. 3.

- 36 -

Annex Chart 3. Official and Private Flows and ODA as a Share of GNI in DAC Countries and Major Events on Aid Targets (1960-2005)

1.40%

1958: World Council ofChurches
1.20% calls for a 1%
targetOfficial and Private Flows over GNI for DAC countries

1960: UN 1st Development Decade:"hope" that the 1% target ofinternational assistance and capital canbe achieved

Target for Official and Private Flows

1.00%

1968: UNCTAD discusses
a goal for Official Flowsequal to 0.75%

0.80%Target for ODA

0.60%
1969: Pearson
Commission recommends
an ODA/GNI target of
0.7% by 1975

ODA over GNI for DAC countries

1990: UN 4th Development
Decade: "donor countries
should, in the 1990s, implement
such undertakings as they havemade to reach or surpass” the
0.7% aid target

19
96

19
94

19
92

19
90

19
88

19
86

19
84

19
82

19
80

19
78

19
76

19
74

19
72

19
70

19
68

19
66

19
64

19
62

19
60

0.00%

20
04

2002: Monterrey Conference: "weurge developed countries that havenot done so to make concrete efforts
toward the target of 0.7"

20
02

1980: UN 3rd Development
Decade: "rapid andsubstantial increase will bemade" to surpass the agreed
international target of 0.7 per
cent"

20
00

1970: UN 2nd Development
Decade: "best efforts" toreach an ODA/GNI target of
0.7% by 1975

0.20%

19
98

0.40%

- 37 34.
The 1970s witnessed a crisis of this model. The 1970s saw a broadening of thedebate – started in the mid 1960s - on the rationale for foreign aid, which led to
substantial legislative changes in several countries. There was a decline in the volume
and flexibility of aid among some of the largest donors (e.g., USA, France, UK) and asubstantial increase of the volume of aid among others (e.g., Nordic European countries,
and Japan). In the USA, “assistance for the poorest sectors of developing nations ("basic
human needs") became the central thrust of the reform. To extend assistance directly tothe recipient nation's population, Congress replaced the old categories of technicalassistance grants and development loans with new functional categories aimed at specificproblems such as agriculture, family planning, and education. The aim of bilateraldevelopment aid was to concentrate on sharing American technical expertise andcommodities to meet development problems, rather than relying on large-scale transfersof money and capital goods, or financing of infrastructure. The structure of the [Foreign
Assistance Act] remains today pretty much the way it was following these 1973
amendments.” 88
35.
Many donors saw the objective of a more broad based economic growth “aimed atincreasing the productive income of the poor.”89 The “basic human needs” approach
focused the attention of donors on assistance to the poorest sections of the population indeveloping countries 90 and on the need for “local cost financing.” As most poor lived inrural areas, rural development became a particular area of attention and the State was
supplemented through donor projects in “extending” its services to rural areas. The
concept of “Least Developed Countries” was also introduced by the UN in 1971. Moretraditional support for productive sectors continued (with the introduction of “mixed
credits” by key donors) but more attention to the social sectors started to be paid. There
were also some initial attempts towards the promotion of private investment and to link
aid to donor exports 91 and an overall proliferation of implementation units outside
government.
36.
The financial crises of the 1980s moved the attention beyond capital accumulation
and basic human needs of developing countries to their policies, starting the lending for“structural adjustment”. The importance of policies for development was recognized as
one of the main lessons of the DAC Review of 25 years of ODA carried out in 1985:“one of the compelling lessons of experience is that aid can only be as effective as thepolicy, economic and administrative environment in which it operates.” The “integrationof developing countries in the world economy” became an additional goal of
88
89

90
91

From http://www.usaid.gov/about_usaid/usaidhist.html
DAC High Level Meeting of March 1977, Statement on Development Co-operation for Economic
Growth and Meeting Basic Human Needs.
DAC (1976), How to reach the poorest in poor countries.
In the UK the Aid and Trade Provision (ATP), allowing the combination of aid with non concessional
export credits both tied to the purchase of British goods and services, was introduced in 1977. The
Conservative government further enhanced the ATP provision, giving “greater weight in the allocationof our aid to political, industrial and commercial objectives alongside our basic developmental
objectives.”

- 38 development cooperation, together with the growing adoption of outward looking,market-oriented development strategies in developing countries.
37.
In the early 1990s the goal of development cooperation shifted to sustainable
development with a greater attention paid to environmental concerns, to broader
participation by beneficiaries and progressively to the institutions of developing
countries, with more funds going to “cross-cutting” issues and to “capacity building”. A
major restating of the ultimate objective of aid was carried out in the 1990s. While it waspreviously accepted that economic growth will ultimately “trickle down” to the poor,
more and more evidence pointed to the contrary. An international consensus was reachedby the 1990s that the goal of aid included sustainable development, poverty reduction,
integration in the world economy and the building of viable economies and societies 92 .
Developing countries institutions and policies were now seen as key to progress in thisarea (Assessing Aid, 1998). The end of the Cold War allowed the tackling of issues
previously neglected like “good governance” (formally addressed by DAC in 1992 forthe first time). The role of the State was re-discussed and donors started supporting civil
reform programs, private sector development and privatization.
38.
The consensus was slowly translated into policy and law by several countries andled to the Millennium Development Goals by 2001. The eight MDG range from halving
extreme poverty to halting the spread of HIV/AIDS and providing universal primaryeducation, all by the target date of 2015 and now “form a blueprint agreed to by all theworld’s countries and all the world’s leading development institutions.” 93

4.

