This chapter outlines how development partners can make poverty and inequality reduction central to their planning and design, from institutional strategies down to individual interventions. It examines how to anchor these as overarching development co-operation goals and to strengthen them through greater policy coherence and engagement in international forums. It sets out how to translate these goals into institution-wide strategies and guidelines grounded in a human rights-based approach and shaped through inclusive consultation. It then explores how strategic design choices shape impact and presents practical tools to embed a distributional lens to intervention design – including context and political economy analysis, policy markers and ex-ante assessments.
OECD Guidance on Reducing Poverty and Inequalities through Development Co‑operation
Abstract
This chapter provides guidance to development partners – bilateral and multilateral providers of development co-operation – on placing poverty and inequality reduction at the core of their strategic planning and intervention design, building on the definitions and interlinkages outlined in Chapter 1.
Ending poverty and reducing inequalities is core to the development co-operation mission. These remain core priorities for low- and middle-income countries (L&MICs) (OECD, 2026[1]) and central across Development Assistance Committee (DAC) members (Guerra et al., 2024[2]; OECD, 2026[3]). Broad public support reinforces this mandate: in a survey conducted in 34 countries in the global North and South, 90% of respondents considered international co-operation important for addressing poverty and inequality (Rockefeller Foundation, 2025[4]). This mandate has also been reinforced by recent global processes: at the UN level, the Fourth International Conference on Financing for Development and the Second World Summit for Social Development both reaffirmed the centrality of poverty and inequality reduction, while at the G20 level, Brazil's 2024 presidency led to the launch of the Global Alliance Against Hunger and Poverty, and South Africa's 2025 presidency commissioned an Extraordinary Committee of Independent Experts on Global Inequality, whose report recommended the creation of an International Panel on Inequality.
Despite this strong mandate, development partners face a number of challenges in maintaining a clear and consistent focus on these goals.
The proliferation of development objectives – economic development, climate resilience, peace and security, and global stability – can dilute attention and lead to mission drift.
Although solidaristic rationales centred on poverty reduction and equity remain prominent among DAC members, they are increasingly more explicitly complemented by interest-based narratives linked to trade, investment, security and migration (OECD, 2026[5]).
Unprecedented reductions in official development assistance (ODA) have further intensified debates about clarity of purpose and sharper targeting, even as questions remain over whether incremental adjustments or more transformative reforms are needed (CGD, 2025[6]; Gulrajani, 2026[7]).
“Policy evaporation” – where focus weakens as development partners move from strategy to implementation – risks undermining even clearly stated commitments, in part because poverty and inequality objectives are not adequately integrated into operational strategies and tools (Guerra et al., 2024[2]).
The common assumption that development co-operation, by its nature, automatically contributes to poverty and inequality reduction persists. In practice, however, not all interventions generate inclusive or distributionally equitable outcomes; and without deliberate attention to these issues, they may overlook those furthest behind or fail to address the structural drivers of exclusion.
To counter these risks, this chapter highlights the importance of having explicit poverty and inequality reduction goals, strategies, frameworks, guidelines and tools to sustain attention across institutions and throughout the policy and programming cycle, while acknowledging that these approaches vary depending on development partners’ institutional mandates and comparative advantages, as well as on partner countries’ contexts and priorities. Section 2.1 focuses on setting direction through overarching goals. Section 2.2 then outlines how to translate these goals into institution-wide strategies and guidelines. Section 2.3 examines the design considerations that will shape the poverty and inequality reduction impact of development partners’ strategies and interventions. Finally, Section 2.4 sets out practical tools to inform and equip the design of interventions.
This section examines how development partners can make poverty and inequality reduction overarching goals of their development co-operation. It first outlines how these interconnected objectives can be established at the highest level, whether in law or in policy frameworks. It then considers how synergies and trade-offs with other development priorities can be made explicit and why greater coherence across development partners’ domestic and international policies matters for social outcomes. Finally, it considers how these goals can be elevated in international forums that set the development co-operation agenda.
2.1.1. Establishing poverty and inequality reduction as core and interconnected goals
Establishing poverty and inequality reduction as foundational goals of development co-operation at the highest level signals political commitment and clarifies its purpose for partners and staff. Depending on development partners’ legislative and governance frameworks, these goals can be enshrined in development co-operation laws or stated in overarching policy documents. Enshrining them in law (see Box 2.1) supports long-term direction and continuity over time. In some cases, goals are attached to quantitative allocation targets to steer resources (see Section 3.1.6). These goals can sometimes also be reflected indirectly. This might be through an overarching “leave no one behind” (LNOB) commitment; priorities related to specific dimensions of poverty and inequalities (e.g. “human development”) or specific types of inequalities (e.g. gender equality or disability inclusion); or a focus on contexts where these challenges are most acute (e.g. least developed countries or humanitarian settings). Making it explicit that these priorities are integral to poverty and inequality reduction efforts strengthens clarity of purpose.
The case for these goals rests primarily in solidarity and human rights, but also on shared long-term interest. They are grounded in a recognition that tackling poverty and inequalities is fundamentally a question of justice and human rights, including the rights to an adequate standard of living, equal opportunity and participation. At the same time, having more prosperous and equal societies in partner countries also serves the long-term interests of provider countries, through greater stability, growth and resilience. Such shared interest arguments warrant care, however. They can obscure significant power asymmetries and unequal terms of engagement between provider and partner countries. Within countries, they risk being captured by elite interests rather than genuinely reflecting the priorities of the most marginalised and deprived (see Chapter 4).
Articulating how poverty and inequality reduction goals relate to one another is essential for strategic coherence – whether by framing inequality reduction as a means to accelerate poverty reduction, or by treating both as joint objectives in their own right.
Articulating how poverty and inequality reduction goals relate to one another is essential for strategic coherence. While some development partners place greater emphasis on one or the other – reflecting varying mandates, policy traditions and operational priorities – it is important to acknowledge that these objectives are deeply interconnected. Poverty reduction is inherently shaped by distributional dynamics and progress depends not only on overall gains but also on how these gains are shared across populations (see Chapter 1). This can be reflected in different ways when setting goals, for example by framing inequality reduction as a means to accelerate poverty reduction or by treating both as joint objectives in their own right.
Finally, ensuring goals are grounded in analysis of the global context can support more strategic and evidence-based approaches. Data and analysis on global poverty and inequalities – for instance from the biannual World Bank Poverty, Prosperity and Planet Report, the annual UN Human Development Report and the periodic UN World Social Report – can help development partners identify where poverty and inequality challenges are currently most acute, where they are projected to be concentrated in the future, and how they are being shaped by trends such as demographic shifts, climate change and digitalisation. Complementing these with foresight exercises helps ensure that overarching objectives remain forward looking, relevant and responsive to evolving global dynamics. Global context analysis can also inform decisions on resource allocation (see Chapter 3) and guide the design and implementation of interventions in combination with national and subnational context analysis (see Section 2.4.1).
Portugal’s commitment to eradicating poverty and combatting inequalities
Portugal’s development co-operation law establishes that the overall mission of Portuguese co-operation is to eradicate poverty, combat inequalities, and promote sustainable, equitable and inclusive global development, based on respect for human dignity and leaving no one behind (Government of Portugal, 2022[8]). It integrates a needs- and rights-based approach with a focus on the most vulnerable, which requires combating discrimination and inequalities. Grounded in a rationale of peace and solidarity, it prioritises Portuguese-speaking African countries and Timor-Leste.
Spain’s focus on fighting inequalities as a first principle of its co-operation
The Spanish Law on Co-operation for Sustainable Development and Global Solidarity establishes the fight against inequalities as the “first basic principle” of Spanish co-operation and commits to promoting sustainable human development by combatting poverty and inequality in all their dimensions, leaving no one behind (Government of Spain, 2023[9]). The main goal of Spain’s Master Plan for Sustainable Development and Global Solidarity 2024-2027 is the promotion of social, economic and ecological transitions that reduce or eradicate inequality (Government of Spain, 2024[10]). The Plan commits to mainstreaming the fight against inequalities by promoting inclusive and sustainable societies to end the inter-generational transmission of poverty. Spain considers inequality reduction as a lever for implementing Agenda 2030’s pledge of LNOB and SDGs 1 and 10, grounded in the human rights principles of equality and non-discrimination (AECID, 2024[11]).
2.1.2. Making synergies and trade-offs explicit between poverty and inequality reduction goals and other objectives
Articulating synergies
When juggling multiple development objectives, articulating how poverty and inequality reduction also contributes to other goals can help sustain political support and maximise synergies. Table 2.1 illustrates how poverty and inequality reduction underpins progress across a range of objectives. For example, more equal societies tend to be more cohesive and stable: high levels of inequality have been associated with political polarisation, democratic backsliding and conflict, particularly where inequalities align with identity-based divisions or concentrate power among elites (Rau and Stokes, 2025[12]; OECD, 2025[13]). More equitable societies are also more resilient as they can absorb and recover from shocks better where risks and resources are more evenly distributed and institutions more inclusive. However, this articulation works best as a complement to, not a substitute for, a foundational commitment to these goals in their own right. Framing poverty and inequality reduction solely as a means to an end risks undermining their intrinsic value and creating confusion over purpose (OECD, 2026[14]).
Ireland’s overarching goal of “reaching the furthest behind first”
Reaching the furthest behind first is the overarching frame of Ireland’s international development policy, A Better World (Government of Ireland, 2019[15]). The policy interprets “furthest behind” as reflecting multiple forms of discrimination and disadvantage, requiring an intersectional approach to addressing them. It clarifies how Ireland’s four policy priorities – gender equality, humanitarian assistance, climate action and governance – are key for directing their development co-operation to the furthest behind first.
