This chapter analyses the role of national governments in steering and financing decentralised development co-operation (DDC), examining the rationale for national engagement and the diversity of institutional arrangements. It highlights why national governments engage in DDC, including its role in strengthening local governance and civic engagement, and its function as a complementary source of development financing. The chapter also presents a mapping of national DDC frameworks along two axes: i) the level of subnational authority; and ii) the degree of national steering identifying four models, including centrally steered, co-ordinated pluralism, organic dispersion and case-based approaches. It examines how different countries translate these models into practice through legal and regulatory frameworks, co-financing mechanisms and capacity-building support. A central finding is that financial incentives are the most valued form of national support among local and regional government respondents, while capacity constraints and fragmentation remain significant barriers that national co-ordination frameworks can help address without curtailing local autonomy.
The Impact of Decentralised Development Co‑operation
Abstract
National governments play a pivotal role to steer and finance decentralised development co-operation (DDC). As reported by local and regional governments (LRGs) through the 2 OECD surveys on the impact of DDC (hereafter “DDC impact surveys”) and 16 case studies presented in the previous section, they do so by providing institutional frameworks, regulatory environments, funding mechanisms and technical support. This section provides a more detailed analysis of national frameworks to better understand the range of instruments, policies and institutional arrangements through which governments can effectively support and steer DDC. This section primarily refers to lead development ministries, while also including national development agencies even when they do not strictly form part of government structures.
The analysis is structured in two parts. The first section builds on key project sources, including the DDC impact surveys (Box 1.3) and the 16 case studies (Box 1.4) and establishes the strategic imperative for national engagement, making the case for why central governments should actively invest in DDC. Recognising that no single model fits all contexts, the second section develops a mapping of national DDC frameworks. This analytical work serves as a guide to explore the diverse ways countries organise their DDC architecture, comparing the different approaches to setting legal regulations, designing financial incentives and providing capacity-building support.
While DDC is often framed in terms of its benefits for local and regional actors, its relevance for national governments is equally significant. The underlying rationale for national engagement lies in a growing recognition of the strategic value proposition that DDC offers within an increasingly complex and multi‑level global landscape. By complementing traditional channels of development co-operation, DDC can enhance the reach, effectiveness and legitimacy of national efforts. This section explores how DDC provides national governments with distinct strategic advantages and why more active engagement can strengthen both development outcomes and broader policy objectives.
Achieving the 2030 Agenda through local action
DDC provides a vital bridge between global policy frameworks and the concrete actions required at the territorial level, making it an indispensable tool for achieving national commitments on the global stage. There is an increasing recognition that, in an interconnected world, the most pressing global challenges must be met with local solutions. The United Nations (UN) 2030 Agenda for Sustainable Development has a strong territorial dimension, as 65% of the targets cannot be achieved without the engagement of LRGs (OECD, 2020[1]). The outcome document of the Fourth International Conference on Financing for Development, or Seville Commitment, acknowledges the important role of LRGs in localising the UN Sustainable Development Goals (SDGs) and financing sustainable development (UNDESA, 2025[2]). It includes commitments to strengthen subnational finance and LRG capacities, enabling them to deliver on SDGs. It also urges multilateral development banks to better support local development needs. A dedicated strand of the Sevilla Platform for Action focuses on localising SDG implementation. Titled Localizing Finance to Drive Systemic Impact for the Achievement of the 2030 Agenda, this initiative aims to strengthen capacity among LRGs and build partnerships for systemic change and scale up transformative local financing solutions that can be replicated. The initiative also aims to build a multi‑stakeholder community of practice around DDC, aligning finance, policy and partnerships to empower local governments as key drivers of sustainable transformation.
DDC allows for targeted, flexible and rapid responses to global challenges and crises. Local actors increasingly take centre stage in tackling global challenges such as climate change, pandemics and large‑scale migration. Cities and regions are often tasked with managing the effects of extreme weather events, providing services to refugee and migrant populations, and responding to public health crises. DDC can provide the flexibility to respond to transboundary challenges and crises in a targeted way. The example of Lublin, Poland, in Box 5.1 showcases how local actors can complement or lead the way for national policies through their agile and flexible decision making in a crisis.