Aid Modalities

39.
The donor community has been focusing its attention on aid terms since the earlydays of DAC. The 1961 Resolution on the Common Aid Effort called for grants or loans“on favorable terms” including long maturities. In 1962, the DAC’s chairman called for“joint efforts to reverse the trend towards more tying of aid”. In 1963, DAC adopted a
specific “Resolution on the Terms and Conditions of Aid” recommending “appropriate
terms” for aid. In 1965, a new recommendation clarified objectives on financial terms
and suggested measures for aid untying.
40.
There was wide support among donors for a progressive softening of aid terms
and an agreement was reached early on, in the 1970s. By 1972, an agreement had beenreached within DAC of a target of an 84% grant element in aid with special conditions
for Least Developed Countries, a concept introduced by the UN only one year earlier.
The final terms - agreed in 1978 - included a grant element of ODA commitments of 86%(90% for LDCs). The grant element of ODA has been above 80% since 1992 and mostly
above 90% since 2000.

92
93

See e.g. the 1995 DAC Recommendation “Development Partnerships in the New Global Context”.
http://www.un.org/millenniumgoals/

- 39 41. Progress on untying proved instead difficult till the end of the Cold War, while real
progress was made since 1991, although a large share of ODA remains tied, at least
partially. The current share of untied ODA of DAC members, all items considered, is
42% (68% in the case of LDCs). Not surprisingly the debate on untying was particularly
strong in the 1970s, when public support for development cooperation was widelydifferent among donor countries. Where public support was low, tying was seen as an
essential rationale for providing aid, while where public support for aid was strong, tying
increased the risk of using aid to gain commercial advantage to the detriment ofdevelopment effectiveness. It proved impossible to reach any agreement, except on theuntying of multilateral aid (1973). A major breakthrough was finally achieved in 1987
when DAC adopted the Guiding Principles for Associated Financing and Tied andPartially Untied Official Development Assistance in parallel with strengthened provisions
for transparency and discipline for export credits and tied aid. The policy was revised in1991 and in 2001 when DAC issued a recommendation for the complete untying of
ODA 94 to LDCs, with the exception of small contracts (exception removed in 2006).

5.

Aid Managementa)

Aid Coordination

42.
Aid coordination has been debated among donors for almost 45 years. The 1962
DAC Chairman’s Report called for “better coordination of aid programs” and in the same
year the first donor consultative group was called to “coordinate development assistance”
to Nigeria. In 1966, DAC issued specific guidelines for the coordination of technicalassistance. In 1983, DAC focused the attention on the need to improve coordination “atthe country level” and by 1984 a general agreement was reached to increase the numberof consultative groups, strengthen their aid coordination functions and to promote local
arrangements for coordination. The 1985 DAC Review of 25 years of ODA concluded
that “donor competition for attractive projects” remained a problem due to “bothadministrative constraints and donor inhibitions resulting from political or commercial
considerations.” By 1986, the DAC High Level Meeting recognized that the“responsibility for aid co-ordination lies with each recipient government”. In 1989 theReport on Development Cooperation in the 1990s recognized that donor coordination
should be based on comparative advantage: “National development assistance efforts
must be seen as part of a larger international effort. No individual donor country has an
aid program large enough in any single developing country to achieve significant
development objectives on its own. Staff constraints are such that effective aid
management imperatively calls for increased donor co-operation based on somespecialization.”b)

Aid Alignment

43.
The 1985 DAC review of 25 years of ODA found that “greater emphasis should
be given to ensuring the commitment of recipients' executing agencies and the motivationof local target groups through their active involvement in selection, design and
94

With the exception of technical cooperation and food aid.

