Basic terms

Official Development Assistance (ODA)

Please see the All about ODA section under the Methodology page.

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 humanitarian 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 loans.  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.

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.

A disbursement is the placement of resources at the disposal of a recipient country or agency, or in the case of internal development-related expenditures, the outlay of funds by the official sector. It can take several years to disburse a commitment.

Aid flows are measured on a calendar year basis.

Bilateral and Multilateral Outflows

The Aid Activity database covers DAC Members’ bilateral ODA i.e.

• activities undertaken directly between a donor and recipient or (or executed by a by a national or international non-governmental organisations active in development on behalf of the donor); and
• promotion of development awareness and other development-related spending in the donor country (e.g. debt reorganisation, administrative costs).

DAC Members’ contributions to the regular budgets of the multilateral institutions is excluded when counting bilateral aid.  Details of these contributions (to multilateral institutions) are available in the aggregated DAC statistics under the term Multilateral Official  Development Assistance.

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, some UN agencies and other multilateral agencies. Aid activities from Bill & Melinda Gates Foundation are also included.

Where does aid go?

The Aid Activity database registers information on where aid goes at the level of individual aid receiving countries.  The countries are categorised  as developing countries or territories eligible to receive official development assistance (ODA). (See To be approved.)

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 Region or sub-region (e.g. Africa, Sub-Saharan Africa).  The category: developing countries, unspecified, is used if an activity benefits several Regions.

In the International Development Statistics online databases (IDS/o), users can retrieve data either by selecting one or several individual recipient countries or the pre-defined country groups (Regions or by income group).  It is also possible to define the selection both by Region and income group, for example, Least Developed Countries in 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 etc.  It does not refer to the type of goods or services provided.  Some contributions are not targeted to a specific sector, e.g. general budget 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. There are 26 main sector/purpose categories. Each has a prescribed list of attributes to ensure proper activities are correctly classified. Most of the main sectors then have a number of sub-codes which allows for a breakdown of activities. For instance, the Health sector has three main sub categories (General, Basic and Population & Reproductive health) which between the three have a further 17 sub categories such as research infectious disease control and STD control including hi/aids.

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.

Users can search data by purpose code or sector in the aid statistics database and obtain results either at the level of individual activities or in the form of summary statistics by sector and recipient.

The list of Purpose and other codes is updated regularly. 

What policies does aid support?

1. Guidance for analysis 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, the data collection methodology was revised.  Analysis of the policy objectives on aid should therefore generally focus on aid Committed 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 aid to environment: 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 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).  Analysis 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.

2. Guidance for analyses of the tying status of aid

The DAC has worked over the years to promote untying of aid.  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 Statistics on Resource Flows to Developing Countries (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. 

3. 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 Statistics on Resource Flows to Developing Countries (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).

What type of aid is used?

Types of aid were introduced in DAC/CRS Statistics for reporting of 2010 flows, to distinguish between the various modalities of aid. The presentation of data online now reflects this new aid classification. However, as data prior to 2010 were not reported in line with this typology, a mapping exercise is currently underway in order to complement historical series. Users should be aware therefore that, pending the conclusion of this mapping exercise, data for years prior to 2010 are incomplete.

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” 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.

Current vs. constant

Unless otherwise stated, aid activity data are expressed in United States dollars (USD) at the exchange rate prevailing in the year of the flow i.e. in current dollars.  Analyses of trends in aid over longer periods should be based on constant dollars so as to take account of inflation and exchange rate variations.

The data series in the database are presented both in current and constant dollars.  Switch from one to another by changing the Amount type when presenting the results of your query.  The deflators in the Amount type box will always convert data to dollars of the value they held in the previous year.  For example, if 2011 data are the latest in the database, the deflators will be for 2010 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.

How are deflators calculated and what do they mean?

Deflators convert dollar-denominated data for any year to dollars with the purchasing power they had in a specified base year. 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.
• Replacing the exchange rate at the time of the flow by the exchange rate in the base year.

See also the Information Note on the DAC Deflators for a detailed explanation, including a hypothetical example.

“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.