Russia’s war of aggression against Ukraine in February 2022 triggered forced displacement on a scale not seen in Europe since World War II. The city of Lublin in Poland, as the capital of the border region, has become both a destination and transit point for those fleeing, in need of both emergency and long‑term assistance. Approximately 1.4 million Ukrainians transited through the city in the first few months after Russia’s invasion of Ukraine, and 68 000 refugees stayed in Lublin for an extended term. Lublin's response built on its long-standing partnerships with Ukrainian municipalities, including Lutsk, which provided established channels of communication and trust when the crisis hit.
Immediately after Russia’s invasion, a group of citizens and local non-governmental organisations (NGOs) established the Lublin Social Committee for Assistance to Ukraine (LSCAU). The LSCAU became a central actor and pioneer in helping refugees in Lublin. Immediately after the LSCAU was established, efforts were made to mobilise and co-ordinate volunteer resources. The association grew into a social movement with 17 sub-chapters and 4 000 volunteers.
The LSCAU set up an information desk and a 24-hour refugee hotline in several languages. For efficient accommodation of refugees, it created and continuously updated a database of possible private accommodation in Lublin, other cities in Poland (in co-operation with central offices) and abroad. A similar tool taking the form of an online platform was used to connect potential employers with potential refugee workers.
Source: Podgórska, K., et al (2024[3]), “Support for Ukrainian refugees after Russia’s invasion of Ukraine: aid structure and resilience factors. Case studies of Lublin and Lutsk”, https://doi.org/10.1080/14616696.2023.2206892.
Strengthening local governance and democratic principles
Beyond its direct development impacts, DDC can be a powerful instrument for promoting democratic values and local governance. DDC projects can help to improve local public administration, enhance citizen participation in policymaking or increase the transparency of municipal services. For example, the city-to-city co-operation between Zurich in Switzerland in Mbeya in southern Tanzania, enabled Mbeya officials to develop a strategy for their urban food system and food security. An extensive peer-to-peer exchange in 2023 that covered diverse aspects such as production, transportation, storage and preparation equipped the city administration of Mbeya to develop a cross-departmental strategy, implemented as part of their five-year development plan from 2025.
DDC can equally strengthen local governance and civic engagement in OECD Development Assistance Committee (DAC) member countries. For many citizens, national foreign policy and international development can seem abstract and distant. DDC makes international co-operation more tangible and relatable. When a citizen sees their own city or region partnering with a community in another part of the world to improve access to clean water or hosting cultural events (such as festivals or exhibitions) to learn about other communities, international relations take on a local dimension. This can foster a sense of global citizenship and solidarity, building a stronger domestic constituency for development co-operation and foreign aid. It allows LRGs to demonstrate the direct, two-way benefits of global engagement, as these partnerships also bring back new knowledge, cultural understanding and economic opportunities to the home community.
Another distinctive advantage of DDC lies in its ability to activate networks well beyond the traditional aid architecture. LRGs, due to their proximity to citizens, are uniquely positioned to engage schools, universities, civil society organisations, diaspora groups and community associations in international partnerships. For example, the Italian region of Emilia-Romagna started to engage with Senegal in 2004 to respond to calls from the Senegalese diaspora community to strengthen ties with their country of origin. These diaspora communities continue to actively shape and feed into the region’s DDC programmes. Universities in Zurich, Switzerland, including the Swiss Federal Institute of Technology Zurich (Eidgenössische Technische Hochschule Zürich, ETH) are key players in the city’s development co‑operation work, providing customised advice and training to delegations from partner communities. ETH Zurich is also engaged in the development of the monitoring and evaluation (M&E) framework for Zurich’s DDC programmes. Multi-actor partnerships of this kind help transform DDC into a whole-of-society approach, broadening constituencies for development co-operation and embedding global solidarity in everyday local life.
Enhancing development effectiveness, efficiency and continuity
One of the most powerful arguments for DDC is its potential to deliver more effective and efficient development outcomes compared to purely centralised approaches. This effectiveness stems from its ability to leverage unique subnational capacities and to tailor solutions to the specific context of the partner community, possibly leading to a more efficient use of resources and greater project ownership and impact. DDC operationalises the four internationally agreed upon development effectiveness principles, namely country ownership, focus on results, inclusive partnerships, and transparency and mutual accountability (GPEDC, 2011[4]). DDC promotes country ownership and inclusive partnerships as projects are embedded directly within the municipal plans of partner communities and are co-designed with a range of local stakeholders. DDC has the potential to sharpen the focus on results by concentrating on tangible improvements in core public services such as water and waste management or primary healthcare, which are largely experienced at the local level. Finally, the more direct, peer-to-peer nature of DDC, which rests on the foundation of shared responsibility, can contribute to strengthening transparency and mutual accountability. Therefore, supporting DDC allows a national government to advance the development effectiveness agenda in a practical, grounded and impactful way.