- 40 implementation.” In 1986, DAC recognized “the need for developing countries toprepare, with the assistance of the World Bank, IMF and UNDP, effective development
strategies and programs which can serve as a basis for aid co-ordination.” The need foraligning aid strategies to recipient countries one was recognized by 1989 in the Report on
Development Cooperation in the 1990s: “donor countries will be able to assist developing
countries effectively only if they relate their national aid activities to concerted action in
support of effective programs and policies of the assisted countries.” In 1995, the DAC
High Level Meeting adopted a statement calling for “the principal responsibility of eachdeveloping country for its own development and the need for public participation.” In1996 “local ownership” became one of the cornerstones of the new development strategy
adopted by DAC and by 1997 DAC recommended that member countries should“promote a leadership role for developing countries.”
44.
The most important development in aligning donor and partner countries’
strategies has been the introduction of the Poverty Reduction Strategy Papers (PRSP) in
1999. As stated in the Joint World Bank /IMF 2005 PRS Review, “In December 1999,
the Boards of the World Bank and the International Monetary Fund introduced a new
approach to their relations with low-income countries. The approach—centered aroundthe development and implementation of poverty reduction strategies (PRSs)—was inmany ways novel. It made the successful preparation of a nationally owned poverty
reduction strategy a precondition for access to debt relief and concessional financing
from both institutions. These strategies were expected to be poverty-focused, countrydriven, results-oriented, and comprehensive. They were also expected to serve as aframework for better coordination of development assistance among other development
partners. The approach called for a fundamental change in the nature of the relationshipbetween developing countries and donors. It sought to empower governments to set theirdevelopment priorities and pushed donors to align their assistance around a country’s
priorities rather than their own.”
45.
The challenge of alignment lies also in the process of strategy formulation by
donors. Country programs or plans were introduced in the late 1960s and early 1970s by
the World Bank, the European Commission and a few donors to see how the various
projects to be undertaken in each country would fit together. These early plans were
replaced in the 1980s by country strategies which became widespread among donors by
the 1990s when the country replaced the project as the unit of account of development
and the country cycle replaced the project cycle 95 . In the 2000s the focus shifted again:from donor strategies for a country to a plan to assist each country to implement its own
strategy. DFID’s Country Assistance Plans, for example, “are different from Country
Strategy Papers as they start from the basis of the Country’s own Poverty Strategy andassess to what extent it is appropriate for DFID to support this, rather than starting from
DFID’s analysis of what the country should do to reduce poverty.” 969596“The country program cycle has replaced the project cycle as the Bank’s most important businessmodel, just as the country has replaced the project as the critical unit of account in development.”
Managing for Development Results in the World Bank – Progress Report, 2004, p. 4.
DFID CAP Guidance, p.1.

- 41 -c)

Aid Harmonization46.
A sustained effort towards greater harmonization of donor practices has been
another new feature of the Post-Cold War Architecture. The process, started in Rome in2003, culminated in the Paris Declaration of 2005 that, for the first time, set a series of
specific, time bound and measurable, indicators of progress towards greater
harmonization, alignment and coordination. (see subsection IV.B of the main text for a
discussion of the Paris Declaration Agenda).

- 42 -

ANNEX II - LIST OF BILATERAL DONORS

A. DAC Members
1) Australia
2) Austria
3) Belgium4) Canada5) Denmark6) Finland
7) France8) Germany9) Greece10) Ireland11) Italy

12)
13)
14)
15)
16)
17)
18)
19)
20)
21)
22)

Japan
Luxembourg
Netherlands
New Zealand
NorwayPortugal
Spain
SwedenSwitzerland
United Kingdom
United States

5)
6)
7)
8)

PolandSlovak RepublicTurkeyMexico

5)
6)
7)
8)

Lithuania
Malta
Romania
Slovenia

B. OECD Members that are not part of DAC
1)
2)
3)
4)

Czech RepublicHungary
IcelandKorea

C. EU Members that are not part of OECD
1)
2)
3)
4)

Bulgaria
CyprusEstonia
LatviaD. Other non-DAC donors
1)
2)
3)
4)
5)
6)
7)
8)
9)

BrazilChina
Chinese Taipei
India
Indonesia
Iran
Israel
KuwaitLybia10) Malaysia
11) Pakistan
12) Russian Federation
13) Saudi Arabia
14) Singapore
15) South Africa16) Thailand
17) United Arab Emirates18) Venezuela

- 43 -

ANNEX III – LIST OF MAIN INTERNATIONAL DEVELOPMENT ORGANIZATIONS
No. Acronym

Name

Type

Year
established

DAC
SectorConvention to Combat Desertification

UN Program

1997

410

2 DLCO-EA Desert Locust Control Organisation for Eastern Africa

International
Organisation

1962

410

3 ECA

Economic Commission for Africa

UN Commission

1958

multi

4 ECLAC

Economic Commission for Latin America and the Caribbean

UN Commission

1948

multi

5 ESCAP

Economic and Social Commission for Asia and the Pacific

UN Commission

1947

multi

6 ESCWA

Economic and Social Commission for Western Asia

UN Commission

1974

multi

7 IAEA

International Atomic Energy Agency (voluntary contributions only)

