Development finance topics

We help donors and recipients understand where development finance is expected and most needed so that they can better plan and co-ordinate.

Our insights, analysis and policy recommendations

Aid for trade

The Aid for Trade Initiative has allowed for the active engagement of a large number of organisations and agencies in helping developing countries and especially the least developed build the infrastructure and supply-side capacity they need to connect to regional and global markets and improve their trade performance.

We track aid-for-trade flows and share good practice so that developing countries can capitalise on the opportunities of international trade.

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Development finance of countries beyond the DAC

Emerging providers of development finance and other countries that are not members of the Development Assistance Committee (DAC) have an increasingly important role in financing development co-operation. This generates a stronger need for transparency on their development co-operation programmes.

Statistics, analyses and information on reporting by these countries to the OECD are available here. Estimates are published on countries that do not provide the OECD with data.

More about development finance of countries beyond the DAC

Global Outlook on Financing for Sustainable Development

Financing the Sustainable Development Goals (SDGs) in developing countries is a major challenge. Three years after the Addis Ababa Action Agenda (AAAA) in 2015 called on all actors –public and private-- to coordinate better and mobilise more financial resources, the outlook is not encouraging: external finance --which many developing countries continue to depend on heavily-- has been going down, largely due to the drop in private flows, and coordination remains poor. The trend must be reversed: financing the sustainable development of poor countries is an investment in the well-being of all nations. OECD countries must face the challenge: urgent and bold action is needed to implement the AAAA with their partners and fulfil the promise of Agenda 2030 at home and abroad. Mobilising more finance for developing countries is not enough; the quality –i.e. the “sustainable development footprint”– of all finance must be enhanced.

OECD report recommends reforms in three areas: (i) better measurement of the quantity and quality of finance for the SDGs; (ii) better incentives to direct the finance already available globally to the SDGs; and (iii) better co-ordination of actors to connect the supply and demand for financing for sustainable development in developing countries.

Multilateral Aid

Over 200 multilateral organisations collectively receive about 40% of official development assistance and using these funds effectively will be fundamental in achieving the Sustainable Development Goals.

More about multilateral development finance

The OECD monitors development co-operation flows channelled through multilateral organisations and shares good practice to improve support to developing countries.

Private sector

The OECD-DAC is playing a key role to ensure that the private sector contributes to the delivery of the Sustainable Development Goals (SDGs). This includes leveraging private investment for the SDGs and improving the quality of this investment.

Transition Finance

Work on ‘Transition finance’ recently launched by the DAC/OECD aims to better understand financing challenges and opportunities faced by countries as they move along the development continuum. It includes an analysis of dynamics affecting domestic and external flows as countries transition, including official development finance, remittances, philanthropy and private investment, with the ultimate objective of defining the right policy and financing mixes that will ensure long-term effects and resilience of support, as well as maximise the  contribution of development finance to the SDGs. It combines methodological papers, tools for transitioning countries and their partners, and country pilots. 

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What questions does the study of Transition Finance try to address?

  • How could the DAC help the phasing out of ODA and secure the progressive growth of other sources of financing (e.g. private or domestic), thereby securing long-term sustainable financing (e.g. by preserving debt sustainability)? 
  • How could the DAC increase the effectiveness of ODA, identifying the best and most innovative tools, policies and partnerships available along the development continuum to best serve the financial needs of transitioning countries?
  • How could the DAC design long-term support strategies that go beyond ODA? In other words, how could DAC members continue to support countries after ODA graduation to preserve the benefits of ODA in the longer term and avoid setbacks? 
  • What kinds of capacity building efforts, promotion of transfers of all kinds (from private investment to technologies or knowledge) and domestic resource mobilisation efforts, could be fostered by ODA during phasing out in anticipation of transition?

Transparency

Transparency is critical to ensure accountability between development partners and the intended beneficiaries of development. Transparent practices helps to ensure that funds reach their intended targets and results are achieved.

 More about transparency

The OECD DAC works towards a successful "transparency transformation" by:

  • developing instruments to help governments translate transparency into tangible improvements
  • supporting e-government and internet-based technologies and applications
  • providing regular reviews of development partner and donor countries, and
  • promoting greater transparency as a means to fight corruption.

Small Island Developing States (SIDS)

Because ODA is a scarce resource for financing development, it is important to ensure it reaches the countries and people that need it most. The OECD provides statistical data and policy analysis on concessional finance to Small Islands Developing States (SIDS) to enhance access to and quality of development finance to countries most in need and support the development of financial instruments and approaches that are tailored to SIDS’ specific circumstances and needs.

More about SIDS