DDC presents an avenue to promote locally led development when partner-country LRGs and territorial stakeholders have meaningful influence over priorities, design, implementation, learning and accountability. Promoting increased agency of local actors for effective development co-operation is a policy priority for development co-operation partners, as evidenced by the 2025 DAC High-Level Meeting chair’s statement (OECD, 2025[5]). The territorial approach of DDC offers favourable conditions for this, as partnerships are formed directly between subnational governments and embedded in local institutions. The OECD DDC impact surveys, analysed in Chapter 3, found that most respondents engaged in city-to-city partnerships (68.9%) with partner municipalities and/or territorial partnerships (38.6%) involving a variety of local actors including civic organisations, civil society, etc. Such partnership formats create the proximity through which a broad range of local actors can be reached, although the degree to which partner LRGs and their stakeholders actually shape decisions varies and is not captured by partnership type alone.
DDC reinforces peer learning and mutual capacity building. This can make it more impactful for sustainable capacity building than the mere transfer of financial resources, by allowing partners to share tested policy solutions. LRGs in developed countries possess a vast reservoir of practical, hands-on expertise in the core functions of public administration and service delivery. They manage water and sanitation systems, organise waste collection, conduct urban planning, run public transport and operate local health and education services. DDC provides a direct channel to exchange this knowledge with their counterparts in developing countries. This direct exchange on technical and managerial skills from those who perform the work daily is a unique and powerful advantage of the DDC modality. For example, France's reciprocity volunteering schemes (VIA de réciprocité), implemented by France Volontaires, illustrate this approach: volunteers from partner territories carry out missions in French local authorities and civil society organisations, mirroring the deployment of French volunteers abroad, so that skills, experience and intercultural knowledge flow in both directions. The experience of the city-to-city partnership between Fredericton in Canada and Port St. Johns in South Africa illustrates how the transfer of knowledge and expertise can ensure sustainable capacity development with lasting policy results (Box 4.5).
DDC offers a channel to maintain continuity of partnerships that complements national development and foreign policy efforts. By focusing on peer-to-peer learning, technical problem solving and building long‑term trust between communities and practitioners, DDC offers a more operational and context-sensitive form of co‑operation that complements traditional state-to-state diplomacy. These partnerships can often endure through periods of political tension between national governments, maintaining vital lines of communication and co-operation. The municipality of Châtellerault in France, for example, maintains a long‑standing city-to-city partnership with Kaya in Burkina Faso even as French national development co‑operation activities have been halted. After a coup in 2022 in Burkina Faso, France suspended development aid and budgetary support in response to the deteriorating bilateral relations with Burkina Faso. However, by obtaining funding from the European Union, Châtellerault has been able to continue its financial and technical support in the areas of water, waste management and energy. Continued co-operation between Châtellerault and Kaya helps to maintain trust between practitioners and local authorities, even when national programmes are paused.
For national governments, supporting DDC can enhance policy coherence for sustainable development. In an era of multiple interconnected crises and challenges, ensuring policy coherence for sustainable development is critical to exploiting synergies and managing trade-offs between policy areas, and to building citizens’ trust in government capacities and legitimacy. The OECD’s Reinforcing Democracy Initiative calls for national governments to steer action to tackle global challenges, to ensure that national institutions can act globally and harness tools and innovation (OECD, 2024[6]). Subnational partnerships often bring innovation and policy experimentation that can be scaled nationally, while also fostering coherence between external action and internal policy objectives. Robust DDC frameworks can help to better integrate the SDGs into national policy planning and reporting processes, while also mobilising citizen engagement and accountability for development results. Box 5.2 describes how the state of Berlin in Germany uses its development co-operation programme to build synergies between international co‑operation and domestic policies. By institutionalising support for DDC, central governments not only increase aid effectiveness but also enhance their own ability to deliver on the 2030 Agenda through coherent, co-ordinated and mutually reinforcing policies.
