Practical Guidelines for Supporting Locally Led Development

Reader’s guide

Structure of the guidelines

These guidelines begin with a framing chapter that sets the policy context for supporting locally led development (LLD) and outlines the case for its adoption, highlighting its potential to deliver stronger impact while mitigating risks. Chapters 2 to 10 then present nine practical action areas (See Table 1), each structured to define the concrete issues at stake, illustrate how Development Assistance Committee (DAC) members and their partners are addressing these issues in practice, highlight trade-offs and common pitfalls, and point to relevant tools and resources.

Two annexes complement these guidelines. Annex A outlines how Global Partnership for Effective Development Co‑operation (GPEDC) monitoring evidence can be used to assess progress on locally led development and presents initial insights into development partners’ current practices to promote and enable the leadership and participation of local actors in development co‑operation. Annex B synthesises the political trade‑offs and implementation challenges identified through consultations and considering the global context.

Table 1. Overview of action areas to advance locally led development

The OECD peer learning exercise on locally led development co-operation (OECD, 2024[1]) pointed to deep-seated institutional and operational barriers that DAC members face in translating LLD ambitions into practice. These challenges are embedded across policy frameworks, institutional arrangements, funding systems and management practices, shaping how development co-operation is planned, financed and delivered:

• Policies and institutional frameworks: Most DAC members have yet to operationalise LLD through clear institutional strategies, policy guidance or accountability mechanisms. Ambiguity around what constitutes “local” and who qualifies as a “local actor” results in fragmented approaches across development, humanitarian, peace and climate portfolios.1 Inconsistent application of partnership approaches across delivery chains further weakens accountability for equitable collaboration with local actors.

• Institutional capacities: DAC members’ institutional structures and human resource systems are often ill-equipped to enable LLD. The consolidation of decision making in capitals or regional hubs, coupled with shrinking in-country presence, risks eroding contextual understanding and relationships with local partners. Fragmented mandates for development co-operation across multiple ministries and agencies further reduce coherence and alignment around a DAC member’s LLD objectives.

• Staff incentives and skills: Staff frequently lack the delegated authority, skills and incentives to engage in more participatory approaches that support LLD. In practice, staff often operate under multiple and sometimes competing mandates, with performance frameworks that prioritise financial delivery, technical expertise and compliance over engaging in relational, adaptive and politically informed ways of working.

• Funding systems and modalities: Existing funding frameworks continue to favour short-term, earmarked and projectised modalities that prioritise accountability to funders over flexibility and long term development impact. Direct or core funding for local actors remains limited, while heavy reliance on intermediaries and on parallel funding mechanisms reinforces dependency and limits the autonomy of local organisations to plan and act over the long term. Past efforts to increase direct and flexible funding have not always been accompanied by deliberate action to address power imbalances, shift agency to local actors, and enable local leadership to shape partnerships over time.

• Management practices: Risk-averse, compliance-heavy management cultures discourage direct partnerships with local actors and reinforce top-down control. Complex due diligence, reporting and procurement procedures increase transaction costs and divert resources from learning and collaboration. Restrictive eligibility criteria often prevent or deter smaller or community-based organisations from accessing funds. Further progress in harmonising due diligence and reporting requirements will require systematic engagement with risk and compliance functions to better align incentives, capacities and risk appetites. (Vickers, 2025[2]).

• Accountability systems: Monitoring, evaluation and learning systems remain designed for accountability to domestic constituencies rather than fomenting collective accountability and relevance to partner countries and local stakeholders. As a result, local evidence and perspectives are underrepresented in decision making, constraining the collective learning needed to shift power and sustain locally led outcomes.

The nine action areas of these guidelines address these key operational bottlenecks by offering DAC members practical options to reform policies, financing, institutional capacities and management systems in ways that better enable local leadership and accountability. They are presented as a non-prescriptive menu of options, reflecting the diversity of DAC systems and allowing members to identify context-appropriate pathways within their institutional and country settings. They are not ranked or prioritised: some require sustained investment and longer-term change, while others may offer more immediate entry points for behavioural shifts. Identified through consultations and research, these areas reflect the main levers for advancing LLD. Each action area can also serve as an entry point for more in-depth technical work and peer learning, depending on DAC members’ priorities and appetite for reform. Collectively, the action areas frame LLD as a system-level governance and power issue, rather than solely a question of delivery and funding modalities.

The examples included throughout the guidelines illustrate emerging practices and reforms undertaken by development partners to advance LLD. They are not exhaustive and are not intended to assess effectiveness or development outcomes. Rather, they provide an entry point to concise, practical illustrations of how identified approaches are being operationalised, drawing on consultations, desk research and ongoing dialogue. Further detail is available through the corresponding references and hyperlinks.

