More than 200 multilateral agencies - such as the United Nations, the World Bank and the global funds - receive or serve as a channel for one third of all aid. When including earmarked funding provided to multilaterals for implementation, this goes up to two fifths.
How do they fit into the wider development picture? In our annual report on multilateral aid (pdf) - the only one of its kind - we work to shed light on this question by analysing a number of key issues:
- sources of funding for multilateral organisations
- multilateral aid strategies, including their relationships with DAC donor agencies
- the effectiveness of multilateral aid
- how multilaterals interact with partner countries
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The pattern of how aid is delivered and received looks like this: splintered across too many donors, each with their own processes and priorities, working in often overlapping relationships with each other. Our data shows that only a fraction of actual aid volume - 5% - is handled by half of all aid relations. Not only is this pattern complex to understand and co-ordinate, it also creates transaction costs and administrative burdens for recipient countries.
Based on the key goals outlined in the Accra Agenda for Action of reducing fragmentation and improving the division of labour, we work to help donors and recipients understand where fragmentation is occurring and invest where aid is expected to be most needed. We do this by:
- developing a set of indicators - one that our members agree with more and more - to monitor fragmentation across countries (access our global data, xls)
- lending technical support to donors in their efforts to address fragmentation by streamlining their aid relations and reducing the number of partner countries they work with
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Founded in our work on aid fragmentation, we take a closer look at where aid activity overlaps, and where it is missing. The areas where aid overlaps are commonly referred to as “aid darlings”, while those where it is missing are referred to as “aid orphans”.
What is the exact definition of an aid orphan? Which countries qualify as aid orphans? And what can we do to remedy the situation and get them the support they need? The answers to these questions are still part of an ongoing international debate.
We carry our analysis to contribute to this debate. Our main contribution consists of developing a methodology to identify aid orphan countries.
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Recent studies indicate that the value of aid is reduced by 15-20% when it is unpredictable and volatile. For developing countries, uncertainty about future resources complicates decision making on resource allocations and can stand in the way of longer-term programmes and reforms. For donors, lack of predictable and transparent aid makes it harder to harmonise efforts - one of the fundamental principles of the Paris Declaration - and to achieve enduring development results.
To help efforts toward greater predictability and transparency, we conduct annual surveys of donors' spending plans for the following years - the only regular process at the global level to do so.
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The concept of ODA covers a range of assistance from developed to developing countries - from grants and concessional loans to debt relief and humanitarian aid, to development research and aid administration costs in donor countries. Although it is a consistent and comparable global measure to track donor spending, ODA does not give an accurate idea of just how much aid is transferred to each recipient country. Built on an earlier concept of “core” aid - and with input from NGOs and researchers - we've developed the concept of country programmable aid (CPA), outlined in our Development Brief (pdf). Since 2000, we measure CPA annually.
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