The state of Berlin’s development co-operation programme exemplifies how DDC can be strategically leveraged to enhance policy coherence for sustainable development in line with the OECD Recommendation on Policy Coherence for Sustainable Development (OECD, 2019, Recommendation of the Council on PCSD). Rather than solely focusing on projects in the Global South, Berlin’s policy deliberately creates a feedback loop between its international engagement and its domestic practices. Through its central development agency (Landesstelle für Entwicklungszusammenarbeit, LEZ), the state provides significant annual funding to Berlin-based NGOs and civil society initiatives for “development education” (Inlandsarbeit). This includes sponsoring partnerships between Berlin schools and those in partner countries, as well as public campaigns that raise local awareness about global issues like fair trade and the SDGs.
In addition, this outward-looking engagement is mirrored by inward-looking policy reform. As part of its development co-operation programme, the state of Berlin has developed and implemented Guidelines for Sustainable Public Procurement (Verwaltungsvorschrift Beschaffung und Umwelt). These legally binding rules mandate that public tenders for goods and services – from information technology equipment to textiles – must adhere to strict social and environmental standards, such as the core labour standards of the International Labour Organization. This dual approach embodies policy coherence in action: Berlin uses DDC not just to fund projects abroad, but to educate its own citizens and, critically, to reform its own consumption patterns, ensuring its internal policies reinforce, rather than undermine, the global sustainability goals it champions internationally.
Source: Bilateral interview held with representatives from the state of Berlin, Germany
DDC as a complementary source of financing for development
At a time when national development co-operation policies and aid budgets face increasing constraints, DDC can help address gaps by mobilising additional resources and actors, while also strengthening the legitimacy of development co-operation and fostering greater domestic support for official development assistance (ODA). In 2025, ODA declined by 23.1% over 2024, representing the largest annual contraction on record and a second consecutive year of decline, bringing ODA to where it stood at the start of the 2030 Agenda. The OECD projects a further 5.8% drop in DAC ODA in 2026, not yet accounting for additional strain from the current crisis in the Middle East (OECD, 2026[7]). These choices reflect a tougher political climate marked by fiscal consolidation, competing domestic priorities and politicisation of migration, factors that weigh on public and parliamentary support for international co‑operation.
DDC can help raise resources and sustain public support by crowding in financing and linking development projects to citizens’ everyday concerns (e.g. environmental quality, water, health, education). DDC can leverage city and regional budgets, technical services and in-kind contributions that are often insulated from national aid cycles, while showcasing visible, locally owned results that strengthen domestic legitimacy for international engagement (OECD, 2025[8]). DDC can also complement shrinking central budgets by aligning local climate and inclusion strategies with international programmes, tapping domestic green and social investment windows, and forging whole-of-society coalitions, thereby safeguarding development gains even as core ODA lines face short-term consolidation. In a period of tighter public finances and sharper political scrutiny, supporting DDC offers national governments a practical pathway to diversify financing, widen constituencies and de-risk their development co-operation portfolios. Box 5.3 showcases how a referendum in Zurich, Switzerland, secured long-term funding for the global development agenda.
In a referendum held on 17 November 2019, voters in the city of Zurich, Switzerland, approved a proposal to establish a formal framework for the city’s spending on international development aid, linking it to a percentage of its tax revenue. The proposal was accepted by a majority of 69.7% of voters.
Under the approved measure, the city of Zurich is committed to to allocating between 0.3% and 1% of its tax revenue to international development cooperation projects. While the minimum contribution was originally estimated at around CHF 5 million per year, the city’s current annual allocation has increased and now amounts to approximately CHF 10 million. The City Council is authorised to adjust the allocation within the approved range, depending on the city’s financial situation.
The successful referendum provides a legal basis for Zurich’s long-standing engagement in international co-operation and development. It solidifies the city’s commitment to global solidarity and provides a flexible yet reliable source of funding for development projects. The framework allows for adjustments based on the city’s economic health, ensuring a sustainable approach to international aid.
Source: News der Reformierten (2019[9]), “Stadt Zürich stockt Entwicklungshilfe auf”, www.ref.ch/news/stadt-zuerich-stockt-entwicklungshilfe-auf.
Beyond mobilising complementary resources, DDC has shown strong potential to generate innovative, low-cost solutions that national programmes may struggle to deliver. Regions and cities often act as test beds for policy approaches such as participatory budgeting, digital platforms for citizen feedback, or climate-smart infrastructure planning that can be piloted at small scale, adapted quickly and then replicated or scaled nationally and internationally. As mentioned in Chapter 3, the district of Giessen in Germany and the municipality of Mubende in Uganda worked together to install solar-powered streetlights in Mubende. A relatively small investment of EUR 40 000 transformed the urban landscape of Mubende, animating formerly deserted areas and making the city a safe place for women and children.