The World Bank’s goals of ending extreme poverty and boosting shared prosperity on a liveable planet, with a renewed focus on jobs
As early as 2013, the World Bank Group established a clear mission articulated around its dual commitment to ending extreme poverty and promoting shared prosperity. Since 2023, its mission statement is to “end extreme poverty and boost shared prosperity on a liveable planet”, explicitly linking poverty and inequality reduction goals with the objective of tackling the climate and biodiversity crises. Its Scorecard outlines “vision indicators” for each of these three overarching goals, which provide high-level measures to assess the direction and speed of progress (World Bank, 2024[16]). It has also identified policy priorities across these three goals depending on where the poor and vulnerable live and where CO2 emissions are and will be generated (World Bank, 2024[17]). Its framework for assessing the welfare impacts of climate action sets out two principles to guide climate policy decisions: i) prioritise triple- and double-win policies; and ii) identify and minimise costs to households in poverty (OECD, 2024[18]). Since 2025, the World Bank has placed jobs at the centre of its development approach, explicitly framing job creation as a key pathway to reducing poverty and promoting inclusive growth.
Clarifying how other objectives relate to poverty and inequality reduction can strengthen overall coherence, making goals mutually reinforcing. For instance, aid-for-trade can be explicitly oriented towards narrowing prosperity gaps between countries by supporting the integration of least developed countries in global value chains, and expand opportunities for small and medium-sized enterprises, women and smallholder farmers thereby reducing deprivation and disparities within countries (OECD/WTO, 2024[19]). Aid-for-trade contributions to poverty and inequality reduction can be further reinforced through complementary measures such as supporting social dialogue and workers’ bargaining power to ensure low-paid workers benefit from trade expansion, and re-skilling workers and social protection for those adversely affected. UNCTAD research also suggests that the poverty-reducing effects of trade vary with country characteristics, such as life expectancy, government effectiveness, share of urban population, share of wage workers, GDP per capita, domestic credit, internet usage and mineral rents, underlining the value of tailoring trade support to context (Osakwe and Solleder, 2025[20]).
Making trade-offs explicit
Although synergies can often be identified, they cannot be assumed and trade-offs may, in some cases, favour other goals. For example, climate mitigation investments may not primarily benefit the poorest countries, growth-oriented support may exacerbate inequalities and geopolitically driven allocations may bypass contexts with the greatest needs. Making such trade-offs explicit when setting goals and assessing them with an equity lens is important to ensure that the pursuit of other objectives does not come at the expense of the most marginalised. It is also important for limiting mission drift and strengthening clarity of purpose – both for partners in L&MICs and taxpayers in provider countries.
Considering trade-offs when setting goals requires institutional commitment across all entities involved in development co-operation – development ministries, agencies and development finance institutions. It also requires analytical frameworks that can systematically identify distributional implications and guide allocation decisions, however such frameworks remain nascent within development co-operation. The operational implications of these choices when designing interventions and allocating resources are explored further in Sections 2.4.3 and 3.1.
Strengthening coherence with policies beyond development co-operation
Development co-operation cannot achieve sustained progress on poverty and inequalities if provider countries’ domestic and other international policies are pulling in the opposite direction. Policies across a wide range of areas can generate significant spillover effects – positive and negative – that shape poverty and inequalities globally, often in more systemic ways than development co-operation itself. These areas include taxation, trade and investment, agriculture, climate and environment, financial regulation, migration and technology.
Development co-operation cannot achieve sustained progress on poverty and inequalities if provider countries’ domestic and other international policies are pulling in the opposite direction.
In the fiscal sphere for instance, negative spillovers include multinational enterprises exploiting gaps and mismatches between different countries’ tax systems, costing developing countries USD 100-240 billion in lost revenue annually (OECD, n.d.[21]). On the positive side, efforts to strengthen international tax co-operation and transparency – such as the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting and the Automatic Exchange of Information standard – have enhanced L&MICs’ capacity to combat tax evasion and mobilise domestic resources (OECD, 2023[22]; OECD, 2024[23]). In the artificial intelligence (AI) sector, advances driven largely by high-income countries can enhance productivity and expand access to services in developing contexts, but may also widen digital divides, displace or degrade jobs and generate significant environmental costs (Muldoon, 2024[24]; Fleming and Su, 2025[25]). Strengthened international co-operation on AI governance, standards and capacity building is therefore vital to maximise benefits while mitigating risks for L&MICs and people facing poverty.
The OECD Council Recommendation on Policy Coherence for Sustainable Development (PCSD) recognises the importance of integrating poverty reduction into policy coherence efforts (OECD, 2019[26]). It highlights the need to promote mutually reinforcing actions, manage trade-offs across the Sustainable Development Goals (SDGs) and address the cross-border and long-term impacts of policies on developing countries. This entails systematically applying a poverty, gender and human rights perspective to PCSD frameworks; strengthening institutional mechanisms to manage policy interactions across sectors and levels of government; and developing adaptive tools to assess and address the economic, social, gender and environmental impacts of policies, both domestic and cross-border, on developing countries.
Development partners can help improve policy coherence for poverty and inequality reduction in several ways. They can invest in research on the distributional impacts of cross-border spillovers and support the development and use of operational tools to screen and assess spillovers across policy domains. For example, recent research has looked at the positive and negative impacts of five international flows (financial, trade, movement of people, environmental flows and knowledge transfers) (OECD, 2021[27]). Other research has considered specific dimensions such as the impact of trade on income inequalities and employment (Alsamawi et al., 2017[28]) or on labour exploitation in global value chains (OECD et al., 2019[29]). However, operational tools remain in their infancy and are often underused or siloed by dimension. Development partners can also strengthen the capacity of partner countries and civil society to engage in international negotiations and rule-setting, helping ensure that global policies better reflect the priorities of those furthest behind.
2.1.3. Elevating poverty and inequality reduction goals in international development co-operation forums
Development partners can foster collective action for poverty and inequality reduction by actively and strategically engaging in global policy forums. Participation in spaces that set development co-operation norms and standards, shape development priorities, provide platforms for peer learning and dialogue, and influence financing and governance decisions offers important opportunities to embed poverty and inequality considerations across policy processes (Danida, 2022[30]; MFA Finland, 2023[31]).
This includes engagement in multilateral forums. The United Nations has anchored these objectives in universal commitments such as the 2030 Agenda and the SDGs. The G7 and G20 shape global governance priorities and have increasingly addressed poverty and inequalities in recent presidencies, while the OECD DAC shapes members’ development co-operation policies and practices.
Development partners can also use their board participation and funding to shape the priorities of international financial institutions and multilateral and regional development banks. These institutions play a central role in poverty and inequality reduction through their financing and analytical work. Key vehicles include the World Bank’s International Development Association (IDA) and the IMF’s Poverty Reduction and Growth Trust.
Germany’s experience in influencing multilateral co-operation to tackle inequality
Germany engages in strategic influencing to encourage multilateral development banks to better target their investments and analytical work on achieving a socially just economic transformation. For example, it advocates for the IDA – which supports the world’s poorest countries – to continue focusing on addressing inequality in partner countries. It also helped secure the inclusion of indicators like the Gini coefficient in the World Bank's monitoring to track progress against inequality (BMZ, 2023[32]).
Finland’s use of multilateral engagement to advancing equality and rights
Through long-term strategic engagement, core funding and dedicated influencing capacity, Finland’s Ministry for Foreign Affairs has used its participation in multilateral processes to promote more ambitious and effective policies on gender equality, disability inclusion and human rights, strengthening their integration into global frameworks and monitoring systems. For example, it played a central role in advancing and securing consensus on the UN Committee on World Food Security’s Voluntary Guidelines on Gender Equality and Women’s and Girls’ Empowerment. It also contributed to strengthening the implementation and monitoring of UN Security Council Resolution 1325 on Women, Peace and Security, and supported the integration of disability rights into humanitarian principles. It has also influenced the World Bank’s gender strategy to better reflect a human rights-based approach. These efforts show how combining political engagement, technical expertise and sustained multilateral presence can advance equality objectives within multilateral institutions (OECD, 2025[33]).
As traditional multilateral settings face growing geopolitical tensions and fragmentation, development partners can advance poverty and inequality reduction by building more flexible, issue-based coalitions. Collective action is increasingly driven by coalitions of like-minded actors aligned around specific priorities, bringing together states, multilateral organisations, the private sector and civil society in more adaptive and inclusive forms of collaboration (Klingebiel, Sumner and Ishmael, 2025[34]). Box 2.4 describes some notable recent initiatives by coalitions and platforms that support co-ordination. Beyond these, the International Panel on Inequality aims to create a global, science-based platform dedicated to understanding and addressing inequality worldwide, modelled on the Intergovernmental Panel on Climate Change. Alliances dedicated to advancing economic development driven by well-being and human rights are also gaining momentum, as illustrated by the Beyond GDP Global Alliance (OECD, 2025[35]), which promotes the embedding of multidimensional development metrics into international co-operation and financing frameworks and the UN Beyond Growth Community of Practice.
The OECD DAC Community of Practice on Poverty and Inequalities
Established in 2021, the Community provides a platform for peer learning and exchange for DAC members and the broader development community, including partner country governments, other bilateral providers, multilateral organisations, civil society and academia. By facilitating dialogue, sharing evidence and highlighting good practice, it supports more coherent approaches to tackling poverty and inequalities across development co-operation programmes, including through the development of this Guidance (OECD, n.d.[36]).
The Global Alliance against Hunger and Poverty
Launched during Brazil’s G20 presidency, this Alliance aims to accelerate progress towards eradicating hunger and poverty while reducing inequalities. It helps build partnerships and mobilise both financial and knowledge resources to support the implementation of country-driven and context-specific policy solutions. Its “policy basket” – an evolving menu of evidence-based policy instruments across areas such as social protection, access to basic services, food systems, employment and fiscal reform – is designed to prioritise measures that effectively reach people experiencing poverty and hunger. Adaptable to national and subnational contexts, it helps ensure that development partners’ investments are targeted towards high-impact, cost-effective initiatives. By promoting the pooling of resources and expertise, the Alliance aims to increase impact and efficiency while streamlining the identification of knowledge gaps, funding needs and opportunities. This approach enables integrated, multisectoral strategies while reducing fragmentation and duplication (GAHP, 2024[37]).
