THE DAC IN A CHANGING WORLD

For 50 years now, the DAC has grouped the world's main donors, defining and monitoring global standards in key areas of development. It assists its members and the expanded donor community in delivering on their commitments while engaging in global efforts to make aid work better. But successful development requires much more than aid. This is why increasingly, the DAC looks beyond the traditional aid arena to address pressing development challenges - such as climate change, conflict and fragility, corruption and more open and fair trade - and works to ensure that every available source of development finance is leveraged to deliver concrete development results.

1960

1. DEVELOPMENT ASSISTANCE GROUP

On 13 January 1960, the Development Assistance Group (DAG) is created as a forum for consultations among donors on assistance to developing countries. The DAG is part of an extraordinary surge in aid-related institutional developments, which have laid the foundation for the current aid system.

1961

2. DAC ESTABLISHED

Following the OECD’s entry into operation in September 1961, the DAG becomes the Development Assistance Committee (DAC), holding its first meeting on 5 October 1961. The OECD Development Department is created, consisting of two branches: the Development Finance Branch, and the Technical Co-operation Branch. The Development Finance Branch later becomes the Development Assistance Directorate (DAD, 1969), and then the Development Co-operation Directorate (DCD, 1975), which acts as the operational arm of the DAC.

1962

3. IMPROVING AID

The DAC launches regular reviews of its members’ development assistance efforts and policies. The first annual DAC High Level Meeting is convened in July to examine the conclusions of the first Aid Reviews (now known as Peer Reviews). The DAC issues agreed Directives for Reporting Aid and Resource Flows to Developing Countries on a comparable basis. The DAC Chair also issues the first annual Development Co-operation Report.

1963

4. TERMS AND CONDITIONS OF AID

The DAC adopts a Resolution on the Terms and Conditions of Aid, recommending that DAC members ensure that the terms of aid are adapted to the circumstances of each developing country or group of countries. This will serve as the basis for the first Recommendation on Financial Terms and Conditions (1965), setting the standards for official development assistance (ODA).

1965

5. AID TARGETS

With the Recommendation on Financial Terms and Conditions, the DAC introduces measures for defining what is considered aid. DAC members reaffirm their support for the target established by the first United Nations Conference on Trade and Development (UNCTAD, Geneva, Switzerland, 1964), which calls for each developed country to target 1% of “national income” as assistance to developing countries.

1966

6. REPORTING ON AID

The OECD Council approves the Expanded Reporting System on External Lending, a joint project by the OECD and the International Bank for Reconstruction and Development (IBRD) that will serve as the basis for the Creditor Reporting System (CRS), the DAC database on individual countries’ aid activities.

1969

7. WHAT IS AID?

The DAC adopts the concept of ODA, which separates aid funds from other official flows. The annual DAC Chair’s report publishes first-time figures on ODA as a percentage of gross national product (GNP).

1972

8. TRACKING ODA

The DAC adopts a firmer definition of ODA – one that still applies today – as part of the revised DAC Terms Recommendation (see Highlight 5), which sets an overall financial target for each DAC member’s ODA programme at 84% grant element. Special terms are recommended for least developed countries.

1974

9. UNTYING AID

Ten DAC members subscribe to a Memorandum of Understanding on Untying Bilateral Development Loans in Favour of Procurement in Developing Countries, encouraging other bilateral donors to increasingly untie their bilateral development loans.

1975

10. ENGAGING ALL ACTORS

Ten DAC members subscribe to a Memorandum of Understanding on Untying Bilateral Development Loans in Favour of Procurement in Developing Countries, encouraging other bilateral donors to increasingly untie their bilateral development loans.

1977

11. MEETING BASIC HUMAN NEEDS

The DAC High Level Meeting adopts a Statement on Development Co-operation for Economic Growth and Meeting Basic Human Needs, which places emphasis on their essential role in economic growth. Because programmes supporting basic human needs are likely to have high local costs in developing countries, DAC members adopt the DAC Guidelines for Local Cost Financing.