Harnessing the potential of DDC requires national governments to address the structural challenges that continue to limit its effectiveness. Box 5.4 summarises survey evidence on legal and institutional frameworks, regulations and incentives for DDC, demonstrating that national governments often steer the foundational legal and financial architecture that shapes subnational engagement. While DDC offers important opportunities to complement national development strategies and strengthen local ownership as explored in the previous chapter, it also presents significant challenges, particularly from the perspective of developing countries that are at the receiving end of multiple actors and initiatives. Policy discourses around development co-operation often cite the proliferation of actors in a country, and the resulting fragmentation of aid, as a significant problem for effective development co-operation (OECD, 2022[10]; World Bank, 2022[11]). This adds to the barriers to DDC impact mentioned in Chapter 3, such as lack of finance and limited personnel.
LRGs’ DDC activities are often steered by national legal frameworks, with local or regional legal frameworks playing a secondary role. As illustrated in Figure 5.1, around 55% of respondents to the OECD DDC impact surveys reported having a dedicated law on DDC and around 48% have a standardised definition of DDC at the national level. In comparison, regional laws and standardised definitions, at 22% and 20% respectively, are less common. At the local level, they are an exception rather than the norm: only 12% of respondents reported having a dedicated DDC law at the local level and about 11% a standardised definition. The only exception where a local framework is more prevalent than a national one is the inclusion of DDC into sustainable development plans or strategies. Around 45% of responding LRGs reported the inclusion of DDC in their sustainable development plans, compared to 36% at the national and 34% at the regional levels. Similarly, co-ordination mechanisms for DDC are generally more established at the national level: around 54% of survey respondents indicated that there are national co-ordination mechanisms for DDC activities, particularly in respondent LRGs from France, Germany and Italy. They are less prevalent at the regional (41%) and local (28%) levels. Guidelines for the design and implementation of DDC activities also mostly exist at the national level (53%) compared to the regional (38%) and local (29%) levels.
When it comes to financial support and incentives, a similar pattern emerges, as national governments are more often involved in the funding of DDC activities than subnational entities. Almost half of the respondents (48%) have dedicated budget lines for DDC at the national level, compared to 38% at the regional level and 45% at the local level. Moreover, around 56% of respondents reported the existence of national co-financing schemes. While some of them have been established at the regional (28%) and local (19%) levels, they are less common.
Share of legal and institutional frameworks, regulations and incentives for DDC present at the local, regional and national levels
Source: OECD (2025[5]), “OECD Surveys on the Impact of Decentralised Development Co-operation on Local Governance and Sustainable Development Goal Outcomes”, Unpublished, OECD, Paris.
Without a stronger role for central government, these challenges risk diluting impact and making it harder to demonstrate the added value of DDC in the broader development co-operation system. The challenges of DDC have been mentioned in previous papers such as the “Decentralised development co‑operation: A global policy toolkit and guidance for practitioners” (OECD, 2023[12]) and can be grouped into four inter‑related dimensions:
Fragmentation and duplication of efforts: In many cases, DDC initiatives are designed and implemented independently by local authorities in DAC countries, possibly without sufficient alignment with both national co-operation plans in the donor country and development plans in partner countries. This can create fragmentation, duplication of efforts and, in some instances, competition among local actors (OECD, 2023[12]). For developing countries with limited administrative capacity, managing numerous small, un-co-ordinated projects can become burdensome and risks undermining the coherence of national strategies.
Lack of financial resources: As explored in Chapter 3, the lack of financial resources is the main barrier preventing LRGs’ from achieving intended local governance and SDG outcomes of their DDC activities. This confirms the findings from a previous OECD study focused on DDC in Germany, which highlighted short-term one-year funding arrangements as a major obstacle for the medium- and long-term sustainability of DDC programmes (OECD, 2023[13]). It reflects findings from another recent OECD study on SDG localisation (OECD, 2024[14]), which had found that more than 60% of LRGs indicated the lack of financial resources as the main obstacle for the implementation of the SDGs at large.
Capacity constraints: Both DAC and partner local authorities often face capacity constraints, including human resources, which limit the quality, sustainability and scalability of their projects. As pointed out in Chapter 3, many municipalities and regions operate without a dedicated DDC or international affairs department, which means that DDC is often an additional task to their daily work. In partner countries, local governments may lack absorptive capacities, such as the expertise to engage effectively with foreign counterparts, manage funds transparently or integrate external support into their long-term planning (Gehring et al., 2017[15]).