UN Specialised
Agency1957

230

8 IFADInternational Fund for Agricultural Development

UN Fund1977

311

9 INSTRAW International Research and Training Institute for the Advancement of UN Research
Women
and Training
Institute

1976

420

10 UNAIDS

Joint UN Programme on HIV/AIDSUN Program

1995

120

11 UNCDF

United Nations Capital Development FundUN Fund1966

430

12 UNCTAD United Nations Conference on Trade and Development

UN Program

1964

331

13 UNDP

United Nations Development Programme

UN Program

1965

multi

14 UNDRO

Office of the United Nations Disaster Relief Co-ordinator

UN Program

1971

700

15 UNEP

United Nations Environment Programme

UN Program

1972

410

16 UNETPS
A

United Nations Educational and Training Programme for Southern
AfricaUN Program

1967

110

UN Program

1991

410

1 CCD

17 UNFCCC United Nations Framework Convention on Climate Change
18 UNFPA

United Nations Population FundUN Fund

1967

130

19 UN
HabitatUnited Nations Human Settlements Programme

UN Program

1978

160

20 UNHCR

Office of the United Nations High Commissioner for Refugees

UN Program

1950

700

21 UNICEF

United Nations Children's FundUN Fund1946

100

22 UNIDO

United Nations Industrial Development Organisation

UN Specialised
Agency1966

321

23 UNIFEM

United Nations Development Fund for Women

UN Fund1976

420

24 UNITAR

United Nations Institute for Training and Research

UN Research
and Training
Institute

1965

110

25 UNMAS

United Nations Mine Action Service

UN Program

1997

200

- 44 No. Acronym

Name

Type

Year
established

DAC
Sector

26 UNOCHA United Nations Office for the Co-ordination of Humanitarian Affairs

UN Office

1991

700

27 UNODC

United Nations Office on Drugs and Crime

UN Office

1997

430

28 UNRISD

United Nations Research Institute for Social Development

UN Research
and Training
Institute

1963

150

29 UNRWA

United Nations Relief and Works Agency

UN Specialised
Agency1949

100

30 UNSC

United Nations System Staff College

UN Research
and Training
Institute

1996

150

31 UNSCN

United Nations System Standing Committee on Nutrition

UN Commission

1977

120

32 UNSIA

United Nations System-Wide Special Initiative on Africa

UN Program

1996

multi

33 UNU

United Nations University (including Endowment Fund)

UN Research
and Training
Institute

1973

700

34 UNV

United Nations Volunteers

UN Program

1970

multi

35 UNVFD

United Nations Voluntary Fund on Disability

UN Fund1981

430

36 UNVFTC

United Nations Voluntary Fund for Technical Co-operation in the Field UN Fundof Human Rights

1987

700

37 UNVFVT

United Nations Voluntary Fund for Victims of Torture

UN Fund

1981

700

38 WFCWorld Food Council

UN Program

1974

311

39 WFPWorld Food Programme

UN Program

1962

700

40 WPCWorld Population Conference

UN Program

1986

130

41 FAO

Food and Agriculture Organisation

UN Specialised
Agency1945

311

42 ILOInternational Labour Organisation

UN Specialised
Agency

1945

multi

43 ITUInternational Telecommunications Union

UN Specialised
Agency1865

220

44 UNESCO United Nations Educational, Scientific and Cultural Organisation

UN Specialised
Agency

1945

multi

45 UNO

United Nations Organisation

UN Main

1945

multi

46 UNPKO

United Nations Peacekeeping Operations

UN Office

1945

700

47 UPU

Universal Postal Union

UN Specialised
Agency1874

220

48 WHOWorld Health Organisation

UN Specialised
Agency1948

120

49 WIPOWorld Intellectual Property Organisation

UN Specialised
Agency

1974

multi

- 45 No. Acronym

Name

Type

Year
established

DAC
Sector

50 WMOWorld Meteorological Organisation

UN Specialised
Agency

1951

multi

51 EC

European Commission

Multilateral
Oganisation

1957

multi

52 IMF –ENDAInternational Monetary Fund - Subsidisation of IMF Emergency
Assistance for Natural Disasters

IFI Fund

2005

multi

53 IMF –
PRGF
Trust

International Monetary Fund – Poverty Reduction and Growth Facility IFI Fund
Trust

1988

multi

54 IMF –PRGFHIPC
Trust

International Monetary Fund – Poverty Reduction and Growth Facility IFI Fund
– Heavily Indebted Poor Countries Initiative Trust (includes HIPC,PRGF and PRGF-HIPC sub-accounts)

1994

multi

55 IBRD

International Bank for Reconstruction and Development

Multilateral
Oganisation

1946

multi

56 IDA

International Development Association

Multilateral
Oganisation

1960

multi

57 IDA HIPCInternational Development Association - Heavily Indebted Poor
Countries Debt Initiative Trust FundIFI Fund

1996

multi

58 IFCInternational Finance Corporation

Multilateral
Oganisation

1956

multi

59 MIGA

Multilateral Investment Guarantee Agency

Multilateral
Oganisation

1988

multi

60 WTO ITCWorld Trade Organisation - International Trade Centre

UN Specialised
Agency1964

331

61 WTO ACWLWorld Trade Organisation – Advisory Centre on WTO Law

IFI Fund

2001

331

62

World Trade Organisation – Doha Development Agenda Global Trust IFI Fund
Fund

2001

331

63

African Solidarity Fund

Regional Fund

1976

multi

64 AfDB

Ordinary Capital and African Development Fund

Regional Fund

1972

multi

65 AsDB

Ordinary Capital and Asian Development Fund

Regional Fund

1973

multi

66 CABEI

Central American Bank for Economic Integration

Regional Bank

1960

multi

67 CAF

Andean Development Corporation

Regional Bank

1968

multi

68 CDB

Caribbean Development Bank (Ordinary Capital and Special
Development Fund)

