Practical Guidelines for Supporting Locally Led Development

1. Making the case for supporting locally led development

Abstract

This framing chapter reviews DAC members’ commitments and progress in advancing locally led development (LLD) across development, humanitarian and peace efforts. It situates LLD within key international frameworks and examines trends in ODA flows to local actors, highlighting measurement challenges and gaps in direct funding. The chapter outlines the main rationales for LLD, normative, effectiveness-related and strategic, while recognising the importance of enabling environments, including civic space. It emphasises that advancing LLD requires addressing underlying power dynamics, governance structures and partnership models, beyond funding modalities, and calls for a realistic approach to navigating trade-offs, risks and diverse implementation pathways.

DAC members’ commitments and progress to advance locally led development

Development Assistance Committee (DAC) members have longstanding ambitions to advance locally led development (LLD), humanitarian and peacebuilding efforts. These build on a series of formal commitments, including those outlined in the Paris Declaration on Aid Effectiveness [OECD/LEGAL/5017], the Busan Partnership for Effective Development Co-operation (OECD, 2011[1]), the DAC Recommendation on the Humanitarian-Development-Peace Nexus [OECD/LEGAL/5019], the DAC Recommendation on Enabling Civil Society in Development Co-operation and Humanitarian Assistance [OECD/LEGAL/5021], the 2030 Agenda for Sustainable Development (United Nations, 2015[2]), The Grand Bargain (IASC, 2016[3]), The Grand Bargain 2.0 (IASC, 2021[4]) and 3.0 (IASC, 2023[5]), the Locally Led Adaptation Principles (World Resources Institute, 2021[6]), the United Nations Declaration on the Rights of Indigenous Peoples Act (United Nations, 2021[7]), and the Donor Statement on Supporting Locally led Development (Norad, 2022[8]). LLD aligns with the ambition of the Compromiso de Sevilla (UNDESA, 2025[9]) to make financing more effective, inclusive and responsive to country-led priorities, and signals a stronger focus on agency and systemic change. Taken together, these commitments call for development co-operation that delivers locally sustained change, grounded in country-specific contexts and characterised by shifts in who sets priorities, exercises leadership and owns development processes. Their realisation depends on enabling environments in which civic space is protected, as restrictions on freedoms of association, expression and assembly can constrain the ability of local actors to exercise agency and engage meaningfully in development processes.

At the same time, several complementary global initiatives are grappling with similar questions around increasing local agency, effectiveness and accountability. While complementary in their intent, initiatives often rely on differing definitions, approaches and metrics. This is the case of the Pledge for Change (Pledge for Change, 2022[10]), the #ShiftThePower movement, through its Manifesto for Change (#ShiftThePower, 2019[11]), and the World Economic Forum’s Resilience Agenda (World Economic Forum, n.d.[12]), among other initiatives. Without greater alignment among these different initiatives, there is a risk of fragmentation and diluted accountability.

DAC members can also consider how their actions contribute to shaping a strong narrative for supporting LLD. Many DAC members have pledged to publicly advocate for LLD (Norad, 2022[8]) and can use their convening power, strategic partnerships with international organisations and institutional voice to highlight the value of advancing LLD across international fora and to ensure, for instance, that the “Humanitarian Reset” and “UN80” processes appropriately consider how to promote LLD. DAC members can consider not only speaking about increasing local leadership but also i) creating space for it in collaboration with diverse local actors for example, via intentionally sharing policy platforms, ii) listening to their perspectives; and iii) supporting their inclusion in the global political processes. It is important that DAC members engage in transparent dialogue with their local partners about the evolving co-operation and partnership approaches to clarify and agree on mutual expectations.

Official development assistance (ODA) channelled directly to local actors has increased steadily over the past decade, both in volume and as a share of bilateral assistance (OECD, 2025[13]). However, these flows are predominantly directed to recipient governments at national and subnational levels, with comparatively smaller amounts reaching local civil society and private sector actors. While multilateral organisations disburse slightly lower absolute volumes to local entities than DAC members, these flows represent a comparatively higher share of their overall ODA. Evidence from recent Global Partnership for Effective Development Co-operation (GPEDC) monitoring1 also suggests that United Nations agencies and multilateral development banks engage local actors more consistently than bilateral providers (see Annex A).

However, current estimates of ODA channelled to local actors capture only direct financing and do not reflect resources channelled indirectly through intermediaries, which may understate the true scale. Establishing a robust baseline to track progress therefore remains challenging, as diverging definitions and reporting practices limit transparency and comparability (see Box 1.1) Strengthened monitoring and peer learning across providers, including through the forthcoming 5^th GPEDC monitoring round (2027-2030), will be critical to benchmark performance, identify gaps and reinforce collective accountability for commitments on LLD.