Turning LLD commitments into institutional change requires mobilising functions such as human resources, administration, procurement, finance and risk management to align systems, incentives and behaviours with LLD objectives. Establishing a dedicated, cross-functional LLD task force or working group can provide an entry point to strengthen co-ordination and drive practical reforms across a development partner’s aid administration (See Box 2.1).

Working definitions used across the guidelines

Shifts in power are closely linked to language. The way development partners frame terms and concepts can either reinforce unequal or exclusionary dynamics or serve as a lever for collective action and advocacy. Persistent definitional ambiguities, particularly around who qualifies as a local actor and the scope of LLD, remain a significant barrier to further progress.

Promoting a common understanding of terminology remains necessary for coherent policy implementation and co-ordination across development actors (OECD, 2024[1]). Table 3 below denotes the non-binding working definitions that are used throughout these guidelines:2

Table 2. Key terms and working definitions

Key term	Working definitions
Localisation	A set of deliberate reforms and practices undertaken by development and humanitarian actors to increase the participation, resourcing and visibility of local actors in externally funded interventions, particularly in planning, delivery and accountability processes.
Locally led development	An ongoing development process of a country, whose diverse local actors exercise agency across policy and programme dimensions (framing, design, delivery, accountability and learning) in given local operating contexts across development, humanitarian or peace efforts (some development partners refer to “locally led action” to denote that it encompasses development, humanitarian, climate and peace efforts).
Locally led development co-operation	Development co-operation that supports locally led development and humanitarian assistance by recognising and enabling diverse local actors’ agency in agenda setting, design, delivery, resourcing, accountability and learning.
Local actors	Individuals and entities based and operating in the local context of reference, subject to local laws, whose actions are centred on local issues. Local actors comprise governmental (national and subnational) entities, parliaments, non-governmental organisations,3 grassroots associations, community-based organisations, Indigenous, traditional and spiritual leaders as well as developing country-based universities, media and private sector entities.
In these guidelines, local actors or entities do not include: i) international civil society organisations, including their country offices in partner countries; ii) multilateral organisations; and iii) international private sector organisations.4

References

[4] OECD (2026), Draft Revised DAC Recommendation on Untying Official Development Assistance, DCD/DAC(2024)53/REV3, OECD publishing, https://one.oecd.org/official-document/DCD/DAC(2024)53/REV3/en.

[1] OECD (2024), Pathways Towards Effective Locally Led Development Co-operation: Learning by Example, OECD Publishing, Paris, https://doi.org/10.1787/51079bba-en.

[3] United Nations (2007), UN Declaration on the Rights of Indigenous Peoples, https://www.un.org/development/desa/indigenouspeoples/wp-content/uploads/sites/19/2018/11/UNDRIP_E_web.pdf.

[2] Vickers, D. (2025), Yes, ‘passports’ can give local partners a holiday from red tape: But real partnership demands much more, https://www.bond.org.uk/news/2025/11/yes-passports-can-give-local-partners-a-holiday-from-red-tape-but-real-partnership-demands-much-more/ (accessed on 13 January 2026).

Notes

← 1.  This is further complicated by the conflation of Indigenous peoples and local communities in international spaces, which fails to recognise Indigenous peoples’ unique rights (such as the UN Declaration on the Rights of Indigenous Peoples (United Nations, 2007[3])).

← 2.  These working definitions are based on the consultations among DAC members for the peer learning exercise on “Approaches to promote locally led development co-operation and enable local agency” (OECD, 2024[1]) and the consultations among diverse local actors undertaken for these guidelines.

← 3.  According to the DAC Statistical Directives, non-governmental organisations (NGOs) should only be classified as international (as opposed to local) “when:

• either there is an international coordinating body facilitating the work of its members on the international level or the NGO has an extensive network of country/regional offices in the field; and

• the NGO has internationally diversified sources of revenue.”

← 4.  In the Revised DAC Recommendation on Untying Official Development Assistance (OECD, 2026[4]), the DAC agreed on the following definition of “local entities”: “organisations and businesses that are legally organised under the laws of, and incorporated in, partner countries and territories. Additional criteria demonstrating the economic links to partner countries and territories – for example based on ownership, location of the central administration or principal place of business – may be used where loans or grants have an explicit objective of targeting specific groups, or achieving specified developmental objectives.” This implies at a minimum that a local company needs to be incorporated/legally established locally, but individual development partners can add stricter criteria (e.g. local ownership) depending on the objective they are trying to achieve.