The Global Alliance Against Inequality
This global coalition of the willing aims to address the inequality emergency through multilateral action. Initiated in June 2025, its current member states are Czechia, Germany, Norway, Ireland, Italy, Sierra Leone and Uruguay (Pathfinders, n.d.[38]). The initiative is further supported by many international partner organisations and hosted by Pathfinders for Peaceful, Just and Inclusive Societies. Rather than a formal institutional body, it functions as a flexible platform for strategic political engagement, bringing together governments, multilateral bodies and civil society organisations to position inequality reduction as a core priority in multilateral processes and the post 2030 debate, and expand practical, evidence-based policy solutions (Pathfinders, n.d.[39]).
The Global Accelerator on Jobs and Social Protection for Just Transitions
This platform, chaired by the International Labour Organization (ILO), brings together governments, UN agencies, development partners and social partners to support country-owned roadmaps for expanding decent jobs and universal social protection. By combining evidence on the role of social investment in inclusive growth with policy dialogue and technical support, the initiative helps countries identify concrete policy solutions and financing options to address challenges such as climate change, informality, demographic change and digitalisation. Through national steering committees chaired by governments and joint financing frameworks, the Accelerator mobilises and aligns financing behind national priorities, while promoting multilateral collaboration, South–South exchange and evidence-based advocacy (ILO, 2025[40]).
By supporting partner governments and civil society to engage in international policy processes, development partners can help ensure that global decision making better reflects the perspectives of those most affected by poverty and inequalities. This includes strengthening the capacity of these actors to prepare for and participate effectively in international negotiations, through technical assistance, financial support and facilitation. Such efforts can help address imbalances in voice and influence and contribute to more inclusive and representative global governance. Fostering diverse participation in policy dialogue is essential to ensure the priorities of those facing discrimination get heard, including women, younger people and ethnic or racial groups.
Integrating poverty and inequality reduction objectives into development co-operation laws and overarching policies encourages their uptake across different levels of strategies and operations. However, this approach alone may not be sufficient to avoid “policy evaporation”, whereby focus weakens as development partners move towards implementation (Guerra et al., 2024[2]; Meeks, unpublished[41]). Setting out explicit, institution-wide poverty and/or inequality reduction strategies or frameworks, supported by operational guidelines, is therefore essential for translating high-level goals into action and impact. These help sustain attention across the institution and throughout the policy and programming cycle.
This section sets out key considerations for development partners in establishing such strategies and frameworks. It covers how a twin-track approach – combining mainstreaming with standalone initiatives – can be applied; and it underscores the importance of grounding strategies in a human rights-based approach (HRBA). It then examines how different types of strategies – whether comprehensive or specific – can be tailored to institutional priorities, comparative strengths and partner country needs, while noting that broader coverage across poverty and inequality dimensions supports more coherent action and reflects their multidimensional and intersectional nature. Finally, it highlights the importance of inclusive engagement with partners in shaping these strategies.
2.2.1. Adopting a twin-track approach to poverty and inequality reduction
Adopting a twin-track approach means combining dedicated initiatives that directly target poverty and inequalities with efforts to mainstream these objectives across development partners’ strategies, policy frameworks, interventions, policy dialogue and organisational structures and culture.
Targeted actions are initiatives where poverty and inequality reduction is the principal objective. They aim to provide focused support to marginalised groups and tackle structural barriers that perpetuate poverty and inequalities. These may include programmes promoting gender equality, disability inclusion, child poverty reduction or policies addressing income inequality and spatial disparities.
Mainstreaming involves integrating poverty and inequality analysis and objectives into all strategies and interventions, including those primarily pursuing other goals such as climate mitigation or trade. This typically includes applying poverty and inequality analysis in context assessments, incorporating poverty and inequality objectives into programme design, using poverty- and inequality-sensitive indicators in monitoring and evaluation, and addressing internal institutional barriers – such as staff training, leadership commitments and organisational incentives. These approaches are discussed throughout this Guidance.
The two tracks are complementary and mutually reinforcing, and neither is sufficient on its own, as highlighted by existing guidance on tackling poverty (OECD, 2001[42]), addressing income inequality (EC, 2021[43]) and promoting gender equality through development co-operation (OECD, 2022[44]). Targeted initiatives without mainstreaming may remain isolated or limited in scale. Mainstreaming without targeted actions risks becoming too diffuse and becoming a compliance exercise. In the gender policy sphere, this has been referred to as gender “washing” (Development Intelligence Lab, 2026[45]), where explicit attention to gender inequality is diluted, objectives are treated superficially and structural drivers are insufficiently addressed. This is a particular risk in contexts where equality agendas face resistance, are deprioritised, or are reframed in ways that weaken their transformative intent (Harper, 2026[46]).
Targeting and mainstreaming poverty and inequality reduction are complementary, neither is sufficient alone. One without the other risks isolated, limited-scale action, or a diffuse compliance exercise.
2.2.2. Anchoring strategies in a human rights-based approach
Grounding strategies in a human rights-based approach is essential. As the UN Office of the High Commissioner for Human Rights (OHCHR) notes, “no social phenomenon is as comprehensive in its assault on human rights as poverty”, eroding economic and social rights – including health, food, clean water and education – as well as civil and political rights including political participation and personal security (OHCHR, n.d.[47]). Poverty both reflects and reinforces the denial of human rights, while unequal access to rights perpetuates poverty and inequalities (see Chapter 1).
HRBA places human rights principles, legal obligations and accountability at the heart of development programming. Its six guiding principles are: i) participation; ii) links to human rights standards; iii) accountability; iv) equality and non‑discrimination; v) empowerment and capacity development; and vi) transparency. The principle of equality and non‑discrimination recognises that marginalised groups are not homogenous, but experience layered, overlapping barriers that impede their rights (UNDP, 2025[48]).
In practice, HRBA frames people experiencing poverty and inequalities as rights-holders and requires that international human rights standards guide decisions, priorities and solutions. It provides a rationale for more sustainable and equitable development because it exposes the power imbalances that underpin many development challenges and encourages solutions that address root causes rather than symptoms. By incorporating systems thinking and lived experiences, HRBA helps reveal how discrimination, social norms, institutions and policies interact to produce inequalities. Engaging both duty-bearers and rights-holders – across governments, civil society, communities and the private sector – enables a whole‑of‑society approach and makes development more people‑centred, equitable and effective. HRBA is also essential for ensuring the meaningful participation and empowerment of people experiencing poverty and inequalities in development processes (see Section 4.3).
HRBA helps advance politically sensitive issues by using internationally agreed human rights recommendations as legitimate starting points to create political space for dialogue and action. It also reinforces states’ political and legal commitments by clarifying their duties as duty-bearers and offering technical support to apply human rights standards in practical, country‑specific ways.
2.2.3. Defining strategy scope: Coverage, tailoring and intersectionality
Given the multidimensional and interconnected nature of poverty and inequalities, strategies should strive to broaden coverage across dimensions where possible, while tailoring their scope to institutional priorities, comparative strengths and partner country needs. Strategies may prioritise poverty reduction, inequality reduction or both, and may focus on specific forms or dimensions. They can be comprehensive frameworks addressing multiple dimensions, targeted strategies focusing on specific forms or sector-specific guidance (see Table 2.2). Those prioritising poverty reduction tend to focus on lifting individuals and households above minimum thresholds of deprivation; those prioritising inequality reduction place greater emphasis on reducing disparities and addressing structural drivers of disadvantage.
In practice, however, coverage across dimensions of poverty and inequalities has not been even across development partners’ strategies (Guerra et al., 2024[2]):
While poverty reduction is generally recognised as an overarching goal across the DAC membership, few explicitly set out how they aim to achieve it through dedicated strategies or frameworks.
Gender equality strategies are the most widely established and have, to date, been an important vehicle for embedding gender equality as a central policy priority (OECD, 2022[44]).
Despite their prevalence, other forms of horizontal inequalities receive uneven and more limited attention, although some development partners are moving towards a more integrated treatment of gender and other inequalities. Among group-based inequalities, those affecting persons with disabilities receive relatively more attention (see Box 2.5).
Despite mounting evidence that vertical inequality is a significant driver of poverty – and can exacerbate other forms of inequalities – dedicated strategies and frameworks in this area have only recently begun to emerge.
Grounding strategies in a clear understanding of how poverty and inequalities interconnect helps avoid fragmented approaches and overlooking key drivers of exclusion. Poverty alleviation and inequality reduction are closely interlinked in practice: sustained progress on one depends on addressing the other (see Chapter 1). Even for more focused strategies prioritising specific dimensions, placing them within a broader analytical framework that recognises how different forms of deprivation and inequalities interact can help ensure that drivers of exclusion are not overlooked and that no groups are left further behind. Where possible, expanding coverage across dimensions supports more coherent action and better reflects the multidimensional nature of poverty and inequalities.
Taking an intersectional approach across strategies is essential to reach those furthest behind and address the structural drivers of their exclusion. Intersectionality recognises that individuals experience multiple, compounding forms of disadvantage – shaped by race, ethnicity and national origin, minority or indigenous status, faith/religion, socioeconomic status, education level, class, caste, geographic location, age, ability, sexual orientation, gender identity and sex characteristics, or migration status. These interact to influence individuals’ rights, resources, opportunities and resilience.
An intersectional approach that recognises how multiple, compounding forms of disadvantage shape individuals' experiences is essential to reaching those furthest behind, yet it remains only partially embedded in development partners' policies and programmes.
While development partners are increasingly adopting intersectional practices – most commonly at the intersections of gender and disability, or gender and LGBTIQ+ rights – further efforts are needed to embed and operationalise them more holistically and systematically across policy and programming cycles and institutional practices (OECD, 2024[59]; UN Women, 2021[60]). Practical steps include collecting and using disaggregated data that capture intersecting inequalities, applying intersectional and participatory context analysis and designing programmes that address the structural drivers of exclusion while amplifying the voices and leadership of those most affected.
Strategies and guidelines are only as effective as their translation into institutional processes and resource allocation. Ensuring that poverty and inequality objectives are reflected in financial allocations (see Chapter 3) and supported by adequate technical expertise and institutional incentives (see Section 5.4), is critical to moving from declaratory commitments to effective operationalisation.