Box 1.1. Proxy metrics for official development assistance supporting locally led development

In December 2024, the DAC tasked its Working Party on Development Finance Statistics (WP-STAT) to develop proxy metrics for locally led development (LLD), building on existing OECD Creditor Reporting System data. This work responds to growing demand for recipient-focussed ODA information and contributes to follow-up from the Fourth International Conference on Financing for Development, where LLD features prominently.

To date, WP-STAT discussions have focussed on two complementary proxy metrics: i) the share of ODA channelled to local entities, and ii) the share of ODA supporting locally owned programmes. Together, these proxy metrics aim to provide a pragmatic and comparable way to approximate funding support for LLD while also promoting a common understanding across members.

Methodological discussions highlight several open questions, including how to define “local” entities, whether to include project-based funding, how to treat multilateral ODA and in-donor costs, and how to reflect the role of intermediaries where funding flows through non-local actors but supports locally designed and implemented programmes. Members broadly see value in tracking locally led ODA to enhance transparency and accountability, while there is limited appetite for setting collective numerical targets.

These discussions also point to the importance of continued efforts to converge towards shared definitions of locally led development and local actors, and to develop common approaches for assessing progress. This includes not only tracking the volume of funding reaching local actors, but also better capturing the quality of partnerships and the extent to which support reflects locally led processes and outcomes.

Source: OECD (2025[13]), DAC Working Party on Development Finance Statistics: Exploring metrics on locally led development based on the Creditor Reporting System, DCD/DAC/STAT(2024)18/REV, https://one.oecd.org/document/DCD/DAC/STAT(2024)18/REV2/en/pdf?sessionId=1768387162006.

Arguments for supporting locally led development

LLD has gained prominence, grounded in normative, instrumental and emancipatory rationales. Recent crises, from the COVID-19 pandemic to climate change, inequality, food insecurity and war, are disrupting traditional development co-operation models, pushing development partners2 to rely increasingly on local knowledge and access (OECD, 2020[14]). At the same time, calls to decolonise development co-operation highlight entrenched asymmetries and exclusion, as development interventions and policy debates remain defined from Northern perspectives, with insufficient attention to local and Indigenous perspectives, knowledge and context (Dickson, Khan and Sondarjee, 2023[15]; Martins, 2020[16]; Robtel Neajai, 2020[17]; Patel, 2020[18]; UK Parliament, 2022[19]; Peace Direct, 2021[20]). LLD implies that local actors should set priorities, that local leadership increases the speed and effectiveness of responses and that development partners have a responsibility to address structural power imbalances in development co-operation between funders and recipients (Boateng, 2021[21]; Brown, Donini and Knox Clarke, 2014[22]).

Against this backdrop, a set of interrelated arguments underscores the case for advancing LLD:

1. Supporting LLD responds directly to strong calls from partner countries and diverse country-level stakeholders to reform the international development system.3 Traditional models of development co-operation are viewed as misaligned with today’s geopolitical realities and ill-suited to address persistent power asymmetries. Long-standing norms, biases and colonial legacies in development co-operation are being questioned, alongside calls for system-wide change (OECD, 2023[23]). Recent crises have further exposed the limitations of traditional delivery models. Central to these reform demands is a shift, dating back to the Paris Declaration, from supply-driven approaches towards genuinely demand-driven partnerships that prioritise country leadership, local ownership and mutual accountability, including at the subnational level (UNDESA, 2025[24]). At the same time, local actors underline that advancing LLD requires development partners to accept uncertainty, invest in learning and practise greater humility by sharing decision making power. In this context, supporting LLD offers both a principled and a pragmatic pathway to decolonise development co-operation, rebalance power, recognise diverse knowledge systems and strengthen local agency and systems (Cooperation Canada, 2023[25]; OECD, 2023[26]).

2. Supporting LLD strengthens the relevance and efficiency of development, humanitarian and peacebuilding interventions, as defined by those they are designed with and for. Empowering local actors, that bring contextual knowledge, legitimacy and accountability to their communities and citizens, can lead to more effective and cost-efficient programming (Andrews et al., 2015[27]; Campbell, 2018[28]; Honig, 2018[29]; Moore, 2025[30]). Available evidence suggests that local and national actors often demonstrate comparative advantages in areas such as access, contextual understanding and trust, even if rigorous, comparable impact data across delivery modalities remains limited (ALNAP, 2022[31]). One study estimates that local intermediaries could deliver programmes at around 32% lower cost than international actors by reducing layers of international staffing and overheads.4 Follow-up analysis using actual cost data from the United Kingdom’s Foreign, Commonwealth & Development Office (FCDO) and country-based pooled funds programmes indicates cost efficiency gains in the range of 14-19% (The Share Trust, 2025[32]). Furthermore, LLD is part of a broader locally led “action” movement that spans development, humanitarian and peace contexts, reflecting the role of communities and their organisations as first responders in crises and long-term actors able to effectively adapt to changing conditions. Supporting such grassroots efforts can strengthen resilience and reduce the risk of harm associated with misaligned interventions. At the same time, the expectation that locally led approaches must demonstrate superior impact is not consistently matched by equivalent evidence requirements for externally led models, suggesting an uneven standard of proof that may influence decision-making.

