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Table of Contents
Introduction
The objective of the CRS Aid Activity database is to provide a set of readily available basic data that enables analysis on where aid goes, what purposes it serves and what policies it aims to implement, on a comparable basis for all DAC members. Most commonly Aid Activity data are used to analyse the sectoral and geographical breakdown of aid for selected years and donors or groups of donors. But the database also permits to consider specific policy issues (e.g. tying status of aid) and monitor donors’ compliance with various international recommendations in the field of development co-operation.
The CRS Aid Activity database is accessible to public. This User’s Guide explains its basic features and helps first-time users in querying the online database. Precise definitions of the reporting concepts are given in the Reporting Directives. These can be downloaded in their totality (in pdf), checked-in using the user friendly version, or accessed through the User’s Guide which provides links to the relevant sections.
Where do the data come from?
The aid activity data come from donors, including the 22 member countries of the OECD’s Development Assistance Committee (DAC), the European Commission and other international organisations. (See List of DAC members and agencies.)
The data are part of DAC members’ official statistical reporting to the OECD. (Non-DAC donors' reporting takes place on a voluntary basis.) A network of statistical correspondents collects data from aid agencies and government departments (central, state and local) on an ongoing basis. Their task is also to ensure that reporting conforms to the Directives (definitions and classifications) agreed by the DAC.
The DAC Secretariat is responsible for data processing, quality control and dissemination. It responds to any questions about the data and can also give users advice on data analysis. (Send email to dac.contact@oecd.org.)
Basic concepts
Aid Activity
An aid activity can take many forms. It could be a project or a programme, a cash transfer or delivery of goods, a training course or a research project, a debt relief operation or a contribution to a non-governmental organisation. The Aid Activity database covers them all, but to facilitate database management some may have been aggregated (grouped) as follows:
Scholarships, contracts of individual experts and other technical co-operation activities of relatively small monetary value - by sector and recipient; Food and emergency aid - by recipient; Donors’ administrative costs - by recipient or in one overall total.
The aggregation inevitably restricts the detail that can be provided on these activities. Preference is given to sector and recipient identification rather than other criteria such as delivery channel or policy marker status.
Aid Flow
Aid activities are financed through grants and “soft” loans (low interest rate and long duration). For most types of financial flows, the Aid Activity database records the face value of the activity at the date a grant or loan agreement is signed with the recipient. This is called a commitment.
The implementation of an aid activity can go on for several years. Data on the amounts disbursed each year are available at the activity level for some, but not all, donors. Consequently, most analyses have to be undertaken on a commitment basis.
Total commitments per year comprise new undertakings entered in the year in question (regardless of when disbursements are expected) and additions to agreements made in earlier years. (Cancellations and reductions of earlier years’ agreements are not taken into account.)
Aid flows are measured on a calendar year basis.
Official Development Assistance
The Aid Activity database comprises data on official development assistance (ODA) to developing countries. ODA activities are:
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undertaken by official agencies, including state and local governments, or by their executing agencies;
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with the promotion of the economic development and welfare of the recipient country as the main objective;
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at favourable financial terms (i.e. including a minimum element of subsidy).
Bilateral and Multilateral Outflows
The Aid Activity database covers DAC Members’ bilateral ODA i.e.
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activities undertaken directly with an aid recipient or with national and international non-governmental organisations active in development; and
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promotion of development awareness and other development-related spending in the donor country (e.g. debt reorganisation, administrative costs).
DAC Members’ multilateral aid i.e. contributions to the regular budgets of the multilateral institutions is excluded. These data are available in the aggregated DAC statistics.
Aid activities financed from the multilateral institutions’ regular budgets are referred to as “multilateral outflows”. The Aid Activity database includes those of the World Bank, the regional development banks and some UN agencies.
N.B. Projects executed by multilateral institutions or non-governmental organisations on behalf of DAC Members are classified as bilateral aid (since it is the donor country that effectively controls the use of the funds.)
Where does aid go?
The Aid Activity database registers information on where aid goes at the level of individual aid recipient countries. The countries are categorised either as “developing countries or territories” eligible to receive official development assistance (ODA).
Each activity has only one recipient. (This is to avoid double-counting when summing up activities in different ways.) Activities that benefit several recipients are classified by continent or sub-continent (e.g. Africa, Sub-Saharan Africa). The category “developing countries, unspecified” is used if an activity benefits several regions.
In IDS/o, users can retrieve data either by selecting one or several individual recipient countries or the pre-defined country groups (regions or income groups). It is also possible to define the selection both by region and income (for example, to obtain data on aid activities in the least developed countries of Asia).
What purposes does aid serve?
The term “purpose of aid” signifies the sector of the recipient’s economy that the aid activity is designed to assist, e.g. health, energy, agriculture. It does not refer to the type of goods or services provided. Some contributions are not targeted to a specific sector, e.g. balance-of-payments support, debt relief, emergency aid. These are called “non sector allocable aid”.