Around 16% of the world population – about 1.3 billion people – live with a significant disability, with the prevalence higher in developing countries (WHO, 2022[61]). Persons with disabilities are more likely to face limited education, poorer health, lower employment rates and greater poverty, compounded by restricted opportunities, lower incomes and the extra costs of living with a disability. Poverty, in turn, can increase people’s risk of disability through malnutrition, inadequate health care, unsafe work and poor living conditions (World Bank, 2025[62]).
Several development partners – including Australia, Finland, Italy, Norway, Spain, the United Kingdom and the World Bank – have developed comprehensive disability inclusion strategies (DFAT, 2024[63]; MFA Finland, 2018[64]; Government of Italy, 2018[65]; MFA Norway, 2022[66]; AECID, 2018[67]; FCDO, 2022[68]; World Bank, 2022[69]). Common approaches include: i) using a twin-track approach to mainstreaming disability inclusion; ii) grounding the strategies in a human rights-based approach that frames disability not just as a welfare concern but as a matter of rights and justice; iii) applying “continuum thinking”, i.e. from doing no harm to more transformative change; iv) using a disability inclusion marker, such as the DAC’s marker (see Section 2.4.4 and Table 2.7), to track interventions’ focus on the issue; v) meaningfully engaging with and empowering persons with disabilities and organisations of persons with disabilities as partners, in a range of capacities: leaders, decision makers, experts, implementing partners and participants; vi) advancing political dialogue and advocacy to raise the profile of the disability rights agenda globally; and vii) building disability-sensitive monitoring, evaluation and accountability frameworks to make needs visible and track progress.
Despite deliberate efforts, challenges persist in the implementation of such strategies. Physical, digital or institutional barriers still widely limit the ability of persons with disabilities to fully participate in and benefit from development. Inclusion in humanitarian responses also remains limited, despite persons with disabilities being most at risk. Finally, disability data and use of tools such as markers remain limited, which undermines transparency and effective targeting (Sightsavers, 2024[70]).
2.2.4. Shaping strategies with partners through inclusive engagement
Shaping poverty and inequality strategies through inclusive engagement with a range of partners improves context specificity, legitimacy and alignment with partners’ priorities. Whole-of-society engagement encompasses governments, civil society, trade unions, academia, the private sector and other development actors. It can take place at headquarters, regional and partner country levels through formal and informal mechanisms such as advisory groups, workshops, interviews and community dialogues. Such engagement is most effective when approached in a spirit of genuine and respectful partnership rather than as a procedural requirement, and when it extends beyond the initial design stage – with regular reviews to keep strategies responsive to evolving priorities.
Engagement with partner country governments at national and subnational level is paramount (see Section 4.1). Given their primary responsibility for reducing poverty and inequalities through law and policy, aligning development partners’ strategies with country-led priorities and systems is essential for relevance and sustainability. Country-level engagement can also provide valuable inputs into regional and institutional strategies, helping ensure that institutional priorities are grounded in partners’ realities.
This can be complemented by deliberate outreach to civil society actors and people experiencing poverty (see Sections 4.2 and 4.3). Their perspectives are essential for understanding lived realities, identifying immediate needs and structural barriers, and helping ensure that no one is left behind. Such engagement can also help surface priorities that might otherwise be overlooked and strengthen the relevance and responsiveness of development partners’ strategies.
Australia’s approach to shaping country and regional strategies with partners
The Department of Foreign Affairs and Trade’s (DFAT) Development Partnership Plans outline shared development priorities between Australia and its partners at both country and regional levels and include a focus on well-being, inclusion and equity (DFAT, 2025[71]). Consultation processes underpinning these plans are far-reaching, involving governments, civil society, business, academia and other local actors.
Their form varies depending on context, spanning consultations co-ordinated with the national government through workshops and roundtables, embassy-led bilateral talks among senior officials, targeted dialogues with civil society organisations (CSOs), trade unions and diaspora groups, dialogue through existing forums, and opportunities for government partners to review and approve the final plan.
The Plans come with a commitment to ongoing dialogue and engagement with government and non-government actors in the spirit of genuine and respectful partnership. This includes a mid-cycle review to reflect on progress with partners, make adjustments and ensure that the plans remain responsive to emerging priorities. The Development Partnership Plans also provide useful tools to “feed up” country-level inputs into regional and overarching corporate strategies and allocation decisions.
The United Kingdom’s consultation with African partners to inform its Approach to Africa
The Foreign, Commonwealth and Development Office’s (FCDO) new Approach to Africa was launched in December 2025 by the Minister for International Development and Africa (FCDO, 2025[72]). It was informed by a five-month consultation which engaged governments, civil society, diaspora communities, trade unions, businesses, think tanks and academics, and multilateral institutions across African countries, the United Kingdom and globally.
A consultation summary was made publicly available. One of the key overarching messages was that African nations and citizens want respectful, long-term relationships that deliver real change for people’s lives. Specific themes included: the need for quality jobs and inclusive growth; tackling gender inequality and empowering women and others marginalised in the economy; the need to target climate support to the poorest countries, communities and individuals; the importance of human capital; and a stronger African voice in the multilateral system.
The consultations contributed to shaping the final Approach which, among other things, commits to: strengthening systems for human capital and inclusive growth; tackling violence against women and girls and progressing gender equality; and championing African voices in global decision making. The Approach is underpinned by a commitment to inclusive and respectful partnerships in Africa – with African leadership at the centre.
Effective poverty and inequality reduction requires attending to a set of cross-cutting considerations that shape impact at both the strategic and intervention level. These comprise time horizons and sustainability, transmission mechanisms and depth of change, and scope and coverage. They apply across development partners’ portfolios and all types of intervention or delivery channel – whether financial or technical support is provided through governments, civil society or private sector actors.
These considerations are best understood not as distinct or competing choices, but as overlapping and mutually reinforcing elements of context-specific approaches to change. In practice, immediate and direct interventions play a critical role in addressing urgent and severe needs. Meanwhile longer-term and more transformative pathways tend to combine indirect transmission mechanisms, structural interventions and systems-oriented approaches – and are most likely to support sustained exits from poverty and inequality.
Development partners may therefore need to make strategic choices about where to place emphasis, reflecting partner country priorities, constraints and opportunities, as well as their own mandates, comparative advantages and risk appetites. In view of the long-term objective of achieving poverty-free and equal societies, this points toward prioritising sustained, politically informed and systems-oriented investments that enable transformational change, while using shorter-term and more targeted interventions to mitigate immediate deprivations and discrimination. This framing can also help inform co-ordination across development partners, so that different strategies and interventions remain complementary and collectively support coherent pathways to change.
2.3.1. Considering time horizons and sustainability in strategic design
Temporality: Balancing short-, medium- and long-term approaches
Achieving both short-term results and sustained progress requires combining strategies and interventions that address immediate needs with investments that yield longer-term gains. At the strategic level, this means development partners ensuring their portfolios balance immediate relief with longer-term structural support. At the intervention level, it means designing programmes that sequence actions to build on each other over time. For example, in agricultural-dependent economies, development partners can support poverty-reducing growth through investments in agricultural productivity and rural incomes to reduce extreme poverty in the short term alongside investments in industrial development and the expansion of higher-productivity sectors, enabling longer-term economic transformation and upgraded integration into global value chains (Carter et al., 2024[73]). Development partners can also support governments and other partners in strengthening resilience by combining interventions that enable timely responses to shocks (e.g. shock-responsive social protection, contingency financing and adaptive delivery systems) with investments that reduce long-term vulnerabilities (e.g. economic diversification, human capital development and institutional capacity).
Finding this balance is especially pressing as rising humanitarian needs coincide with shrinking ODA budgets, sharpening the trade-off between responding to immediate crises and investing in the resilience that will prevent needs from growing further. The OECD DAC Recommendation on the Humanitarian-Development-Peace Nexus (OECD, 2019[74]) calls for prevention and investment in development to be prioritised wherever possible, while continuing to meet immediate humanitarian needs. This includes strengthening national and local capacities so that humanitarian actors can gradually step back. Placing greater emphasis on approaches that build resilience ex-ante and make fuller use of existing social protection systems and local capacities can both reduce future humanitarian caseloads and improve the effectiveness of increasingly constrained resources.
Placing greater emphasis on building resilience and strengthening systems can both reduce future humanitarian caseloads and improve the effectiveness of increasingly constrained resources.
The order in which support is introduced can also shape its effectiveness. At a macro level, addressing binding constraints first – those whose removal unlocks progress across other areas – can strengthen overall impact. At a micro level, graduation programmes, which help households move out of poverty, show that carefully sequencing support – meeting basic needs before introducing productive assets and aligning training and transfers – can strengthen impact (Gollin et al., 2023[75]).
Ensuring that gains are sustained over time also means attending to the financial and institutional sustainability of systems supported by development partners. External financing can help governments establish or expand social protection systems, for instance, but needs to be anchored in credible medium- to long-term fiscal strategies, combining domestic revenue mobilisation with expenditure reprioritisation (e.g. reallocating fossil fuel subsidies towards social transfers) as well as in partnership frameworks that clarify from the outset agreed objectives, timeframes, roles, co-financing arrangements and exit strategies (Giwa, 2026[76]).
Finally, the timing, sequencing and sustainability of poverty and inequality reduction efforts are shaped not only by technical considerations but also by political economy dynamics. These may lead to short-term interventions being prioritised – by development partners or partner governments – to demonstrate visible results, while longer-term reforms can be constrained by vested interests. Supporting partners in navigating these dynamics is itself an important dimension of effective development co-operation.
Dynamics: Enabling sustained exits from poverty and inequalities
Effective support towards ending poverty requires supporting governments and other partners in addressing three interdependent approaches: i) tackling the structural disadvantage that traps people in chronic poverty; ii) reducing people’s vulnerability to shocks that could push them back into deprivation; and iii) strengthening the assets and opportunities needed for sustained escape out of poverty (CPAN, 2014[77]). A context of rising and overlapping risks requires greater emphasis on preventing impoverishment by building resilience – including through integrated approaches combining social protection, insurance, climate adaptation and gender-responsive measures – combined with stronger attention to recovery. Adequate public investment in system-level resilience such as disaster risk management, climate-smart agriculture, economic diversification and universal health coverage can compensate for or complement limited household capacities (CPAN, 2025[78]).
