This report was initiated with the primary goal to strengthen the evidence base for decentralised development co-operation (DDC) and to deepen the understanding of the contribution that local and regional governments make to sustainable development and stronger local governance. Over the course of this work, its political relevance has become even clearer. At a time when multilateralism, international partnerships and development co-operation are increasingly under pressure, there is a growing need for forms of co-operation that build trust, deliver tangible results and bring international partnerships closer to people.
This report provides a much stronger evidence base showing that DDC makes a difference in this regard. Whether addressing challenges related to climate change, migration, inequalities, human rights, peacebuilding, democratic governance or the digital transition, cities and regions are playing an increasingly important role in development co-operation through both financial and non-financial contributions. The growing recognition of this role is reflected in international commitments such as the New Urban Agenda, the G7 Sustainable Urban Development Ministers’ Communiqués adopted under the German, Japanese and Italian presidencies from 2022 to 2024, and the Sevilla Commitment, adopted at the Fourth International Conference on Financing for Development in 2025.
Growing appreciation of DDC lies at the heart of these trends and is also reflected in the data. In those countries that measure DDC flows, official development assistance (ODA) disbursed by local and regional governments has more than doubled over the past decade, reaching USD 3.6 billion in 2024. In large part, this reflects the fact that cities and regions are often the levels of government responsible for delivering essential public services. Indeed, more than two-thirds of the targets under the United Nations 2030 Agenda can only be achieved with the engagement of local and regional governments. Local and regional governments are therefore well placed to leverage technical expertise that delivers meaningful and cost-effective impact, while also building trust-based relationships that contribute to reinforcing democratic values, social cohesion and resilience at the local level. However, as DDC has grown, so too has the importance of evidence that demonstrates its effectiveness and impact, and the circumstances under which these are achieved.
This report responds directly to that need. It provides the first extensive assessment of how DDC contributes to local governance and SDG outcomes, including at the level of individual cities and regions. At a time when development co-operation is being called upon to deliver more strategic, measurable and lasting results, this evidence offers an important basis for informing policy choices and strengthening the effectiveness of DDC. It also marks the culmination of a decade of joint work on DDC across two OECD committees, the Development Assistance Committee (DAC) and the Regional Development Policy Committee (RDPC), which has produced internationally recognised typologies, policy frameworks and toolkits, guidance and monitoring tools, while helping expand Creditor Reporting System (CRS) reporting to 15 countries, thereby paving the way for a stronger focus on assessing and demonstrating impact.
The report reinforces the vision of DDC as a mutually beneficial form of international partnership, characterised by a two-way exchange of knowledge, expertise and innovation. Its findings show that DDC generates benefits for cities and regions in both partner and DAC countries. Cities and regions in partner countries report stronger institutional capacities, improved service delivery and enhanced access to financing opportunities as a result of DDC. The report also provides evidence of benefits accruing to cities and regions in DAC countries, notably through knowledge and innovation spillovers, including lessons on multi-level governance and citizen engagement.
The findings carry an equally clear message for national governments. If local and regional governments are to realise their full potential as development actors, they need enabling frameworks, predictable support and the space to build long-term partnerships. Strengthening DDC is therefore not about adding another layer to development policy. It is about harnessing the capacities closest to citizens to make development co-operation more effective, resilient and responsive to local needs.
Beyond the analytical contribution, the process of developing this report has helped foster a growing global community of practice, bringing together local, regional and national governments, development agencies, civil society, academia and international partners. We are confident that this report, its recommendations and the partnerships it has helped strengthen will help unlock the full potential of DDC and advance sustainable development for all.
This report marks an important step towards strengthening the shared evidence base on the impact of DDC. We encourage governments at all levels and partners to build on the foundations laid by this work through sustained political support and continued collaboration to further develop this evidence base, advance collective understanding and inform more effective DDC policies and partnerships.
Johann Saathoff,
Parliamentary State Secretary,
Federal Ministry for Economic Cooperation and Development, Germany
Lamia Kamal-Chaoui,
Director, Centre for Entrepreneurship, SMEs, Regions and Cities, OECD
Pilar Garrido,
Director, Development Co-operation Directorate, OECD