Regional Bank

1970

multi

69 ECCB

Eastern Caribbean Central Bank

Regional Bank

1983

multi

70 IDB

Ordinary Capital, Fund for Special Operations, Inter-American
Investment Corporation and Multilateral Investment Fund

Regional Bank

1959

multi

71 NDF

Nordic Development Fund

Regional Bank

1989

multi

72 ACBF

African Capacity Building Foundation

Multilateral
Program1991150

- 46 No. Acronym

Name

Type

Year
established

DAC
Sectormulti

73 APEC –ASF

Asia-Pacific Economic Cooperation Support Fund (except
contributions tied to counter-terrorism activities)

Regional
Program2005

74 APFIC

Asia-Pacific Fishery Commission

UN Program

1948

313

75 APO

Asian Productivity Organisation

Regional
Program

1961

multi

76 ASEAN

Association of Southeast Asian Nations: Economic Co-operation

Regional
Program

1967

multi

77 ASEAN(CF)

ASEAN Cultural Fund

Regional
Program

1967

multi

78 AU

African Union (excluding peacekeeping facilities)

Regional
Program

1964

multi

79 AVRDC

World Vegetable Centre

Multilateral
Program

1971

311

80 BSTDB

Black Sea Trade and Development Bank (27 per cent of contributions Regional
reportable as ODA)
Program

1998

multi

81 CAMES

African and Malagasy Council for Higher Education

Regional
Program

1968

110

82 CAPAM

Commonwealth Association for Public Administration andManagement

Regional
Program

1994

150

83 CARICO
M

Caribbean Community Secretariat

Regional
Program

1973

multi

84 CEC

Caribbean Epidemiology Centre

Regional
Program

1975

120

85 CF

Commonwealth Foundation

Regional
Program

1966

150

86 CFC

Common Fund for Commodities

UN Fund1989

311

87 CFTC

Commonwealth Fund for Technical Co-operation

Regional
Program

1971

multi

88 CGIAR(IARC)

Consultative Group on International Agricultural ResearchMultilateral
Program

1971

311

89 CI

Commonwealth InstituteRegional
Program

1886

multi

90 CIATInternational Centre for Tropical Agriculture

part of CGIAR

1969

310

91 CIFOR

Centre for International Forestry Researchpart of CGIAR

1992

310

92 CIHEAM

International Centre for Advanced Mediterranean Agronomic Studies Regional
Program

1962

311

93 CIMMYTInternational Maize and Wheat Improvement Centre

part of CGIAR

1943

311

94 CIPInternational Potato Centre

part of CGIAR

1975

311

95 CITES

Convention on International Trade in Endangered Species of Wild
Fauna and FloraUN Program

1975

700

96 CLAS

Commonwealth Legal Advisory Service

Regional
Program

1962

150

97 CMDF

Commonwealth Media Development Fund

Regional
Program

1981

150

98 COL

Commonwealth of Learning

Regional

1987

110

- 47 No. Acronym

Name

Type

Year
established

DAC
Sector

Program
99 CPLP

Community of Portuguese-Speaking Countries

Regional
Program

1996

multi

100 CPTA

Colombo Plan Technical AssistanceRegional
Program

1950

multi

101 CPTM

Commonwealth Partnership for Technology Management

Regional
Program

1995

300

102 CSClub du Sahel

Regional
Program

1976

150

103 CSC

Commonwealth Scientific Council

Regional
Program

1920

150

104 CSSO

Commonwealth Small States Office

Regional
Program

1981

150

105 CTIAF

Commonwealth Trade and Investment Access Facility

Regional
Program

1997

331

106 CYP

Commonwealth Youth Programme

Regional
Program

1973

430

107 EBRD –ETCEuropean Bank for Reconstruction and Development – Early
Transition Countries Initiative

Regional Fund

2003

240

108 ECOWAS Economic Community of West African States

Regional
Program

1975

multi

109 ENDA

Environmental Development Action in the Third World

Regional
Program

1972

700

110 EPPO

European and Mediterranean Plant Protection Organisation

Regional
Program

1951

700

111 EROPA

Eastern-Regional Organisation of Public Administration

Regional
Program1960

150

112 FFA

South Pacific Forum Fisheries Agency

Regional
Program

1979

313

113 FFTC

Food and Fertiliser Technology Centre

Regional
Program

1969

310

114 FIT

Foundation for International Training

International
NGO

1976

150

115

Global Crop DiversityTrustMultilateral
Program

2004

310

116 GEF

Global Environment Facility (77 per cent of contributions reportable
as ODA)