These poverty dynamics are shaped by inequalities that are reproduced, interact and persist over time, determining who experiences poverty, who falls into poverty and who remains at risk. For example, policies that expand access to health and education can reduce disparities in the short term, but without addressing deeper structural drivers – such as norms, institutional biases or unequal relations – the gains may not persist across generations (Lengfelder, 2019[79]). This highlights the importance of development partners supporting not only efforts to reduce inequalities at a given point in time, but also to address their structural drivers – for example by strengthening upward social mobility, tackling discriminatory norms and reinforcing inclusive institutions – so that progress becomes durable rather than reversible (OECD, 2024[18]).
2.3.2. Considering channels and depth of impact in strategic design
Transmission mechanisms: Supporting direct and indirect channels of impact
A key design consideration – at both strategic and intervention level – is how development partner support is expected to reach people and affect poverty and inequality outcomes. Some approaches work through direct channels, targeting individuals or households and improving their situation immediately – for example through social transfers, basic services or targeted livelihood support. Others operate through more indirect channels, influencing broader economic, institutional or market systems, which in turn shape people’s opportunities and outcomes. For example, investments in infrastructure, private sector development or policy reform may not always target people experiencing poverty directly but can affect jobs, incomes and access to services over time. Economic development is one of these indirect channels; central to this is the need to shift away from a narrow focus on GDP growth, paying more deliberate attention to the quality, distribution and environmental sustainability of economic opportunities in L&MICs (see Section 4.1.2). Being explicit about these pathways can help clarify assumptions about how change is expected to happen and strengthen the impact of development co-operation.
Development partners can support context-appropriate mixes of pre-distribution and redistribution policies, aligning with partner country priorities and evidence on what works.
The distinction between direct and indirect channels is related to the broader strategic question of whether to prioritise support to pre-distribution or redistribution policies. Pre-distribution refers to shaping how income and opportunity are generated in the first place – for example through investments in education, infrastructure or labour markets – so that growth itself produces more equitable outcomes. Redistribution, by contrast, refers to correcting outcomes after they occur – for example through taxation and social transfers – once market activity has already generated a given distribution of income. The dominant tradition has been to treat poverty and inequalities as residuals of economic growth, to be corrected after the fact through compensatory redistribution, adjusting market outcomes rather than shaping them (Mkandawire, 2004[80]). However, increasing attention is being paid to more structural, upstream interventions that tackle how economies are organised in the first place (De Schutter, 2026[81]). This pre-distribution approach seeks to cap poverty and narrow inequalities before they are produced, rather than compensating for them afterwards.
Development partners can support a more deliberate balance between pre- and redistribution, aligning with partner countries' priorities and what the evidence suggests will be most effective in a given context. Successful poverty reduction episodes in Bangladesh, Ethiopia and Viet Nam, for instance, point to upstream investments – in education, agricultural productivity and connective infrastructure – as the backbone of durable progress on poverty and inequalities (World Bank, 2024[82]). However, such pre-distribution faces its own implementation challenges: public investments in education and health are themselves unevenly distributed, their returns depend on private inputs shaped by existing inequalities, and service delivery failures are common (Kanbur, 2025[83]). Generally speaking, pre-distribution is particularly important in contexts where structural drivers of poverty and weaker fiscal systems limit what redistribution alone can achieve. In contexts where fiscal capacity is strong, robust redistributive systems are more viable. Development partners can support context-specific analysis to identify the binding constraints to opportunity – helping to understand whether upstream or downstream interventions will have the greatest returns. Fiscal incidence analysis, meanwhile, can assess how progressive a country's tax and spending system is overall, and where the balance between pre-distributive and redistributive instruments needs to lie (see Sections 3.2 and 4.1).
Depth: Addressing immediate causes and structural drivers
A related consideration is whether development partners’ support aims to address immediate barriers or underlying drivers of poverty and inequalities, or both, and at what level. Support may focus on immediate causes of poverty and inequalities that individuals, household or groups face – such as lack of income, access to essential services or social protection – or aim to tackle their underlying structural drivers, including institutional constraints, unequal power relations and exclusionary norms (see Chapter 1). Tackling these root causes means engaging with the systems and structures that shape how resources, opportunities and power are distributed – such as laws, institutions, policies, social norms and market dynamics – rather than only addressing their symptoms. This includes transforming the underlying ideologies, institutional arrangements and power relations through which exclusionary norms are produced and reinforced (UN Women, 2026[84]).
In practice, effective approaches often address both. Development partners can support governments and other partners in pairing interventions that alleviate immediate deprivations with efforts that address the factors shaping how opportunities and outcomes are distributed, while working to shift the systems that reproduce poverty and inequality over time. For example, in the context of women's economic empowerment, support for income transfers to women can be combined with investment in care services and measures to better recognise, reduce and redistribute unpaid care work, enabling both immediate relief and longer-term improvements in women’s labour-market participation.
Tackling root causes of poverty and inequalities means engaging with the systems that shape how resources, opportunities and power are distributed, rather than only addressing their symptoms.
2.3.3. Considering scope and coverage in strategic design
Scope: Opting for sectoral, integrated or systems approaches
A key consideration at both strategic and intervention level is the scope of development partner support – whether to focus on specific sectors, combine action across sectors, or engage with the broader systems that shape poverty and inequality outcomes.
Targeted sectoral interventions can address specific constraints with precision and be easier to implement and evaluate. Cost-effectiveness research suggests that simpler, focused designs can outperform complex ones (CGD, 2025[85]). However, they have limitations when deprivations are deeply interconnected, mutually reinforcing and grounded in broader systems.
Integrated approaches that combine co-ordinated interventions across sectors can better respond to overlapping deprivations and structural inequalities. Development partners can support such approaches to reinforce impacts across multiple domains, improve the sustainability and scalability of results and empower marginalised groups (World Bank, 2024[82]; UNDP, 2020[86]). For example, cash+ approaches combine cash transfers with complementary services – such as financial inclusion, nutrition and health services, psychosocial support, skills and employment programmes, childcare or climate‑resilience interventions – to address multiple constraints simultaneously and support more sustained pathways out of poverty (Roelen et al., 2017[87]). Integration involves trade-offs, however. Overly complex, multi-component designs can dilute focus, raise implementation costs and reduce scalability. The case for integrated approaches is strongest where deprivations are deeply interconnected and implementation capacity is sufficient to manage complexity.
Going further, development partners can also support systems approaches, which aim to address the root causes and underlying structures of poverty and inequalities (UNDP, 2026[88]). For example, while an integrated approach to improving living conditions in informal urban settlements might combine housing upgrades, access to water and sanitation, and support to livelihoods, a systems approach goes further by addressing structural drivers – such as land tenure systems, urban planning regulation and participatory governance.
Coverage: Balancing universal and targeted approaches
A final consideration is coverage: helping governments expand rights and access to essential goods and services for all, while balancing equity, efficiency and political sustainability in constrained fiscal and institutional contexts. Universal approaches – which offer benefits and services to all as a matter of right – can promote broader coverage, social cohesion and political durability, partly by including middle-income households and reducing stigma. Targeted approaches directed at specific groups, typically those experiencing severe poverty and marginalisation, can be more feasible when resources are constrained and deliver stronger short-term poverty impacts. However, associated risks include more administrative complexity, a higher likelihood of exclusion errors and perceived unfairness that can fuel social tension when based on group characteristics (e.g. by ethnicity or region).
Several frameworks reflect different ways of managing these trade-offs. “Progressive universalism” prioritises the sequencing of coverage, starting with the most vulnerable first and expanding over time (World Bank, 2019[89]). “Proportionate universalism” combines universal systems with support scaled to need (Marmot, Goldblatt and Allen, 2010[90]). One example of this is early childhood education policies that guarantee access for all while providing additional support to disadvantaged families (OECD, 2024[91]). “Progressive realisation of rights” emphasises the pace of expansion towards universal access in line with the growth of available resources and capacities, as a matter of legal obligation rather than prioritising certain groups first (ILO, n.d.[92]).
Ultimately the balance between universal and targeted approaches is a decision for partner governments, shaped by fiscal, administrative and political economy considerations. In practice, they tend to adopt pragmatic pathways: universal coverage is often the long-term goal, while the focus in the near term is on delivering affordable support through targeted measures combined with efforts to progressively extend protection to those groups often left out, such as informal and self-employed workers. For development partners this underscores the importance of understanding context specificity and supporting nationally led approaches that are feasible, equitable and sustainable.
This section examines the tools and analytical approaches that development partners can use to integrate poverty and inequality considerations into intervention design. It outlines how poverty- and inequality-sensitive context analysis grounded in political economy analysis can inform design choices. It discusses how the objectives, targeting, results and theories of change of interventions can be defined using these insights, and how tools such as the poverty and inequality responsiveness continuum can help guide ambition and manage potential risks and trade-offs. Finally, it explores how policy markers and ex-ante assessments can be used to screen, assess and strengthen the expected social impact of interventions.
2.4.1. Anchoring intervention design in poverty and inequality context analysis
Context analysis is essential to understanding who faces poverty and inequalities, how these issues affect their lives, and why they persist in specific settings – and therefore to inform effective development co-operation.
Development partners can undertake such analysis at different levels depending on its intended use. At the global or regional levels, it can inform organisational strategies and guide decisions on where to engage and allocate resources, helping identify the countries and population groups most in need of external support to address poverty and inequalities and ensuring these are not overlooked (see Section 3.1). At national, subnational, sectoral or project level, it can inform programme and intervention design – this is the focus of this section.
To ensure their context analysis is poverty- and inequality-sensitive, development partners can focus on a core set of questions that generate insights across five key areas (see Table 2.3), each informing different design choices in a given context. These reflect a multidimensional understanding of poverty and inequalities, including their effects on people’s rights, resources, opportunities and resilience.
First, understanding scale, depth and trends helps assess the urgency and trajectory of poverty and inequalities, and whether interventions should prioritise reducing current levels, preventing deterioration or addressing emerging risks.
