ODA: what is it and how does it work?
FAQ 1. How is Official Development Assistance (ODA) measured?
Official development assistance (ODA) is the term used by Development Assistance Committee (DAC) members to refer to what most people would call aid. ODA includes activities carried out with the economic development and welfare of developing countries as their main objective. It is a measure of donor effort, including grants and grant equivalents of concessional loans.
FAQ 2. Who reports data on their development cooperation to the OECD?
The DAC publishes a list of countries and organisations that report to the OECD on their aid and other financial flows to developing countries. The list encompasses DAC members, countries that are not members, and multilateral organisations, as well as several of the largest private philanthropic foundations working for development.
FAQ 3. Which countries are eligible to receive ODA?
FAQ 4. What other kinds of financial flows are available in addition to ODA?
In addition to ODA (both bilateral and multilateral), the DAC collects and publishes data on other official flows (OOF), official export credits and private flows. See our databases and our page on Resource flows to developing countries beyond ODA.
An international Task Force has also developed a new international standard for measuring the full array of resources in support of the 2030 Agenda: Total Official Support for Sustainable Development (TOSSD). It is designed to monitor all official resources flowing into developing countries for their sustainable development, but also private resources mobilised through official means. It measures contributions to international public goods – up to now “invisible” in development finance statistics – that help countries reach their Sustainable Development Goals. See www.tossd.org.
Donors and flows
FAQ 5. What are the different forms of aid and who receives them?
Bilateral aid represents flows from official (government) sources directly to the recipient country.
Multilateral aid represents core contributions from official (government) sources to multilateral agencies which use them to fund their own developmental programmes. Multilateral agencies, such as United Nations agencies, are governed by representatives of governments, unlike non-governmental organisations (NGOs).
A donor can contract a multilateral agency to deliver a programme or project on its behalf in a recipient country: the funds are typically counted as bilateral flows, and often referred to as Bi/Multi. Donor funds channelled through NGOs are also typically counted as bilateral flows.
FAQ 6. What is the difference between multilateral ODA and multilateral outflows?
The term multilateral ODA represents flows from a government to ODA-eligible multilateral organisations. These are also referred to as core contributions as the donor country would typically not specify which projects and programmes are to be funded. Core funds are also used to meet the overheads of multilateral agencies. Multilateral agencies may also receive funds from other sources, such as the general public, or from philanthropy sources.
Outflows from multilateral organisations typically represent their project and programme spending in developing countries. Multilateral outflows are collected and published by the DAC, not only as a means of tracking and providing transparency on the spending of ODA, but also to allow for analyses of such spending.
FAQ 7. How is double counting avoided with regard to money flowing from donor countries into, then out of, multilateral agencies?
Double counting is avoided by being clear about what is being measured. Donors report the following flows to the DAC:
These flows are added together and represent the total official and private flows.
Multilateral organisations report their outflows to the DAC, including details of the recipients such as the country or region. When it comes to calculating the total for a recipient country, the total flows reported by donors are
This method results in more detailed information on the spending of ODA in a given recipient country.
FAQ 8. What is the difference between core (pooled) and non-core contributions to multilateral agencies?
ODA to multilateral development organisations from donor countries is pooled, which makes it an integral part of the recipient institution’s financial assets that can then be used to meet an agency’s running and programme costs. Non-core funding includes instances where the donor specifies how the money is spent.
Statistical terms and reporting issues
FAQ 9. Where can I find a glossary of key definitions and reporting directives?
FAQ 10. What is the difference between ODA flows and ODA grant equivalents?
ODA can take the form of (i) grants, where financial resources are provided to developing countries free of interest and with no provision for repayment, or (ii) soft loans, which have to be repaid with interest, albeit at a significantly lower rate than if developing countries borrowed from commercial banks.
ODA flows: Until recently, grants and loans were valued in the same way: by recording the flows of cash that were granted, or the face value of loans that were lent to developing countries, deducting any repayments on the loans. This “cash basis” or “flow basis” method, has been used to produce ODA headline figures until 2018.
ODA grant equivalent: From 2018 onwards, instead of recording the actual flows of cash between lender and borrower, the headline measure of ODA is based on the loans’ “grant equivalents”. This new way of measuring aid loans aims to better reflect the actual effort by donor countries –and their taxpayers: only the “grant equivalent” of loans is recorded as ODA. The more generous the loan, the higher the ODA value.
For the sake of transparency, ODA flows are still collected and published, in parallel of ODA grant equivalents.
FAQ 11. When are data on aid published, and what is the difference between preliminary and final data?
There are two main data updates each year. In April, high-level (aggregated) figures are published on total ODA by donor countries for the previous calendar year. In December, these figures are updated with detail on how the funds were allocated by recipient country, sector (health, education, etc), geographical region, and income group (least developed, Upper Middle Income, etc). In December, detail is also available right down to individual project level. In addition to these two main updates, partial database updates occur in June and September each year.
FAQ 12. What is country programmable aid?
Country programmable aid (CPA) is the portion of ODA donors programme spent in individual countries, over which partner countries could have a significant say. CPA is much closer than ODA to capturing the flows of aid that go to the partner country, and has been proven in several studies to be a good proxy of aid from DAC donors recorded at country level.
FAQ 13. What is the difference between a commitment and a disbursement?