3. Supporting LLD offers comparative advantages for advancing inclusion, equity and justice and for building peace in an era of rising conflict. Meaningful engagement with local actors, particularly those that experience poverty, exclusion or inequality, leads to more responsive programming in areas such as gender equality (OECD, 2021[33]), disability inclusion, anti-racism, civic space and human rights – all priorities under the DAC Recommendation on Enabling Civil Society in Development Co-operation and Humanitarian Assistance. In conflict-affected contexts, investing in local systems strengthens institutional resilience, enhances conflict sensitivity and improves development outcomes (Baguios et al., 2021[34]; Barter, 2024[35]; OCHA, 2025[36]; OECD, 2023[37]). Local peacebuilding actors have unique assets, deep community ties, trust, and the ability to mobilise support from domestic constituencies, community philanthropy and social enterprises, which are critical as traditional peacebuilding funding declines. Their proximity also enables more sustainable relationships with national authorities, positioning them to influence local priorities and provide services beyond externally funded models (Langat, 2025[38]).

4. Supporting LLD strengthens local systems and institutions. Supporting LLD reinforces the use and development of partner-country systems and institutions, potentially contributing to reduced dependency on ODA over time. By investing in institutional capacity, local governance structures and domestic accountability mechanisms, LLD supports partners’ ability to sustain progress beyond external financing and reduces the need for repeated external interventions (Baguios et al., 2021[34]; Booth and Unsworth, 2014[39]). This approach requires sustained, iterative engagement with local systems and contexts, recognising that development progress is non-linear and embedded in political and institutional realities. Over time, strengthening local systems contributes to more resilient, self-reliant societies and underpins nationally owned development pathways.

5. Supporting LLD advances geostrategic and foreign policy objectives. Supporting LLD is not only a normative or effectiveness-driven choice; it can also underpin providers’ geostrategic positioning and comparative advantage. By working with local leaders, institutions and organisations, including, where appropriate, political and economic elites, providers can build more credible, trusted and durable partnerships, particularly in stable and “benign” environments. This can enhance foreign policy influence, strengthen diplomatic relationships and contribute to soft power in ways that externally driven models are less able to achieve (Ingram, 2022[40]) (OECD, 2026[41]). In more politically contested or fragile contexts, LLD requires careful political judgement (Box 1.2). Decisions about which local actors to engage, how to support them, and how to mitigate risks (including reprisals or elite capture) have direct diplomatic implications (ODI, 2024[42]). In such contexts, intermediary actors can enable providers to operate at scale while managing fiduciary, reputational and “do no harm” risks. LLD can thus serve as a de-risking pathway, reducing the likelihood of misaligned interventions, social contestation or policy reversals that may undermine broader foreign policy and geostrategic objectives.

6. Supporting LLD gives concrete effect to internationally agreed principles of effective development co-operation.5 It is also consistent with complementary international frameworks, including i) the Kampala Principles, which promote partner-country ownership and alignment of private sector engagement with national priorities (GPEDC, 2019[45]), and ii) the DAC Recommendation on Enabling Civil Society in Development Co-operation and Humanitarian Assistance, which calls for more inclusive, equitable and enabling partnerships (OECD, 2021[46]). It operationalises “inclusive country ownership” by aligning support with partner-country priorities while deliberately engaging and strengthening subnational authorities, civil society, the private sector, Indigenous and community actors, and the systems through which they exercise agency and accountability. In doing so, supporting LLD reinforces more “inclusive and equitable development partnership approaches” that address underlying power imbalances (Booth and Unsworth, 2014[39]) translating participation into meaningful influence. Rather than constituting a separate agenda, LLD strengthens development effectiveness across actors and co-operation modalities by embedding trust, mutual accountability and nationally owned development pathways at the centre of co-operation.