1978

12. AID TARGETS ON THE RISE

The Strengthened Recommendation on Terms and Conditions of Aid - based on the DAC Terms Recommendation - increases the average grant element target for each DAC member's ODA programme from 84% (1972) to 86%; higher-term sub-targets are also established for least developed countries.

1979

13. GUIDELINES FOR BETTER AID

The DAC conducts an in-depth comparative review of the aid procedures of DAC agencies and adopts the Guidelines for Improving Aid Implementation. The DAC also adopts Guidelines on Local and Recurrent Cost Financing, which introduce an important new element of flexibility in the policy of development co-operation financing.

1982

14. DEVELOPING COUNTRY DEBT

The international debt crisis marks the beginning of a long process of policy reform and structural adjustment by developing countries. The Development Co-operation Directorate publishes the first survey of external debt of developing countries.

1983

15. WOMEN IN DEVELOPMENT

With the Guiding Principles to Aid Agencies for Supporting the Role of Women in Development - the foundation of later work on the central role of women and girls in development - the DAC affirms that development “must involve the full participation of both men and women to be effective. Substantial gains will only be achieved with the contribution of both sexes.”

1984

16. IMPROVING DONOR CO-ORDINATION

To promote better aid co-ordination and policy, the DAC steps up its agreements with the Bank for International Settlements (BIS), the World Bank and the United Nations Development Programme (UNDP). The first annual OECD External Debt Statistics are published, based mainly on OECD/BIS combined data.

1985

17. THE DAC AT 25

The DAC publishes Twenty-Five Years of Development Co-operation, tracing aid volumes and major policy developments to assess the effectiveness of aid. Despite setbacks in sub-Saharan Africa and some countries in Latin America, the report finds that many developing countries have achieved remarkable economic and social growth and that aid, accompanied by growing exports to OECD countries, has significantly contributed to these gains.

1986

18. DEVELOPING COUNTRIES IN THE LEAD

The DAC High Level Meeting adopts Guiding Principles on Aid for Improved Development Policies and Programmes and Implications for Aid Coordination, acknowledging that recipient governments have the central responsibility for coordinating aid and that the role of international organisations is to promote effective development strategies and programmes for improved aid co-ordination.

1986

19. VALUE FOR MONEY

To ensure value for money, the DAC sets out Good Procurement Practices for Official Development Assistance to encourage competition among suppliers of goods and services supported by aid. These recommendations are supplemented in 1997 when the DAC adopts a recommendation on tackling corruption in procurement.

1986

20. AID AND THE ENVIRONMENT

The OECD Council calls for the thorough assessment of the potential environmental impact of aid projects and programmes. The resulting Recommendation on Measures Required to Facilitate the Environmental Assessment of Development Assistance Projects and Programmes stresses the need to ensure appropriate staff and financing, and to build local capacity.

1987

21. PROMOTING FAIR TRADE

To help align development objectives with fair trade, the DAC issues the Guiding Principles for Associated Financing and Tied and Partially Untied Development Assistance.

1989

22. GENDER EQUALITY

The DAC Guidelines on Women in Development signal that attaining sustainable development is only possible when the needs and interests of both men and women are fully recognised in the planning and implementation of projects and programmes.

1991

23. TARGETING THE ENVIRONMENT

OECD development and environment ministers endorse the Guidelines on Aid and Environment - a series of principles developed by the DAC to address environmental threats such as climate change, ozone layer depletion, deforestation and deteriorating water supply. Donors pledge to target financial support to ensure sustainable development.

1991

24. REGULATING TIED AID

To complement work on untying aid, the DAC teams up with the export credit community to issue New Disciplines for Tied Aid and Associated Financing. These prohibit the use of tied aid for commercially viable projects in better-off developing countries and require international competitive bidding for large projects. This first effort of the aid and trade communities sets the course for joint work in later years.

1991

25. FUNDING COUNTRY COFFERS

With the Principles for Programme Assistance, DAC members move towards budget support - as opposed to the reigning mode of project-based funding - aimed at quickly disbursing money straight into government coffers in recipient countries.