Second, identifying who is affected, and how supports targeting and prioritisation, helping identify those facing the most acute and overlapping forms of deprivation and discrimination (see Section 2.4.2 for more on targeting considerations).
Third, understanding lived experiences and perceptions helps design interventions that are socially grounded and contextually appropriate, and anticipate whether they are likely to face acceptance or contestation. Meaningful engagement with people experiencing poverty and inequalities can be considered, including through participatory assessments (see Section 4.3).
Fourth, analysing immediate and structural drivers helps identify direct levers for action as well as root causes and the most binding constraints shaping poverty and inequalities.
Fifth, assessing the commitment and capacity of partner governments and other influential actors – across civil society, the private sector, trade unions and community groups – clarifies opportunities for alignment, policy dialogue and coalition-building.
Note: These questions are not intended to be exhaustive, and development partners may vary the scope and depth of their analysis depending on their capacity and priorities.
Source: Authors’ compilation, drawing from development partners’ tools (AECID, 2024[93]; Shifa and Ranchhod, 2026[94]; DFAT, 2022[95]; GIZ, 2021[96]; Nagler and de Jong, 2023[97]; Sida, 2024[98]; UNRISD, 2024[99]; World Bank, n.d.[100])..
Political economy analysis is particularly important for answering the fourth and fifth questions in Table 2.3, helping examine how power and incentives shape poverty and inequality outcomes. Political economy analysis uses stakeholder analysis to clarify who holds power; how resources and opportunities are allocated; and why policies and reforms are adopted, implemented or resisted – identifying which actors benefit from the status quo, what barriers may hinder change and where opportunities for reform lie (Piron and Mwamba, 2025[101]; Oxfam/OPM, 2013[102]; DFAT, 2022[95]). By mapping the actors, incentives and institutional capacities that can enable progress – across government, civil society, trade unions, media, academia and the private sector – it supports the design of more transformative interventions. This includes, for example, identifying how power asymmetries shape who benefits from green transitions (UNDP, 2025[103]) or understanding political backlash in areas such as sexual and reproductive health and rights (Browne and Somji, 2025[104]). Table 2.4 presents a framework grounded in a political economy approach that highlights how policy actors and networks, institutional contexts and policy narratives can enable or constrain the adoption or implementation of poverty- and inequality-reducing policies.
Political economy analysis helps anchor interventions in an understanding of how power and incentives shape poverty and inequality outcomes, identifying who benefits from the status quo and who would benefit from change.
Complementary tools can further strengthen this analysis:
Human rights-based causality analysis helps identify immediate and structural causes of unfulfilled rights and the root causes of marginalisation affecting specific groups (UNDP, 2010[106]; SDC, 2022[107]).
Social contract diagnostics examine the extent to which the implicit bargaining between citizens and the state prioritises those experiencing poverty while creating the conditions for equitable growth (World Bank, 2019[108]).
Institutional reviews identify where capacity strengthening support will be most effective by establishing baseline capacity, understanding the political, social and operational factors that shape how an organisation delivers its functions, and examining political will and prioritisation of poverty and inequality reduction objectives (FCDO, 2023[109]).
Together, these approaches support the identification of realistic and relevant entry points for intervention, help anticipate potential risks and resistance, and enable development partners to design politically informed approaches that are more likely to contribute to inclusive and sustained reductions in poverty and inequalities.
Development partners can draw on existing data and diagnostics produced by governments, international organisations, research institutions and civil society – and support efforts to strengthen them where needed. Where they produce their own assessments, their scope and depth can be adapted to available capacity, ranging from a brief overview integrated with broader diagnostics to a dedicated assessment of root causes and differentiated impacts across population groups. Where evidence gaps remain – such as disaggregated or wealth-related data – they can commission further analysis and invest in strengthening local data and analytical capacities, including national statistics offices, local research institutions and civil society (see Section 5.1). Emerging tools are also expanding what is possible: AI-assisted analysis, nowcasting techniques and satellite imagery are making it faster and easier to generate timely and granular insights to inform context analysis (see Section 5.1.2).
Collaborating with other development partners to pool resources can improve the quality and credibility of findings. It also reduces duplication and the associated costs and burden for individual partners. Where joint assessments face practical constraints – such as misaligned planning cycles or different priorities – duplication can still be minimised by sharing analysis and building on existing work.
Finally, the quality and legitimacy of context analysis can be further strengthened by meaningful stakeholder engagement. Involving people with lived experience of poverty and discrimination and organisations representing them – including through participatory assessments (see Section 4.3) – helps uncover individual and systemic barriers, while engagement with more influential actors can help identify potential allies and barriers to reform (OECD, 2001[42]; UNRISD, 2024[99]). Context analysis is most credible when locally owned and driven, reflecting a broader shift towards approaches that build on local knowledge, capacities and leadership.
The Islamic Development Bank (IsDB) and Oxford Poverty and Human Development Initiative’s (OPHI) joint briefs on multidimensional poverty
Poverty reduction is core to the strategies and policies of the IsDB Group. In the wake of the COVID-19 pandemic and its disproportionate impact on vulnerable populations, the IsDB partnered with OPHI to deepen its understanding of multidimensional poverty across its member countries, based on data from the global Multidimensional Poverty Index (MPI). Together, they produced a series of briefs that provide data-driven insights into multidimensional poverty trends across IsDB member countries, alongside regional analysis, country deep-dives and thematic areas including child poverty, food insecurity and conflict and fragility (IsDB and OPHI, 2020[110]). The series aims to strengthen the IsDB’s evidence-based policies and interventions within its member countries to accelerate progress towards ending poverty in all its forms.
Sida’s Multidimensional Poverty Analysis (MDPA)
Sida uses MDPA to assess who is poor, how and why, and identify context-specific constraints to reduce poverty (Sida, 2024[98]). The conclusions inform its strategy formulation and operational decision making. The tool has been rolled out in most of Sweden’s partner countries to analyse context-specific constraints to reducing poverty and help assess links between the causes of poverty for a country or regional portfolio or a global programme. Lessons learned include that the conceptual framework has been accepted by staff; and that the analysis is most useful for operations when owned by the teams, where management plays a key role (OECD, 2021[111]). MDPA was recently evaluated by the Expert Group for Aid Studies (see Box 5.13).
The World Bank’s Poverty and Equity Assessments
Poverty and Equity Assessments provide evidence-driven diagnostic tools for understanding poverty and inequality dynamics and drivers in a wide range of L&MICs (World Bank, 2025[112]). They typically draw from household surveys, often complemented by other sources of data, and outline a set of policy priorities that can put the country on a sustainable path to achieve its poverty and equity goals. Together with Country Climate and Development Reports, these assessments feed into other core Bank Group diagnostics (such as Systematic Country Diagnostics), country engagements and operations, and form a key source of information for governments, development partners and citizens more broadly.
Asian Development Bank’s (ADB) Poverty and Social Analysis
In 2025, ADB enhanced its Poverty and Social Analysis approach to strengthen the link between analysis and project design by focusing on how operations can directly advance poverty reduction, reduce inequality and expand social inclusion (ADB, forthcoming[113]). It moves beyond a general assessment of poverty and vulnerability to examine who benefits, who may be excluded or adversely affected, and what design features are needed to improve access, participation, resilience and distributional outcomes for poor, vulnerable and socially excluded groups. Using the channels of impact assessment – employment, prices, transfers and taxes, access to goods and services, assets and agency – the analysis identifies opportunities, barriers and risks, and translates these into targeted design measures and monitoring indicators. This positions the Poverty and Social Analysis as a core operational tool for translating ADB’s poverty reduction and inclusion commitments into better-targeted project design, measurable results and inclusive development impact.
2.4.2. Designing interventions for impact: Setting objectives and targeting approaches
Once the context is understood, defining clear objectives is critical – determining what changes an intervention seeks to achieve in relation to poverty and inequalities and how these changes will be realised and measured. Setting objectives requires balancing three considerations: i) the most binding constraints to poverty and inequality reduction; ii) partner country priorities and strategies; and iii) development partners’ own mandates, comparative advantages and operational presence. In line with the principle of country ownership, partner country priorities should be the primary reference point. In practice, most development partners navigate a balancing exercise – identifying points of convergence where both governments and development partners see value, while managing trade-offs to determine where interventions can have the greatest, most sustainable impact on poverty and inequality reduction and where development partners are best placed to contribute. Where possible, engaging people experiencing poverty and inequalities in defining objectives – as well as other relevant stakeholders – helps ensure they reflect lived realities, builds local ownership and strengthens the relevance and legitimacy of the theory of change (see Section 4.3).
Objectives can focus primarily on reducing poverty, on narrowing inequalities or on tackling both, each implying different design choices. Poverty-focused objectives are typically concerned with addressing deprivation by lifting – and maintaining – individuals or households above defined minimum thresholds of acceptable standards of living. Inequality-focused objectives, by contrast, aim to reduce disparities between individuals or groups, whether defined vertically, horizontally or spatially. The same policy instruments – such as social protection, health or education – can be used to pursue either or both, depending on how they are designed and implemented (see Section 4.1.2).
However, given their deep interconnections (see Chapter 1), focusing on poverty or inequality reduction objectives in isolation can reduce policy effectiveness or produce unintended effects, highlighting the need for integrated approaches.
Poverty-focused interventions that overlook distributional objectives may be less effective at reducing deprivation, leaving disparities unaddressed or even exacerbated. For example, pro-poor agricultural programmes targeting smallholder productivity – such as input subsidies, extension services or rural credit – may raise incomes among low-income farmers. However, where land ownership and control over productive assets are unequally distributed, these interventions may disproportionately benefit those who already hold these assets, often male household members, thereby reinforcing existing gender and intra-household inequalities and limiting the extent to which gains translate into broad-based poverty reduction.
Conversely, inequality-focused policies that do not account for poverty and intersecting disadvantages may benefit relatively better-off groups while leaving the least well off behind. For example, programmes aimed at increasing women’s access to education, employment or economic opportunities may disproportionately benefit women who are already better positioned to take advantage of these opportunities, while leaving behind those experiencing intersecting disadvantages.