Box 1.2. Pursuing locally led development in politically constrained contexts

Advancing locally led development (LLD) in politically constrained contexts is inherently complex. National-level dialogue may be limited, highly sensitive or temporarily suspended, particularly where governance is contested, civic space is restricted or elites resist sharing power. In such environments, development partners face real tensions: how to uphold core values while maintaining constructive engagement; how to avoid reinforcing exclusionary dynamics; and how to manage heightened fiduciary, reputational and security risks that often fall most heavily on local actors. These trade-offs can slow implementation and make sustained partnerships more difficult, even where political commitments to LLD remain strong. These challenges are not limited to partner countries; restrictions on civil society in provider countries can also constrain advocacy, public engagement and policy space for advancing locally led approaches, underscoring the need to consider enabling environments across either side of development partnerships.

In practice, supporting LLD in these settings requires flexibility, political awareness and a systems approach. It is not a choice between working with state or non-state actors, but about navigating engagement across multiple levels of governance and society. Development partners can identify and work with reform-minded actors and local “pockets of effectiveness”, adapting funding and partnership modalities where needed, including through multilateral channels or pooled mechanisms when direct support carries heightened risk. Collaborative risk management, stronger context analysis and coherent approaches across humanitarian, development and peace efforts can help sustain principled engagement while protecting local agency and institutional resilience.

Engagement with subnational authorities can offer a practical way to maintain presence and protect development gains when national partnerships are constrained. Working with local and regional governments, and through their established mechanisms for engaging community actors, can strengthen broader local ecosystems without creating parallel systems. Such engagement requires careful political economy analysis to understand local legitimacy and accountability dynamics. When treated as a complement rather than a substitute for national co-operation, subnational engagement can lay the groundwork for renewed dialogue at the central level, supporting more grounded and credible partnerships as political space evolves.

Sources: OECD (2025[43]), Policy Brief: Supporting locally led development in politically constrained environments, Politically constrained environments: Menu of options series, DCD/DAC/INCAF/RD(2025)5, https://one.oecd.org/official-document/DCD/DAC/INCAF/RD(2025)5/en; OECD (2024[44])Pathways Towards Effective Locally Led Development Co-operation: Learning by Example, OECD Publishing, Paris, https://doi.org/10.1787/51079bba-en.

Advancing LLD also requires integrity and realism. LLD is not defined solely by the nationality of implementing partners or by whether funding is channelled directly to local organisations; rather, LLD is fundamentally about who sets priorities and exercises decision making power. While core funding to local actors can be a powerful enabler of locally led approaches, it does not on its own guarantee local leadership, nor is it the only pathway to achieving it. Framing LLD too narrowly around funding flows risks overlooking opportunities to strengthen local leadership within a wider range of partnership and delivery models. Also, LLD should not be framed as a cost-saving or outsourcing strategy, since an overly narrow focus on efficiency risks exploiting local organisations and undermining their long-term stability and capacity. Nor does LLD imply bypassing national governments or fully excluding intermediaries, the latter which can play important roles in amplifying local voices, sharing capacities and risks, acting as fiscal sponsors and operating in politically sensitive contexts (Peace Direct, 2023[47]). What matters is whether LLD-informed partnerships enable genuine shifts in power. This also requires realism about existing political economy dynamics: choices about which actors to support inevitably interact with local power structures, vested interests and patterns of exclusion. Tokenistic approaches that raise expectations without delivering meaningful change ultimately erode trust and exacerbate existing inequities and inefficiencies.

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Notes

← 1.  The Monitoring Exercise of the GPEDC is a partner country-led exercise to promote collective accountability on the effectiveness of development co-operation. While the exercise was not originally designed as a framework to measure LLD, several areas within the framework offer contextual evidence which speaks to local actors’ agency in framing, design and accountability in development efforts. These are highlighted throughout these guidelines.

← 2.  ^“Development partners” refer to official agencies, including state and local governments, or to their executive agencies that provide development co-operation. This includes DAC members as well as other bilateral and multilateral partners. “Multilateral partners” include multilateral development banks, United Nations agencies, vertical funds and other international organisations.

← 3.  Since 2019, #ShiftThePower has been galvanising a vision of a good society and serving as a force for genuine and lasting change in how development work is done through their “Manifesto for Change” for a future that is negotiated, participatory and widely owned (#ShiftThePower, 2019[11]).

An open letter from a coalition of major global civil society organisation networks calls on all funders and policymakers to take collective action to: i) chart a path towards greater independence, agency and power for local actors; ii) reimagine the international development system together; and iii) build a new culture of global solidarity (Stand with Civil Society, 2026[48]).

← 4.  Estimated cost savings assume that development partners would channel the same volume of funding through local intermediaries using similar funding mechanisms. In practice, this varies by context: while some local and national organisations can manage large awards, others have more limited scale and experience, requiring a higher number of smaller grants. Such shifts may still be ethically and operationally justified but could reduce estimated cost savings due to higher administrative demands for development partners.

← 5.  Country ownership, focus on results, inclusive partnerships, and transparency and mutual accountability.