Commitments measure donors’ intentions and allow to monitor the targeting of resources to specific purposes and recipient countries. They fluctuate as aid policies change, and reflect how donors’ political commitments translate into action. They give an indication about future flows.
Disbursements show actual payments made each year. They show the realisation of donors’ intentions and the implementation of their policies. They are necessary to examining the contribution of donors’ actions to development achievements. They describe aid flows better from the recipient’s point of view.
Analysing the relation between commitments and disbursements can provide useful insights on aid delivery. Commitments are often multi-year and subsequent disbursements spread over several years. In DAC statistical reporting systems, commitments, even if multi-year, are recorded in whole in the year they are signed (the use of moving averages in statistical presentations smoothens the resulting fluctuations). Subsequent disbursements of an earlier commitment are recorded annually, in the years they are transferred from donors to recipients. An increase in aid allocations over time is thus visible in disbursements data only with a few years’ time lag. Consequently, disbursements in one year cannot be directly compared to commitments in the same year, as disbursements may relate to commitments originally recorded in different years.
Discover our databases
FAQ 14. What is the difference between OECD.Stat and QWIDS?
These are two different gateways to the same aid and development related data. OECD.Stat is the OECD’s data warehouse. It contains datasets from across the OECD, including those relating to aid and development which can be found under Themes/Development. QWIDS (Qwery Wizard for International Development Statistics) is a query tool for datasets relating to aid and development. QWIDS is easy to use and automatically selects the best dataset from which to extract data based on the search terms you select.
FAQ 15. What is the difference between the aggregate and individual project data?
The DAC publishes data both at aggregate level (e.g. figures aggregated by donor, recipient, sector, modality, etc), and in the separate Credit reporting System (CRS) dataset at disaggregated individual project level.
To search individual data sets from the DAC and CRS datasets in OECD.Stat, look under Themes/Development then select a dataset. Alternatively, you can use QWIDS and have data extracted automatically from the most appropriate dataset, based on your search terms.
FAQ 16. I see negative disbursement figures when I run a data query – what does this mean?
When calculating net ODA flows, loan repayments are recorded as negative and deducted from ODA and loans. In some cases, loan repayments are higher than new ODA and net ODA will show as a negative number.
FAQ 17. What do the results such as ‘..’ and ‘-‘ and ‘0’ mean?
The symbols used and their meanings are:
1. For datasets viewed in OECD.Stat and using QWIDS:
2. When viewing data on OECD.Stat or using QWIDS:
Viewing the latest year for which data is otherwise available:
.. Data not available (in a particular field)
Viewing early years’ data:
3. Additional symbols applicable to the Development Cooperation Report:
- Nil or not applicable
FAQ 18. Where can I find the CRS data and how can I download it?
Creditor Reporting System (CRS) data on commitments from 1995 and disbursements from 2002 are available for viewing in OECD.Stat and via QWIDS.
Earlier commitment and disbursement data is available for download, but there are gaps in the coverage for some donors and years yet this data is still useful for some analytical purposes, e.g. on ODA loans.
To download CRS data, go to the CRS dataset in OECD.Stat, then use the Export drop-down menu above the data and select Related files. Click on the file name you would like to download. A dialogue box will open at the bottom of the screen with options for what you can do with the file. All CRS text files can be converted to either Excel 2007 or a later version (you need to use the vertical bar ‘|’ as delimiter and none as text qualifier) or any other software which enables the download of files with more than 65,000 rows.
The bulk files enable data users to carry out multi-faceted analysis by filtering different categories such as donor, recipient, purpose and channel.
A text search on the project descriptions provides the data users with further information on the relevant activities, although the quality of results will depend on that of the descriptive information provided by donors.
ODA markers and themes
FAQ 19. What are ODA markers?
Markers are applied to project level data across a number of sectors to help the international community track the inclusion of specific policy objectives in development co-operation activities.
The CRS currently tracks 11 markers, as follows:
Markers can assume three values. They are scored 2 if the policy objective is the principal (primary) objective of the activity. They are scored 1 if the policy objective is a significant (secondary) objective of the activity. They are scored zero if the activity was screened but the policy objective was not identified. Activities can be marked with more than one marker. Different sets of marker data cannot be simply added together without considering overlaps, as this might lead to double counting of projects that support more than one policy objective.
FAQ 20. Can support to COVID19 vaccines be counted in ODA?
Since the emergence of the Covid-19 pandemic, many questions have been raised on whether activities in response to the pandemic can be counted as ODA. Answers are included in the OECD Secretariat's interpretation on eligibility, based on the Reporting Directives, which provide guidance for reporting on 2020 and 2021 ODA .
FAQ 21. Can support to refugees be counted in ODA?
Official support to refugees from an ODA-eligible country can be reported in ODA. The ODA-eligibility rules vary depending on whether the support is provided in ODA-eligible countries or in donor countries:
FAQ 22. Can support to migration be counted in ODA?
Support given to developing countries under projects related to migration can count as ODA. One key element for a programme to be ODA-eligible is to aim primarily to promote development in the recipient country, rather than to address domestic concerns in donor countries. The DAC has agreed in 2022 on principles and criteria to guide ODA reporting in these situations with the goal of preserving the integrity of ODA. Visit our online page for more details about the principles and other frequently asked questions.
If you don’t find the answer to your question above, feel free to write to us at [email protected].