Multilateral
Program

1991

700

117 GFATM

Global Fund to Fight AIDS, Tuberculosis and Malaria

Multilateral
Program

2001

120

118 GICHD

Geneva International Centre for Humanitarian Demining

Multilateral
Program2005

720

119 IAFIntergovernmental Agency of the Francophonie

Regional
Program

1970

multi

120 IAIInternational African InstituteInternational
NGO

1926

multi

121 IAIIInter-American Indian InstituteRegional
Program

1940

multi

122 IBEInternational Bureau of Education -- International Educational
Reporting System (IERS)

UN Program

1925

110

123 ICAC

International Cotton Advisory Committee

International

1939

311

- 48 No. Acronym

Name

Type

Year
established

DAC
SectorCommodity
Body
124 ICARDA

International Centre for Agricultural Research in Dry Areaspart of CGIAR

1977

311

125 ICCIDD

International Council for the Control of Iodine Deficiency Disorders

Multilateral
Program

1985

120

126 ICDDR,B Centre for Health and Population ResearchInternational
NGO

1978

120

127 ICIPEInternational Centre of Insect Physiology and Ecology

International
NGO

1970

410

128 ICRAInternational Centre for Development Oriented Research inAgriculture

Multilateral
Program

1981

311

129 ICRAF

World Agroforestry Centre

part of CGIAR

1978

311

130 ICRISATInternational Crops Research Institute for the Semi-Arid Tropics

part of CGIAR

1972

311

131 IDEA

International Institute for Democracy and Electoral AssistanceMultilateral
Program

1995

150

132 IDLOInternational Development Law Organisation

Multilateral
Program

1983

150

133 IICInternational Institute for Cotton

Multilateral
Program

1965

311

134 IICAInter-American Institute for Co-operation on Agriculture

Regional
Program

1942

311

135 IITAInternational Institute of Tropical Agriculture

part of CGIAR

1967

311

136 ILRIInternational Livestock Research Institutepart of CGIAR

1994

311

137 INBAR

International Network for Bamboo and Rattan

Multilateral
Program

1997

311

138

INTERPOL Fund for Aid and Technical Assistance to Developing
Countries

Multilateral
Program

1994

150

139 IOCIntergovernmental Oceanographic Commission

UN Program

1960

410

140 IOMInternational Organisation for Migration

Multilateral
Program

1951

150

141 IPCC

Intergovernmental Panel on Climate Change

Multilateral
Program

2000

150

142 IPGRIInternational Plant Genetic Resources Institutepart of CGIAR

1974

311

143 IRRIInternational Rice Research Institutepart of CGIAR

1960

311

144 ISTAInternational Seed Testing Association

International
NGO

1924

311

145 IUCN

International Union for the Conservation of Nature and Natural
Resources (World Conservation Union)

Multilateral
Program

1948

410

146 ITTO

International Tropical Timber Organisation

UN Program

1986

312

147 IVIInternational Vaccine Institute

UN Program

1969

120

- 49 No. Acronym

Name

Type

Year
established

DAC
Sector148 IWMI

International Water Management Institutepart of CGIAR

1992

100

149 JSCA

Justice Studies Centre of the Americas

Regional
Program

2001

150

150 MRC

Mekong River Commission

Regional
Program

1995

100

151 MFMP

Multilateral Fund for the Implementation of the Montreal Protocol

Multilateral
Program

1990

700

152 OAS

Organisation of American States

Regional
Program

1948

multi

153 OECD

Organisation for Economic Co-operation and Development(Contributions to special funds for Technical Co-operation Activities
Only)