Insufficient data, transparency and accountability: Information about the scope, financing and results of DDC projects is often not systematically reported, either to national authorities in the DAC and partner country or to the wider public (OECD, 2025[8]). Although the OECD Creditor Reporting System (CRS), analysed in Chapter 2, collects relatively comprehensive data on DDC flows, major data gaps exist in DDC reporting from DAC countries (OECD, 2018[16]). This lack of visibility can weaken accountability, both upward to the national government and downward to citizens. For ODA-eligible countries, the absence of consolidated data makes it difficult to track external contributions, monitor progress, assess effectiveness and impact as well as ensure that DDC supports national priorities. Furthermore, the absence of robust M&E frameworks exacerbates the problem of insufficient data, transparency and accountability in DDC. As pointed out in Chapter 3, the OECD DDC impact surveys found that comprehensive assessment of DDC activities is not fully widespread among LRGs, as only 28% of survey respondents reported systematically assessing all or most of their DDC activities.
Taken together, these challenges highlight the importance of a strong co-ordinating role for the national government. National governments are pivotal in creating the conditions under which DDC can flourish as a coherent, accountable and complementary channel of international engagement. By providing strategic guidance, setting reporting requirements and offering capacity-building support, national governments can reduce fragmentation, enhance transparency and ensure that DDC contributes meaningfully to national development and foreign policy objectives. Far from limiting the autonomy of local actors, such co‑ordination creates the enabling environment that allows DDC to realise its full potential: helping transform DDC from a collection of scattered initiatives into a strategic pillar of national development policy.
In addition to strengthening top-down co-ordination, there is a clear need to integrate and systematically consider bottom-up approaches in the governance of DDC. Engagement in DDC offers national governments an opportunity to better integrate regional and local perspectives into their own policy frameworks. LRGs are not only implementers but also key sources of contextual knowledge, innovation and citizen engagement, which are essential for ensuring that development co-operation responds to real needs on the ground. Harnessing these contributions requires national governments to create mechanisms that actively capture, align and scale locally driven initiatives, rather than subsuming them under rigid central frameworks. Integrating bottom-up approaches can help mitigate fragmentation by embedding DDC activities within locally identified priorities that are consistent with national strategies, thereby enhancing coherence without stifling local initiative. Ultimately, a balanced approach that combines strong national co-ordination with structured channels for local input and leadership can improve the relevance, sustainability and impact of DDC, ensuring that it remains both strategically aligned and firmly rooted in local realities. National governments can enable more locally led DDC without over-centralising it by favouring devolved arrangements in which LRGs retain the authority to choose partners, define priorities and manage partnerships, while national frameworks provide predictability, funding and co-ordination. Keeping application, reporting and compliance requirements proportionate to the scale of DDC projects is central to this balance, as disproportionate administrative burdens fall hardest on smaller municipalities and can deter participation altogether. It also strengthens accountability and ownership by involving communities and local stakeholders in the design, M&E of projects. By drawing on the experience, priorities and partnerships of subnational actors, governments can articulate strategies that resonate more strongly with domestic constituencies. This can help ensure that development co-operation policies are grounded in territorial realities, while also strengthening domestic ownership and legitimacy. In this way, DDC not only contributes to external objectives but also reinforces the internal coherence and public support of national development efforts.
The next section reviews the diversity of institutional and legal arrangements across DAC countries and the incentives that shape the participation of subnational actors in DDC. Together, these elements illustrate the governance conditions that determine whether DDC takes place and achieves its full impact on local governance and SDGs. Box 5.5 explores how support from national governments can be beneficial to LRGs as well.
More transparency and accountability as well as better co-ordination of DDC can generate clear advantages for LRGs. Far from reducing their autonomy, effective co-ordination strengthens the role of LRGs as development actors in the following ways.
Greater visibility and influence: More rigorous reporting can ensure that DDC activities are more visible at the national and international levels. Combined with efforts to raise public awareness for development, such reporting can help translate technical information into accessible narratives and outreach initiatives that engage citizens more effectively. When citizens have access to clear and accessible information on DDC activities, they are better able to see how resources are allocated and used, which strengthens public confidence in local authorities and can foster greater community participation in development initiatives. Greater visibility of DDC activities can also increase the influence of subnational actors in the shaping of development agendas and international debates (e.g. at the European Union, United Nations or through networks like United Cities and Local Governments).