Defining who is expected to be reached – and who is not – is a critical dimension of intervention design. This refers to targeting – i.e. how specific interventions identify and prioritise beneficiaries. At intervention level, the targeting of populations experiencing poverty and inequalities can be pursued through a range of complementary approaches. These include:
Geographical targeting, for example towards lower-income countries, regions or localities;
Sectoral targeting, focusing on sectors that disproportionately benefit low-income populations, such as social protection, health, education or food security;
Categorical targeting, aimed at individuals or groups experiencing poverty or discrimination. Categorical targeting may include individuals in the bottom income deciles as well as individuals or groups facing structural disadvantages, such as women, smallholders, persons with disabilities, children or forcibly displaced populations. Categorical targeting can be achieved indirectly where development partners support government programmes that use targeting systems (e.g. social transfers provided through social registries or proxy means testing). In other cases, development partners can achieve more granular identification of beneficiaries through ex-ante distributional impact assessments (see Section 2.4.4).
In practice, development partners typically use a combination of targeting approaches, with the choice and level of precision depending on context, data availability and institutional capacity (GIZ, 2017[114]). In settings characterised by widespread poverty and limited administrative capacity, broader targeting approaches may be more appropriate, whereas in contexts with more uneven poverty profiles and stronger data systems, more precise targeting can be feasible and effective.
Defining who is expected to be reached – and who is not – is critical to designing effective poverty and inequality interventions, with targeting approaches chosen based on context, data availability and institutional capacity.
Targeting choices often involve trade-offs between reaching those most in need and broader objectives such as resilience, reform sustainability and cost-effectiveness. Given the persistence of extreme poverty in many contexts, targeting populations experiencing the most severe forms of deprivation remains a priority. Ensuring that these groups are effectively reached is central to achieving meaningful and lasting poverty reduction. At the same time, it may be legitimate to target wider population groups, including segments of the middle class that remain vulnerable to shocks and at risk of falling back into poverty. Supporting these groups can contribute to resilience, inclusive growth and the sustainability of reforms, recognising that poverty reduction gains are often fragile and that upward mobility remains limited in many contexts (OECD, 2024[18]). Cost-effectiveness is also a consideration: in some contexts, interventions targeting broader population groups may achieve better welfare outcomes relative to resources invested, particularly where the administrative costs of narrow targeting are high or where spillover effects benefit the wider community. Where interventions do not explicitly prioritise those furthest behind, it is still essential to assess at the design stage whether they are likely to benefit from the intervention overall, otherwise interventions risk bypassing those most in need or reinforcing existing inequalities.
Once objectives and target groups are defined, selecting appropriate results indicators and grounding them in a results framework that helps connect these objectives with corresponding inputs, activities, outputs, outcomes and impacts is essential to operationalise these objectives and assess progress. Chapter 5 provides guidance on monitoring and evaluation.
2.4.3. Applying a poverty and inequality responsiveness continuum to guide ambition and manage trade-offs
All development co-operation interventions have an impact on poverty and inequalities, whether intended or not. The poverty and inequality responsiveness continuum provides a framework that can be used at the design stage to assess these likely impacts along a scale from harmful to transformative.
Source: Adapted from Gender Equality and the Empowerment of Women and Girls (OECD, 2022[44]), and inspired by gender equality, disability and social inclusion (GEDSI) analysis and AFD’s Sustainable Development Grid analysis (AFD, 2025[115]).
The continuum is not simply a descriptive tool to classify interventions according to their likely impacts on poverty and inequalities. It can also be used iteratively to inform design choices, identify where greater ambition is possible and adjust interventions so that they avoid harm, respond more effectively to barriers faced by disadvantaged groups, and, where possible, contribute to transformative change.
At a minimum, development partners should ensure that interventions are poverty- and inequality-sensitive, in line with a “do no harm” approach. This requires designing interventions to avoid negative consequences for people experiencing poverty, exacerbating existing inequalities or creating new forms of exclusion, and taking appropriate measures to mitigate or compensate for adverse impacts where such risks cannot be avoided.
Development partners can also go beyond this minimum standard and strive to design interventions that are responsive and, where possible and appropriate, transformative in their contribution to reducing poverty and inequalities.
Responsive interventions identify and address immediate barriers faced by disadvantaged groups, ensure inclusive access to services, opportunities and benefits, and mitigate risks of exclusion or unintended harm – primarily working within existing systems to improve outcomes.
Transformative interventions go further by addressing the structural drivers of poverty and inequalities, including unequal power relations, discriminatory social norms and institutional barriers. They aim to strengthen the agency, voice and participation of marginalised groups and promote more equitable distributions of resources, opportunities and power. While responsive interventions focus on reducing exclusion and improving outcomes within existing systems, transformative interventions seek to change the systems and structures that sustain poverty and inequalities.
Development partners may choose to apply the continuum to poverty reduction or to inequality reduction depending on which dimension their intervention emphasises. However, given the strong interconnections between poverty and inequalities, applying the continuum to both can help ensure progression towards more responsive and especially transformative outcomes. Interventions that focus primarily on one dimension may therefore need to consider how design choices can also contribute to the other – for example, by ensuring that poverty-focused interventions do not reinforce existing disparities, or that inequality-focused interventions reach and benefit those experiencing the most severe forms of deprivation.
As with overarching strategies (see Section 2.2.1), interventions can take a twin-track approach between mainstreaming poverty and inequality reduction and more targeted actions. The continuum helps determine which is needed, and how both need to deepen as ambition increases. Mainstreaming may be sufficient to move interventions towards more positive outcomes where barriers can be addressed through stronger analysis, more inclusive design and improved implementation. However, where exclusion is acute, risks are concentrated among specific groups, or structural drivers need to be addressed, mainstreaming is not sufficient, and targeted interventions become essential. Moving towards more responsive or transformative outcomes typically requires strengthening both approaches in a complementary and mutually reinforcing way (SDDirect, 2026[116]).
Interventions that primarily pursue other objectives require particular attention to ensure they are at minimum poverty- and inequality-sensitive. They can also be designed to contribute responsively – and, in some cases, transformatively – to reducing deprivation and disparities. As noted in Section 2.1.2, in contexts of competing objectives, trade-offs between poverty and inequality reduction and other goals are common and cannot be assumed away. At the intervention level, making these trade-offs explicit and applying an equity lens involves examining who is likely to benefit and who may bear the costs. On that basis, three steps can be taken (see Table 2.6). First, redesigning interventions to avoid harm; second, including mitigating measures; and third, actively identifying opportunities to maximise co-benefits – that is, positive contributions to poverty and inequality reduction that arise alongside the pursuit of other primary objectives such as climate mitigation or trade. Trade-offs can also be managed through sequencing – for example, prioritising interventions with limited immediate poverty benefits where they enable longer-term gains, while protecting actions with strong poverty impacts where trade-offs are marginal or reversible. Harnessing co-benefits and managing trade-offs depend on design choices, including who is targeted, how benefits are distributed and whether structural barriers to inclusion are addressed. For example, climate mitigation can be designed to support vulnerable livelihoods and enable a just transition, while support to trade can be shaped to expand decent work opportunities and improve market access for disadvantaged groups.
2.4.4. Using poverty- and inequality-relevant markers and ex-ante assessments
Development partners can draw on a range of ex-ante tools that help identify the focus and expected impacts of an intervention on poverty and inequalities, and strengthen them as necessary. Over time, these tools have evolved from poverty‑focused analyses to broader distributional frameworks that capture horizontal and vertical inequalities.
Policy markers and related approaches
Policy markers and other screening tools can help development partners identify at the design stage which poverty- and inequality-related objectives their interventions aim to address, and to what extent.
Note: The inequality markers developed by the EC, AFD Group and AECID are designed as broadly equivalent systems. Efforts are underway to ensure convergence in methodologies, comparability of objectives – including a shared focus on disadvantaged and vulnerable groups – and coherence in reporting across these approaches.
Several DAC policy markers capture interventions’ focus on policy areas of relevance for poverty and inequality reduction. The DAC does not have a dedicated poverty reduction marker: one was introduced in the past but subsequently discontinued, reflecting challenges in capturing the breadth and indirect pathways through which development co-operation can contribute to poverty reduction.1 However, several existing DAC markers (OECD, n.d.[118]) track interventions’ focus on specific dimensions of poverty or inequalities. The DAC gender equality policy marker – which is mandatory for DAC members and used by a wide set of other development actors – supports systematic screening of development finance against gender equality objectives. In contrast, the DAC disability inclusion marker remains voluntary and less consistently applied, highlighting the need for broader uptake to strengthen attention to disability rights and inclusion. These two markers primarily capture policy intent to address forms of horizontal inequalities. Other DAC markers provide useful insights into policy objectives relevant to social outcomes, such as the nutrition policy marker; the reproductive, maternal, newborn and child health policy marker; and the democratic and inclusive governance policy marker.
Policy markers can help development partners embed poverty and inequality objectives into project design from the outset, and track and be accountable for their contribution to these goals.
DAC policy markers use a three-point scoring system, classifying whether an activity’s policy objective is a principal target (2), a significant target (1) or not targeted (0). Scoring is guided by minimum criteria, which typically include the presence of relevant analysis (e.g. gender or disability inclusion analysis), clearly defined objectives and indicators, and provisions for monitoring and reporting on the policy objective, often supported by the use of disaggregated data where relevant.
Some DAC members have developed their own dedicated poverty or inequality markers or other tools that play a similar screening function (see Box 2.8). Their methodologies vary, but as with DAC markers, they often combine qualitative scoring systems with a set of minimum criteria to guide scoring, including analytical requirements. Efforts are underway to ensure equivalence across inequality markers developed by the EU, AECID and AFD. In the case of AFD, the use of an inequality and inclusion marker is embedded in a broader framework – the Sustainable Development Analysis and Opinion Mechanism – which combines the assessment of expected risks and positive contributions across multiple policy dimensions (human, environmental, economic and governance). This approach helps manage trade-offs across policy objectives and encourages dialogue between different teams. Its scoring system reflects a clear progression from interventions with potentially harmful effects to those contributing to increasingly significant and structural outcomes and is aligned with the continuum thinking (see Section 2.4.3). As a lighter option, development partners can also use sample-based assessments to check the poverty and inequality focus of interventions.