1993

26. AID RECIPIENTS: WHO QUALIFIES?

With emerging aid recipients in Eastern Europe and the former Soviet Union, diversification among developing countries and new development challenges such as environmental sustainability and security, the DAC revises its List of Developing Countries and Territories. A new two-part DAC List of Aid Recipients distinguishes between countries in transition, where aid is not counted as ODA, and developing countries and territories. In 2005, the DAC returns to a single List of Recipients of Official Development Assistance.

1995

27. DEVELOPMENT IN A NEW CONTEXT

With the adoption of the Statement on Development Partnerships in the New Global Context, the DAC reaffirms its commitment to putting developing countries directly in charge of managing their own integrated development strategies - to address economic, social, political and environmental factors, built on solid foundations of democratic accountability, protection of human rights and rule of law.

1995

28. DEVELOPMENT FOR AND BY PEOPLE

With the adoption of the Statement on Development Partnerships in the New Global Context, the DAC reaffirms its commitment to putting developing countries directly in charge of managing their own integrated development strategies - to address economic, social, political and environmental factors, built on solid foundations of democratic accountability, protection of human rights and rule of law.

1995

29. ENGAGING THE PRIVATE SECTOR

The DAC Orientations for Development Co-operation in Support of Private Sector Development encourages aid agencies to involve this sector in creating wealth and reducing poverty as a means of fostering dynamic market- based economies in developing countries.

1996

30. SHAPING THE 21st CENTURY

Continuing its emphasis on people-centred development, local ownership, global integration and international partnership, the DAC designs a strategy for “a new global partnership with developing countries […] to achieve global results”. Shaping the 21st Century: The Contribution of Development Co-operation gathers strong consensus around a series of goals for global development.

1998

31. MEASURING PROGRESS

The DAC introduces a set of indicators to demonstrate progress towards internationally agreed development goals, measured against a 1990 baseline. These indicators - reflecting the recommendations of donors, developing countries, multilateral organisations and international experts - build momentum towards the adoption of the Millennium Development Goals in 2000.

1999

32. FOCUS ON STATISTICS, GENDER EQUALITY

The DAC leads the establishment of the Partnership in Statistics for Development in the 21st Century, PARIS21 in short. This network of countries, organisations, agencies and individuals helps developing countries overcome the challenges of producing, analysing and using sound, transparent data. In this same year, the DAC issues Guidelines for Gender Equality and Women's Empowerment in Development Co-operation.

2000

33. A BETTER WORLD FOR ALL

On the eve of the United Nations Millennium Summit, the International Monetary Fund (IMF), OECD, United Nations and World Bank jointly publish A Better World for All: Progress towards the International Development Goals. The DAC endorses this report and adopts a Policy Statement on Partnership for Poverty Reduction: From Commitment to Implementation, outlining key actions to achieve these agreed goals.

2000

34. GENDER IN THE 21st CENTURY

During a United Nations Special Session, Women 2000: Gender Equality, Development and Peace for the 21st Century, the DAC contributes a plan for mainstreaming gender into development - a critical precondition for achieving the international development goals.

2001

35. ENDING POVERTY

The DAC adopts the Guidelines on Poverty Reduction, building consensus on the central role of poverty reduction in aid agency strategies and pioneering the use of a multidimensional and interdisciplinary perspective.

2001

36. DEVELOPMENT AND SECURITY

The DAC issues Guidelines on Helping Prevent Violent Conflict, including the seminal DAC Guidance on Conflict, Peace and Development Co-operation. Developed in the late 1990s, this guidance provides the basis for two special DAC meetings on the complex reconstruction and relief challenges of Afghanistan (2002) and Iraq (2003), bringing seemingly polarised players to the table around common concerns for peace and security.

2001

37. THE NEEDIEST FIRST

The DAC Recommendation on Untying ODA to Least Developed Countries encourages further untying of aid in the countries most in need. It does not apply, however, to free-standing technical co-operation and food aid.