Access to more resources and partnerships: Co-ordination mechanisms often open the door to co-financing opportunities with national funds. These include dedicated co-financing windows in national development programmes, joint calls for proposals or nationally endorsed thematic platforms. Subnational governments can pool resources with peers or align with national programmes, enabling them to support larger-scale projects than they could fund alone. Co‑ordinated DDC is also more attractive to multilateral organisations and partner countries, who prefer dealing with structured initiatives rather than fragmented small projects.
Improved effectiveness and impact: Aligning local and regional projects with national strategies ensures that efforts are complementary rather than duplicative, increasing their overall effectiveness. Subnational actors gain access to shared tools, evaluations and expertise, which helps them design higher-quality, more impactful programmes.
Capacity building and learning opportunities: Co-ordination platforms provide spaces for peer learning and knowledge exchange among regions and municipalities. Smaller municipalities, in particular, benefit from the experience and institutional capacity of larger cities and autonomous communities.
A proposed mapping of national DDC frameworks
Approaches to DDC vary significantly across DAC countries, reflecting diverse governance systems, institutional arrangements and political priorities, which do not permit a single common definition (OECD, 2023[17]). Some countries have established comprehensive legal and institutional frameworks governing the DDC activities in their country, while others rely more on case-based approaches that emerge from the initiatives of individual regions or municipalities. To capture this diversity, the preliminary mapping presented in Figure 5.2 categorises national systems along two critical axes: the level of subnational authority, which measures the legal autonomy of LRGs to act internationally, within the DDC arrangements examined in this report, and the level of national steering, which assesses the extent to which the national government creates a harmonised framework for DDC activities. This includes aspects of co-ordination, such as strategic planning, as well as accountability in the form of coherent M&E frameworks. This mapping refers to the formal DDC funding, programmes and reporting arrangements examined in this report. It does not characterise the constitutional allocation of competences or the broader autonomy of subnational governments which in some federal systems fall under provincial and territorial jurisdiction. The intersection of these axes creates four illustrative types: centrally steered (low level of subnational authority and high degree of national steering), co-ordinated pluralism (strong subnational authority and high degree of national steering), organic dispersion (strong subnational authority and low degree of national steering), and a case‑based approach (low level of subnational authority and low degree of national steering). The countries included in the mapping are those that report DDC flows to the OECD CRS. The text following the mapping includes information on the governance systems of additional countries that do not report DDC flows to the OECD CRS where available (including from OECD DAC peer reviews, desk research and survey results).
Note: Based on 15 DAC countries reporting DDC ODA to the CRS.
The mapping is offered as a starting point for reflection and does not claim to be exhaustive or definitive. Its purpose is to stimulate discussion and should be seen as a tentative framework that can be further developed and modified. This mapping is intended as a simplification to help understand patterns, but, in reality, the distinction between approaches is often blurred, forming more of a continuum. DAC countries reporting their DDC flows to the CRS have been mapped for illustrative reasons, to provide a useful basis for comparing institutional landscapes. However, in many countries including those mapped in this report, different mechanisms coexist and a single country can display overlapping features of this typology. The differences between the models are expounded in more detail below and in the following sections.
Centrally steered: Under this approach, engagement from the national government directs subnational actors with low autonomy. National authorities typically define strategic priorities and policy orientations, control the bulk of budgeting and funding allocations and establish the frameworks for implementation and M&E. While subnational governments act as key implementers, their strategic autonomy is limited, as their activities are largely guided by centrally defined foreign policy and development objectives, often reinforced through financial incentives and co‑ordination requirements. A structured M&E and reporting system is another defining feature of this approach. France serves as a classic example of this model: its strongly centralised framework steers local authorities through strategic priority setting and co-financing incentives; All decentralised co-operation activities must align with nationally defined geographic (notably Africa) and thematic (sustainability, human rights, global public goods) priorities, with the national government co-financing up to 70% (or 90% for least developed countries) of projects meeting these criteria. Canada can also be categorised under this approach. Within the flows captured in this report's data, a large share of Canadian subnational DDC is channelled through the Federation of Canadian Municipalities (FCM), using funds from Global Affairs Canada and subject to federal M&E frameworks. Provinces, territories, municipalities and other subnational actors also undertake international activities through other arrangements. Likewise, Japan has a highly centralised system with a central co-ordination function given to the Japan International Cooperation Agency (JICA). While JICA manages the strategic and budgetary oversight, local governments are essential implementers (JICA, n.d.[18]). In Portugal, development co-operation including from subnational entities is primarily steered through the Camões Institute.
