Since 2017, the OECD Centre for Entrepreneurship, SMEs, Regions and Cities (CFE) and the OECD Development Co-operation Directorate (DCD) have worked jointly to strengthen the evidence base on decentralised development co‑operation (DDC). This collaboration has documented key trends and innovative mechanisms through which cities and regions design, finance, implement, monitor and evaluate DDC activities, leading to internationally recognised typologies, frameworks, toolkits and recommendations on DDC policies, reporting, capacity building, multi-level co-ordination and partnerships.
This report builds on that body of work by examining a question that has become increasingly important for policymakers and practitioners alike: what difference does DDC make on the ground? To begin to answer this question, it provides an extensive assessment of DDC’s contribution to local governance and sustainable development outcomes in partner territories, while also examining the benefits generated for participating cities and regions in OECD Development Assistance Committee (DAC) countries.
The report is the outcome of a two-year project, carried out in partnership with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), in co-operation with the Service Agency Communities in One World (SKEW) of Engagement Global. It draws on an approach combining analysis of OECD Creditor Reporting System data, 2 dedicated surveys collecting perspectives from over 180 local and regional governments across DAC and partner countries, and 16 case studies of cities and regions from DAC countries engaged in DDC, comprising 8 German and 8 international cases. The analysis is further informed by bilateral interviews with representatives of the case-study governments.
A distinctive contribution of the report lies in its methodological innovation. It pilots a new approach combining text analysis and artificial intelligence-assisted validation to identify DDC official development assistance flows reaching cities and regions. This enables, for the first time, an analysis of DDC contributions at the territorial level, strengthening the evidence base on the links between DDC, local governance and sustainable development outcomes. The analysis also captures dimensions of DDC that extend beyond financial transfers, including peer-to-peer learning, capacity building, technical assistance and knowledge exchange.
The findings and recommendations presented in this report benefitted from extensive engagement with stakeholders from across the DDC community. Three expert workshops, bringing together representatives from national, regional and local governments, development agencies, civil society, academia and international organisations, were held in Berlin, Germany, on 11‑12 December 2024, 22‑23 September 2025 and 14‑15 April 2026. Preliminary findings were presented to the OECD Working Party on Urban Policy at its 38th session on 2 December 2025 and to the DAC at its 1174th meeting on 27 April 2026.
The report was submitted for written comments to the DAC and the Regional Development Policy Committee respectively on 16 and 17 July 2026 under cote CFE/RDPC/URB(2025)28/REV1.