2002

38. BOOSTING AID QUANTITY AND QUALITY

With the Monterrey Consensus reached at the International Conference on Financing for Development (Monterrey, Mexico), donor countries pledge substantial increases in aid by 2006, and developing countries recognise the importance of creating an enabling environment for investment. The DAC approves six Good Practice Papers on Harmonising Donor Practices for Effective Aid Delivery.

2003

39. DONORS ALIGN TO COUNTRY NEEDS

At the High Level Forum on Harmonisation (Rome), the Rome Declaration on Harmonisation is adopted to promote donor co-ordination of aid efforts, tailored to meet the most pressing development needs of recipient countries. The DAC Task Force on Donor Practices - which becomes the Working Party on Aid Effectiveness - is created as an open forum for donors to share experiences and expertise.

2005

40. THE PARIS DECLARATION

At the Paris High Level Forum, over 100 developed and developing countries endorse the Paris Declaration on Aid Effectiveness, agreeing to tackle issues that have hampered development for decades.

2005

41. SECURITY SYSTEM REFORM

The DAC deepens existing research on the challenges of where development and security meet (2001) with the Guidelines on Security System Reform and Governance. This authoritative work paves the way for ground-breaking co-operation across government sectors - judicial, police and the armed forces - to tackle critical problems in conflict-affected, fragile states.

2005

42. AID RECIPIENTS REDEFINED

The DAC approves a new, simplified List of Recipients of Official Development Assistance. It includes all low- and middle-income countries, except those that are members of the G8 or the European Union. It also excludes countries with a firm date for EU admission.

2005

43. REVIEW OF DEVELOPMENT EFFECTIVENESS

In 2005 - following a request from African Heads of State - the United Nations Economic Commission for Africa and the DAC develop a Mutual Review of Development Effectiveness. Through this biennial consultation, African leaders and policy makers engage with OECD counterparts to assess commitments, monitor performance and identify good practice on the continent.

2005

44. AID FOR TRADE

The World Trade Organization (WTO) and OECD launch an initiative to promote more and better aid for trade, emphasising the central role that trade can play in reducing poverty. The initiative encourages developing countries to take charge of their trade-related aid needs and promotes open and transparent dialogue on what works and what doesn't, based on the Paris Declaration.

2006

45. GROWTH THAT WORKS FOR THE POOR

The DAC endorses guidance to help donors increase the impact of growth on poverty reduction (Promoting Pro-Poor Growth), focusing on areas that are important for long-term and sustainable poverty reduction: the private sector, agriculture and infrastructure.

2007

46. STRENGTHENING FRAGILE STATES

A model for donors working with conflict-ridden states - developed by the DAC and the World Bank Learning and Advisory Process on Difficult Partnerships - is formally adopted as the DAC Principles for Good International Engagement in Fragile States and Situations.

2008

47. ACCRA AGENDA FOR ACTION

At the Accra High Level Forum on Aid Effectiveness, developed and developing countries endorse the Accra Agenda for Action. In doing so, developing countries commit to taking control of their own future, donors pledge to co-ordinate better amongst themselves and all agree to be more accountable to each other - and to their citizens.

2008

48. CHINA-DAC STUDY GROUP

The DAC China-DAC Study Group is created to promote co-operation in development efforts in Africa. This forum for dialogue and mutual learning enables DAC donors and China to share lessons from their experiences and approaches in the continent.

2010

49. SOUTH-SOUTH CO-OPERATION

A high-level meeting in Bogota, Colombia, points to co-operation among developing countries as a fundamental component of international efforts to deliver development results. The Bogota Statement - founded on 110 case stories from countries that are both aid recipients and donors - aims to adapt the aid effectiveness principles of the Paris Declaration and Accra Agenda for Action to South-South co-operation.

2010

50. DILI DECLARATION

Developing and developed countries come together in Dili, Timor-Leste, to agree on the Dili Declaration, which outlines goals for peacebuilding and statebuilding as well as concrete commitments for governments and international actors to reach these goals.