The Aid Activity database registers information on the purpose of aid using a sector classification specifically developed to track aid flows and to permit measuring the share of each sector or other purpose category in total aid. All in all, there are 26 main sector/purpose categories, each of which is defined through a number of “purpose codes”.
Each activity can be assigned only one purpose code. (This is to avoid double-counting when summing up activities in different ways.) For activities cutting across several sectors, either a multi-sector code or the code corresponding to the largest component of the activity is used.
In IDS/o, users can search data by purpose code or sector and obtain results either at the level of individual activities or in the form of summary statistics by sector and recipient.
What policies does aid support?
Guidance for analyses of the policy objectives of aid
DAC statistics on aid by purpose can be supplemented with information on the policy objectives of aid. Data on aid activities targeting environmental sustainability and gender equality have been collected since 1991. In 1997, data collection methodology was revised. Analyses of the policy objectives on aid should therefore generally focus on aid extended since 1997.
The data are collected using so-called policy objective markers. The characteristics of marker data are described below using environmental sustainability as an example. A more detailed explanation, including the definitions of each marker, can be found in the reporting directives.
Aid targeting environmental sustainability or “environment-oriented aid”
Certain aspects of environmental sustainability can be captured through purpose codes (e.g. biodiversity conservation, biosphere protection, environmental policy and planning). But activities across all economic sectors can be targeted to environmental sustainability. Infrastructure projects designed with integrated environmental protection components, water resources protection or sustainable forest management programmes are examples of typical environment-oriented aid activities that would not have been assigned an environmental purpose code. They can be identified with the help of the environmental sustainability marker.
Environmental sustainability marker data are descriptive rather than quantitative.
An activity can target environmental sustainability either as a “principal objective” or “significant objective”. The score principal (score “2”) means environmental sustainability was an explicit objective of the activity and fundamental in its design (i.e. the activity would not have been undertaken without this objective). The score significant (score “1”) means environmental sustainability was an important, but secondary, objective of the activity (i.e. not one of the principal reasons for undertaking the activity). Analyses of environment-oriented aid should take into consideration both categories, but preferably present each separately as figures for activities with the score “1” are less precise than those with the score “2”. It may happen that only a proportion of an activity scored “1” targets environmental sustainability, whereas the amount recorded in the database relates to the entire activity.
When calculating shares, use the right denominator.
The score not targeted (score “0”) means that the activity has been screened against, but was found not be targeted to environmental sustainability. But there are activities for which the field is empty. This means the activity has not been marked. (With a view to reducing the administrative burden, some Members have decided to exclude certain activities from their marker systems.) When examining the share of a donor’s aid that targets environmental sustainability, activities not screened against the objective should be excluded.
Watch out! An activity can have more than one principal or significant policy objective. To avoid double-counting, users are advised to prepare statistical presentations on one policy objective at a time.
Guidance for analyses of the tying status of aid
The DAC has worked over the years to promote untying. Discussions about untying more aid have taken place in the context of aid effectiveness. It is generally argued that untied aid is a more efficient way to deliver assistance. By limiting competition, tied aid raises the cost of many goods and services. Moreover, tied aid tends to favour projects that require capital intensive imports or donor-based expertise over smaller and more poverty-focused programmes. Untying is seen as a step towards increased involvement of developing countries in the selection, design and implementation of aid projects and programmes, and therefore more effective partnerships.
The tying status of each DAC member’s aid programme is presented in summary form in the Statistical Annex of the Development Co-operation Report (see Table 23 and Table 24). The monitoring of the DAC tied aid disciplines (1987 and 1992) and the DAC Recommendation on Untying ODA to Least Developed Countries (2001) is based on donors’ reporting to the Aid Activity database.
The Aid Activity database registers information on the tying status of aid at the level of individual activities. Donors report the untied and tied amounts of each activity, though reporting is 50% complete due to difficulties in collecting this information on some types of aid (in particular, free-standing technical co-operation).
Guidance for analyses of the financial terms of aid
Data on the financial terms of aid recorded in the Aid Activity database include the type of flow (grant, grant-like, equity investment, loan) and the terms of repayment of loans (maturity, grace period, interest rate). The latter serve to calculate the grant element of an aid loan and thus verify its ODA eligibility.
The majority of aid activities are financed through grants, but some donors operate substantial loan programmes. The financial terms of ODA for the last two years are presented in summary form in the Statistical Annex of the Development Co-operation Report (see Table 20 and Table 21). In accordance with the 1978 Terms Recommendation of the DAC, the annual average grant element of total ODA commitments should be at least 86% (for Least Developed Countries, the targets are at least 86% over three years for each country, or 90% annually for the group).