Multilateral
Program

1961

multi

154 OECD Dev.
CentreOECD Development Centre

Multilateral
Program

1961

multi

155 OECS

Organisation of Eastern Caribbean States

Regional
Program

1981

multi

156 PAHOPan American Health Organisation

UN Program

1906

120

157 PAIGH

Pan American Institute of Geography and History

Regional
Program

1928

150

158 PARCA

Pan American Railway Congress Association

Regional
Program

1925

210

159 PIDG

Private Infrastructure Development GroupMultilateral
Program

2002

200

160 PIFS

Pacific Islands Forum Secretariat

Regional
Program

1971

multi

161 SADCSouthern African Development Community

Regional
Program

1981

multi

162 SATCC

Southern African Transport and Communications Commission

Regional
Program

1981

200

163 SCAAP(Colombo Plan) Special Commonwealth African Assistance
Programme

Regional
Program

1950

multi

164 SEAFDC

Southeast Asian Fisheries Development Centre

Regional
Program

1967

313

165 SEAMEO Southeast Asian Ministers of Education

Regional
Program

1965

110

166 SOPAC

South Pacific Applied Geoscience Commission

Regional
Program

1972

410

167 SPBEASouth Pacific Board for Educational Assessment

Regional
Program

1980

110

168 SPC

Secretariat of the Pacific Community

Regional
Program

1980

multi

169 SPREP

Pacific Regional Environment Programme

Regional
Program

1980

410

170 UNPO

Unrepresented Nations and Peoples' Organisation

Multilateral
Program

1991

multi

171 USP

University of the South PacificRegional
Program1968110

- 50 No. Acronym

Name

Type

Year
established

DAC
Sector172 WAEMUWest African Economic and Monetary Union

Regional
Program

1994

240

173 WARDA

Africa Rice Centre

part of CGIAR

1970

313

174 WCO –World Customs Organisation Fellowship Programme
Fellowshi
p Prog.

Multilateral
Program

1985

331

175 WMU

Multilateral
Program

1983

110

176 WorldFish WorldFish Centre
Centrepart of CGIAR

1977

313

177 AGID

Association of Geoscientists for International Development

International
NGO

1974

410

178 AITIC

Agency for International Trade Information and Co-operation

Multilateral
Program

1995

331

179 AWEPA

European Parliamentarians for Africa

International
NGO

1975

150

180 CLASCO Latin American Council for Social Sciences (Consejo
Latinoamericano de Ciencias Sociales)International
NGO

1967

100

181 CODESRI Council for the Development of Economic and Social ScienceA
Research in Africa

International
NGO

1973

100

182

Development Gateway Foundation

Multilateral
Program

2001

220

183 CUTS

Consumer Unity & Trust Society International

International
NGO

1983

150

184 ELCI

Environmental Liaison Centre International

International
NGO

1974

410

185 Eurostep

Eurostep

International
NGO

1990

150

186 FARA

Forum for Agricultural Research in Africa

International
NGO

1997

311

187 FAWE

Forum for African Women Educationalists

International
NGO

1992

420

188 GCE

Global Campaign for Education

International
NGO

1999

110

189 HAI

Health Action International

International
NGO

1981

120

190 HURIDOC Human Rights Information and Documentation Systems
S

International
NGO

1982

150

191 ICRAInternational Catholic Rural Association

International
NGO

1970

313

192 ICRC

International Committee of the Red Cross

International
NGO

1863

700

193 ICTSDInternational Centre for Trade and Sustainable Development

International
NGO

1996

410

194 IFRCRCS International Federation of Red Cross and Red Crescent Societies

International
NGO

1919

700

195 IFSInternational Federation of Settlements and Neighbourhood Centres

International
NGO

1926

150

196

International HIV/AIDS AllianceInternational
NGO

1993

120

World Maritime University

- 51 No. Acronym

Name

Type

Year
established

DAC
Sector197 IIEDInternational Institute for Environment and Development

International
NGO

1971

410

198 INAFIInternational Network of Alternative Financial Institutions

International
NGO

1995

240

199 IPPF

International Planned Parenthood Federation

International
NGO

1954

130

200 IPS

Inter Press Service, International Association

International
NGO

1964

150

201 ISCInternational Seismological Centre

International
NGO

1964

430

202 ISHR

International Service for Human Rights

International
NGO

1984

150

203 ITF

International Trust Fund for Demining and Mine Victims AssistanceMultilateral
Program

1998

700

204 IUEF

International University Exchange Fund -- IUEF Stip. in Africa andLatin America

International
NGO

1969

110

205 MSF

Médecins Sans FrontièresInternational
NGO

1971

700

206 OMCTWorld Organisation Against TortureInternational
NGO

1986

150

207 PAID

Pan-African Institute for Development

International
NGO

1987

110

208 PANOSPANOS InstituteInternational
NGO

1986

150

209 PSI

Population Services International

International
NGO

1970

130

210 SID

Society for International Development

International
NGO

1957

150

211 TI

Transparency International

International
NGO

1993

150

212 UNIONInternational Union Against Tuberculosis and Lung Disease

International
NGO

1920

120

213 WSP -International Peacebuilding Alliance (Interpeace)

UN Program

1994

700

214 WUSWorld University Service

International
NGO

1925

110

215 WWB

Women’s World Banking

International
NGO

1990

240

216 CITIES

Cities Alliance

PPP

1999

430

217 GAIN

Global Alliance for Improved Nutrition

PPP

2003

120

218 GAVI

Global Alliance for Vaccines and Immunization

PPP

1999

120

219 GeSCIGlobal e-Schools and Communities Initiative

PPP

2003

110

220 GWP

Global Water Partnership

PPP

1996

100

221 IAVIInternational AIDS Vaccine Initiative

PPP

1996

120

222 IPMInternational Partnership for Microbicides

PPP

2002

120

223 GKP

Global Knowledge Partnership

PPP

1997

430

224 EFA

Education for All Initiative

IFI Fund

2002

110

225 CEPF

Critical Ecosystems Partnership

Multilateral

2000

700

- 52 No. Acronym

Name

Type

Year
established

DAC
Sector

Program
226 PPIAF

Public-Private Infrastructure Advisory Facility

Multilateral
Program

1999

200

227 PCFPrototype Carbon Fund

Multilateral
Program

2000

700

228 UCWUCW Project

Multilateral
Program

2000

150

229 PCP

Post Conflict Partnership Program (formerly Post Conflict Fund)

Multilateral
Program

1997

700

230 IF

Integrated Framework

Multilateral
Program

1997

331

231 FIRST

Financial Sector Reform and Strengthening

Multilateral
Program

2002

240

232 GFHR

Global Forum for Health ResearchMultilateral
Program

1998

120

233 ESMAP

Energy Sector Management Program

Multilateral
Program

1998

230

- 53 ANNEX IV. LONG-TERM TRENDS IN DAC ODA(Two-year averages, net disbursements ODA as percent of GNI)Countries
Australia
Austria
Belgium
CanadaDenmark
FinlandFranceGermany
GreeceIreland
Italy
Japan
Luxembourg
Netherlands
New Zealand
NorwayPortugal
Spain
SwedenSwitzerland
United Kingdom
United States
TOTAL DAC
of which
DAC-EU countries