Policy markers have proven successful in encouraging the integration of specific policy objectives into project design from the outset, mainstreaming strategic goals within organisations’ culture and fostering internal learning and accountability (OECD, 2022[44]). Policy markers are also important tools for tracking allocations against policy objectives, thereby supporting transparency and accountability in allocation decisions (see Section 3.1). The data collected using DAC policy markers, both by DAC members and a wide set of other development partners, allows for comparison across actors. More broadly, these data are widely used by civil society and academia for research and advocacy purposes, supporting accountability and incentivising progress.
The EC’s Inequality Marker
The EC’s Inequality Marker (I-Marker) was launched in 2023 to promote systematic consideration, tracking and benchmarking of inequality reduction across European Union-funded interventions. It assesses whether and to what extent reducing inequalities is an explicit objective of an intervention and therefore its likelihood of contributing to more equitable outcomes – particularly for the bottom 40% of the population and other socio-economically disadvantaged individuals, households or groups (EC, 2023[119]; OECD, 2023[120]).
At the design stage, interventions are scored according to whether inequality reduction is a principal objective (I-2), a significant objective (I-1), or not targeted (I-0). Scoring is based on whether interventions are grounded in an analysis of inequality trends and drivers; whether their objectives and activities are explicitly designed to directly benefit the bottom (poorest) 40% of the population or other socio-economically disadvantaged individuals or groups; whether they have objectives and activities explicitly designed to reduce inequalities; whether they include measurable and relevant inequality indicators; and whether they incorporate a specific evaluation plan (or dedicated component within a broader evaluation) to assess distributional impacts, including on the most vulnerable, for example through the Distributional Impact Assessment (DIA).
Experience so far suggests that the I-Marker has contributed to an enhanced focus on inequality in the design of EU-funded projects and fostered policy dialogue with the EU and its partners. In 2024, 62% of new Directorate General for International Partnerships (DG INTPA) actions – outside the European Fund for Sustainable Development+ – targeted inequality (with 54% scoring I-1 and 8% scoring I-2), up from 59% in 2023.
Supported by dedicated guidelines, the I-Marker began being applied to the European Fund for Sustainable Development+ in 2025 and will be key in the context of the EU Global Gateway (EC, 2025[121]; OECD, 2025[122]). Uptake by partner financial institutions involved in the Fund will be important to ensure the I-Marker is more than a simple reporting exercise but encourages them to integrate inequality considerations.
AFD’s inequality reduction and inclusion marker
AFD’s Sustainable Development Analysis and Opinion Mechanism informs project design by systematically assessing how interventions aim to contribute to sustainable development objectives, including inequality reduction and inclusion (OECD, 2024[123]; AFD, 2025[115]; AFD, 2023[124]). Aimed at strengthening alignment with three pillars – i) planet; ii) people; and iii) economy and governance – it is applied, with varying modalities across the AFD Group, including Proparco and Expertise France, through a two-step approach.
First, during their design, projects are systematically analysed across these pillars. The people pillar includes both a gender equality dimension and an inequality reduction and inclusion dimension. The latter covers issues related to conflict prevention and the promotion of social cohesion; improving access to quality essential services and living conditions; expanding opportunities for decent work and income growth; strengthening redistributive policies and social protection systems; promoting participation and inclusion in political and social life; and upholding human rights and non-discrimination. This assessment fosters dialogue across teams and helps manage potential trade-offs between pillars, thereby improving project design.
Second, a “sustainable development opinion” issued by an independent body within AFD provides an ex-ante scoring of the project on a scale from -2 (significant negative impacts) to +3 (structuring positive impacts). Modalities vary across the Group: for example, at Proparco the scoring is carried out by its investment teams, with guidance from its impact team. The scores inform decision making by the AFD Board of Directors during project approval and serves as a policy marker for accountability purposes.
AFD has committed to targeting 50% of its interventions towards inequality reduction and inclusion for the period 2025-26, using this mechanism to steer and track progress (AFD, 2026[49]), and reached 58% in 2025. The approach is also evolving to include stronger ex-post assessments, which can help validate results and support continuous learning and improvement over time.
An equivalence system has been developed between AFD’s inequality reduction and inclusion marker and the EU’s I-Marker, with Proparco becoming the first development finance institution to operationalise this alignment within its investment processes.
Ex-ante assessments
More in-depth ex-ante assessments analyse the likely distributional impacts of interventions, help shape design choices and appropriate safeguards, and identify target and affected groups (thereby informing the targeting choices explored in Section 2.4.2). Common approaches include gender equality, disability and social inclusion (GEDSI) analysis, which examines how interventions can address intersecting forms of inequality across gender, disability and, increasingly, other forms of exclusion, and distributional impact assessments which assess the potential or actual effects of interventions on economic inequality (see Box 2.9). As noted above, such assessments often underpin the application of policy markers and can contribute to higher scores by strengthening the analytical basis, objectives and results frameworks of interventions. The use and depth of analytical tools tend to be calibrated proportionately based on expected benefits relative to time and resource requirements. These may be particularly warranted for large-scale or high-risk interventions, or where there are clear opportunities to strengthen positive outcomes.
These assessments are most effective if they are not treated as one-off exercises, but used iteratively throughout the programme cycle to inform design, adapt implementation, manage risks and track outcomes. Embedding them in monitoring, evaluation and learning systems can help ensure that evidence on poverty and inequality informs operational decisions and supports timely course correction when needed.
Future efforts could focus on strengthening coherence and comparability across tools, while supporting their practical use in informing design, decision making and resource allocation. This includes ensuring that screening and assessment approaches go beyond compliance to meaningfully shape interventions and encourage alignment with poverty and inequality reduction objectives. Expanding the coverage of multidimensional poverty and intersectional inequalities within these tools can further enhance their relevance and effectiveness in guiding development co-operation.
FCDO’s gender equality, disability and social inclusion analysis (United Kingdom)
FCDO’s Programme Operating Framework includes a rule that “all programmes (and policies) must consider and provide evidence, where relevant, on how their interventions will impact on gender equality, disability inclusion, LGBT+ and other equality considerations” (FCDO, 2026[125]). This is done in the appraisal stage through intervention ‘business cases’ and is supported by guidance on GEDSI analysis for FCDO staff, which is considered essential to improve programmes’ social impact and focus on poverty reduction and reduce the risk of unintended consequences, while also improving the value for money of programmes through increased equity. For programmes over GBP 40 million, an Equality Impact Assessment must be conducted to inform the business case, which asks how FCDO will respond to the context or economic sector specific GEDSI risks and opportunities. FCDO has also developed guidance for integrating GEDSI across Economic Development Progammes and International Climate Finance (FCDO, 2025[126]; FCDO, 2025[127]).
DFAT’s gender equality, disability equity, and social inclusion analysis (Australia)
DFAT’s GEDSI approach embeds gender equality, disability equity and social inclusion across the entire programming cycle to ensure investments effectively reach socially disadvantaged groups. The GEDSI Good Practice Note outlines an intersectional approach to understanding how overlapping identities, impairments and barriers (including structural, systemic and societal) shape exclusion and marginalisation, with a particular focus on women, girls, LGBTQIA+ people and persons with disabilities (DFAT, 2023[128]) DFAT mandates that all ODA investments over AUD 3 million include a gender equality objective and gender analysis, preferably GEDSI analysis, and requires that regional and country-level Development Partnership Plans are informed by GEDSI analysis.
DFAT’s Design and Monitoring, Evaluation and Learning Standards state that Investment Concept Notes must outline the level of ambition for GEDSI and how it will be integrated into the design, ensuring expected benefits for socially disadvantaged groups are reflected early in programme logic which must be informed by gender and social inclusion analysis and explicitly identify disadvantaged groups in outcome statements (DFAT, 2026[129]). Investment design documents should present a justification on how the investment incorporates GEDSI as a core cross-cutting priority, ensure appropriate expertise and dedicated budget allocation, including a separate budget line for itemised GEDSI costs. DFAT also published a dedicated guidance note on GEDSI and First Nations Engagement to inform their Partnerships for a Healthy Region initiative, recognising that intersecting social factors and structural barriers drive unequal health risks and outcomes and must be addressed to ensure inclusive and equitable access to health services (DFAT, 2023[130]).
Distributional Impact Assessment
Developed in the context of the EU-AFD Research Facility on Inequalities, the Distributional Impact Assessment (DIA) methodology provides an evidence-based assessment on the potential or effective inequality reducing impacts of an intervention (AFD, 2025[131]) It can be conducted ex-ante during the design phase, or ex-post. For project-type interventions, i.e. when the specific beneficiaries are known (individuals, households or the population of a specific region, district or village), the DIA relies on the Equity Tool. This quick, low-cost and user-friendly tool helps identify an individual’s wealth quintile and whether they belong in the bottom 40%. The EC has further strengthened the DIA, by developing the DIA+; an enhanced version of the methodology that goes beyond wealth distribution to also estimate the income and consumption distribution of programme beneficiaries (EC, 2026[132]). This provides a more comprehensive picture of their socio-economic status and the inclusiveness of the intervention. The methodology, including the DIA+, also allows some flexibility by adding questions to help identify forms of horizontal inequality such as gender, ethnicity, race or other dimensions.
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← 1. A DAC Creditor Reporting System (CRS) poverty marker called “Direct assistance to poor people” was introduced in 1997. It established that an activity should be classified as poverty-oriented (score Principal or Significant) if: i) The poor have been identified as the primary target group of the activity; and ii) The activity includes specific action to remedy causes of poverty (e.g. structural reforms favouring the poor), or to deal with the consequences of poverty (e.g. direct poverty reduction). While the marker was meant to capture ‘direct’ poverty reduction measures, some members argued it should capture indirect measures as well (e.g. economic infrastructure). The Secretariat however argued that given that all aid activities could potentially be considered to have an indirect beneficial impact on the poor, this would make the marker irrelevant. The marker was therefore suppressed in 2004 (OECD, unpublished[133])