Statistical methods and Terminology
The DAC Secretariat assesses the quality of aid activity data each year by verifying both the coverage (completeness) of each donor’s reporting and the conformity of reporting with definitions (so as to ensure the comparability of data between donors). Prior to any statistical analysis, users are advised to examine the “coverage ratios” and other “meta data” available on the website.
Coverage ratios
The coverage ratio measures the comprehensiveness of aid activity data. It indicates the extent to which the data can be exploited in analytical work. High coverage permits an in-depth analysis. Low coverage means that the data, though descriptive, may not present a balanced picture of DAC members’ aid.
Coverage ratios vary over time. The coverage of the data for a specific recipient or sector varies according to the donors and types of assistance involved. When analysing data for the last two decades, the main issue to take into consideration is the progressive improvement in donors’ reporting. But in general data on a commitment basis is of a better quality than based on disbursement.
The completeness of CRS commitments for DAC members has improved from 70% in 1995 to over 90% in 2000 and reached nearly 100% starting from 2003 flows.
As to the analysis on CRS disbursements it is not recommended for flows before 2002, because the annual coverage is below 60%, while it is around and over 90% since 2002 and reached nearly 100% starting with 2007 flows.
Therefore data on commitments before 1995 and disbursements before 2002 are not available in the results table or in the micro data. However if you are still interested in this information it is possible to download it by clicking on the icon ‘Related Files’ bearing in mind that these data may not be complete for some donors.
Other metadata
Metadata give further information on different donors’ reporting. They indicate the original data sources (reporting agencies) and explain any major changes in the reporting practice since 1990. Comments on the consistency of the data with the annual aggregate DAC statistics are also included.
DAC members: Australia, Austria, Belgium, Canada, Denmark, European Commission, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, Norway, Netherlands, New Zealand, Portugal, Spain, Sweden, Switzerland, United Kingdom, United States.
Other donors: World Bank, African Development Bank, Asian Development Bank, Inter American Development Bank, IFAD, UNICEF, other United Nations agencies.
Current vs. constant
Unless otherwise stated, aid activity data are expressed in United States dollars at the exchange rate prevailing in the year of the flow i.e. in current $. Analyses of trends in aid over longer periods should be based on constant $ so as to take account of inflation and exchange rate variations.
The data series in IDS/o are presented both in current and constant dollars. Switch from one to another by changing the “variable” when presenting the results of your query. The deflators in the “variable” box will always convert data to dollars of the value they held in the previous year. For example, if 2005 data are the latest in the database, the deflators will be for 2004 dollars.
You can also convert series “manually” using the DAC deflators. For example, to convert a flow from country X expressed in current dollars in year Y into 1996 dollars, divide it by the 1996-base deflator for country X and year Y.
Purpose of deflators
Deflators convert dollar-denominated data for any year to dollars with the purchasing power they had in a specified base year.
How are deflators calculated and what do they mean?
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Expressing flows in terms of the purchasing power of a United States dollar in a given base year requires two adjustments:
Allowing for inflation in the currency in which the flow occurred between the year of the flow and the base year.
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Replacing the exchange rate at the time of the flow by the exchange rate in the base year.
Example using rounded figures: Germany gave 300m. Deutschmarks (DM) in aid in 1966, when there were 3 DM to the dollar. German aid for 1966 was therefore $100m at the exchange rate current at that time. Now, say we want to express this at 1996 dollars and at the 1996 exchange rate.
Without using deflators, we would have to make the two allowances above. First, inflation: We would find that prices quadrupled in Germany between 1966 and 1996. Next, exchange rate movements: by 1996 there were only 1.5 DM to the dollar. Therefore, DM 300m. in 1966 was worth DM 1200m. in 1996 (4 times 300), and this would be equivalent to $800m (1200 divided by 1.5).
The same result can be achieved using a deflator. A DM in 1996 only bought 0.25 times what it did in 1966 (purchasing power element) and the dollar was worth 0.5 times (1.5 divided by 3) as many DM in 1996 as in 1966 (exchange rate element). The deflator is the product of the two, i.e. 0.25 times 0.5 = 0.125. To express the 1966 flow in 1996 dollars, divide them by the deflator, i.e. $100m. divided by 0.125 = $800m.
For annual exchange rates, the DAC uses the annual averages of daily spot rates against the dollar. For inflation, GDP implicit price deflators for each currency are used, with par set at the base year.
“Total DAC” deflator
DAC publications include a deflator for “total DAC” flows. This is the average of the deflators of individual DAC donors, weighted by each donor’s total ODA. This should only be used to give a rough idea of total aid flows when the currency of some of the flows is not known (e.g. when part of the flows come from the multilateral agencies who may disburse in various currencies). In all other cases, deflators of individual donors should be applied i.e. data for total DAC flows are obtained by adding up the deflated amounts for each DAC donor.
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