1984-1985
0.47
0.33
0.56
0.50
0.83
0.38
0.62
0.46
..
0.23
0.27
0.31
0.16
0.97
0.25
1.02
0.05
0.09
0.83
0.30
0.33
0.24
0.34

1994-1995
0.34
0.22
0.35
0.40
0.99
0.31
0.58
0.32
..
0.27
0.21
0.28
0.38
0.79
0.23
0.94
0.29
0.26
0.86
0.35
0.30
0.12
0.28

2004-2005
0.25
0.38
0.47
0.31
0.83
0.42
0.44
0.32
0.16
0.40
0.22
0.23
0.83
0.78
0.25
0.91
0.41
0.26
0.86
0.43
0.42
0.20
0.29

0.45

0.39

0.39

Source: DAC Annual Report (2005)

- 54 -

Annex V. Bilateral vs. Multilateral Contributions, 2000 - 2005 (US$ million, at 2004 Prices)
Fund flows 114: Net Disbursements
Amount type D: Constant Prices (2004)
15: I.A. Bilateral ODA

Transaction type
Year

2000

2001

2002

2003

180: I.B. Multilateral ODA
2004

2005

Total

2000

2001

2002

2003

2004

2005

Total

Share
Multi/tota
l ODA

Donor
Australia

1,094

1,031

1,117

1,145

1,191

1,343

6,921

331

332

310

287

270

214

1,743

20%

Austria

392

642

497

256

353

1,205

3,345

239

278

213

310

325

334

1,699

34%

Belgium

693

738

975

1,651

902

1,282

6,241

498

536

493

433

561

642

3,163

34%

Canada

1,440

1,535

1,928

1,495

1,991

2,572

10,961

724

427

647

757

608

838

4,001

27%

Denmark

1,501

1,523

1,427

1,156

1,202

1,336

8,146

940

883

831

803

835

740

5,032

38%

Finland

306

314

331

340

402

584

2,277

216

230

278

275

278

299

1,577

41%

France

4,087

3,793

4,913

5,827

5,567

7,143

31,330

1,844

2,341

2,543

2,280

2,906

2,750

14,66332%

Germany

3,786

4,089

4,467

4,499

3,823

7,396

28,059

3,303

3,061

2,680

3,019

3,712

2,617

18,39140%

Greece

152

128

151

260

161

200

1,052

196

184

239

153

160

172

1,104

51%

Ireland

240

280

367

395

410

471

2,164

125

155

180

171

198

231

1,060

33%

Italy

568

668

1,402

1,198

704

2,210

6,749

1,506

1,789

1,846

1,548

1,757

2,748

11,194

62%

Japan

9,246

8,061

7,551

6,711

5,917

10,71348,200

3,540

2,582

2,923

2,697

3,005

2,821

17,56927%

Luxembourg

143

157

160

169

171

181

981

36

47

43

50

64

67

306

24%

Netherlands

3,415

3,313

3,338

3,138

2,670

3,626

19,500

1,358

1,412

1,212

1,267

1,534

1,410

8,194

30%

New Zealand

138

142

139

153

159

206

937

46

45

46

43

53

46

278

23%

Norway

1,305

1,329

1,460

1,613

1,536

1,820

9,063

461

573

702

640

662

675

3,713

29%

Portugal

276

279

259

206

873

214

2,107

142

130

190

155

158

156

931

31%

Spain

1,142

1,801

1,424

1,317

1,400

1,797

8,882

753

921

1,018

927

1,037

1,114

5,769

39%

Sweden

1,661

1,781

1,737

1,982

2,076

2,266

11,503

746

681

1,013

691

646

1,111

4,889

30%

887

904

974

1,028

1,187

1,393

6,373

372

369

222

386

359

365

2,072

25%

United Kingdom

3,631

3,611

4,494

4,421

5,339

8,068

29,563

2,401

2,696

1,819

2,771

2,544

2,572

14,80333%

United States

8,078

8,826

11,06815,044

16,25024,607

83,874

2,782

3,351

2,848

1,705

3,455

2,281

16,42216%

Czech Republic

11

24

42

91

63

60

291

17

19

19

11

45

66

176

38%

Hungary

..

..

..

16

35

38

90

..

..

..

9

35

59

102

53%

Switzerland

Iceland

5

7

6

16

16

17

69

6

7

11

4

5

6

39

36%

Korea

145

210

238

262

331

414

1,600

90

114

83

129

93

258

766

32%

Poland

17

36

10

21

25

40

149

20

6

6

9

93

131

265

64%

Slovak Republic

3

6

6

10

11

29

64

7

8

5

8

17

24

69

52%

Turkey

42

39

47

38

292

579

1,038

92

94

82

58

47

75

448

30%

Arab Countries

550

771

2,886

2,882

2,057

621

9,769

207

124

413

82

67

55

947

9%

Other Bilateral Donors

196

112

155

114

487

557

1,622

8

11

11

12

40

96

179

10%

Source: DAC Online (Table 2a)