Co-ordinated pluralism: Under this approach, highly autonomous actors collaborate within a strong national strategic framework. National governments provide robust co-ordination, funding, support for M&E, etc. to ensure that autonomous local actions contribute to a cohesive national and international development policy. Germany can be categorised as an example of this approach. In Germany, federal states have significant autonomy in international affairs related to their constitutional competencies. However, the country has developed a range of institutional and programmatic tools to co‑ordinate DDC activities at the national level, including inter-governmental dialogue platforms, joint funding mechanisms and co‑operation frameworks involving federal ministries and implementing agencies, although Germany faces co‑ordination challenges in DDC (OECD, 2018[16]). Spain is also representative of this typology, particularly following efforts to significantly strengthen co-ordination with its Law 1/2023 on Co-operation for Sustainable Development and Global Solidarity (OECD, 2025[19]). While under the German approach, the national government plays a role through the various funding mechanisms, the Spanish approach is characterised by a high level of financial autonomy of subnational authorities and strong co-ordination of development co-operation activities and policies. Another country that could be categorised under this approach is Switzerland. The Swiss model reflects a sophisticated synergy between sovereign Cantons and the Swiss Agency for Development and Cooperation.
Organic dispersion: This approach is characterised by a high degree of legal and financial autonomy for subnational governments, often rooted in a federal constitution. However, there are limited or voluntary national mechanisms to align their actions, leading to a diverse but potentially fragmented DDC landscape. Belgium – where regions (i.e. Brussels-Capital, Flanders, Wallonia) run entirely independent DDC programmes with their own laws – is representative of this approach. Similarly, Italian regions have high authority and their own DDC legislation. While the national agency (AICS) facilitates co-financing, the overall landscape remains fragmented. In Austria, provinces (Bundesländer) have significant authority to engage in international co-operation, but national co-ordination is non-binding and focused on information sharing rather than strategic steering.
Case-based approaches: Under this approach, both local authority and national steering are relatively low. DDC exists on a small scale, often driven by individual municipalities or regions, without systematic frameworks, resources or recognition in national development policy. Initiatives may depend on OECD-funded pilot programmes or local political will. Poland would be representative of this approach. Since joining the European Union, municipalities have engaged in partnerships (especially with Ukraine and neighbouring countries), but these remain ad hoc with limited central support. In the following sections, there will be no detailed description of ad hoc approaches as they are difficult to depict in a systematic way. In countries that are relatively new members of the DAC, including Estonia, Latvia and Lithuania, municipalities have legal rights to act, but receive little support in the form of dedicated national funding or structured M&E frameworks. In the United Kingdom, most local authorities, especially in England, have only limited financial room to fund development co‑operation and operate without a dedicated, nationwide policy and funding framework for DDC. Local authorities in Scotland and Wales benefit from somewhat stronger political recognition and support for international engagement through devolved‑government strategies, which explains why they are more prominent providers of DDC.
National action to enhance the effectiveness of DDC
National governments can deploy a range of tools and levers to support the DDC activities of LRGs. These tools are embedded in their institutional, legal and political cultures and traditions, and therefore take diverse forms across countries. Building on the mapping developed in the previous section, the following section dissects the primary instruments at a national governments’ disposal – legal and regulatory frameworks, targeted funding arrangements, capacity-building initiatives, national reporting, M&E frameworks – to analyse how they are designed and implemented to promote, enable, incentivise and implement DDC in different national contexts. Figure 5.3 shows how these action areas can help address the barriers to effective DDC, which have been mentioned in the above section.
While these positive impacts are clear, it is important to acknowledge that strengthening co‑ordination mechanisms can be costly and time‑consuming, particularly given that DDC typically represents only a small share of total ODA. For many countries, the administrative effort required to align actors, establish reporting systems and maintain dialogue across levels of government may appear disproportionate to the financial scale of the activities involved. Moreover, there is no one-size-fits-all approach: countries operate within diverse institutional settings, traditions and levels of decentralisation, which shape how co‑ordination can realistically be pursued. In this context, there will be a need to prioritise the areas of co‑ordination that are most urgent and feasible within each institutional system, building organically on existing systems, practices and capacities rather than creating entirely new structures.
Enabling and steering DDC through legal and regulatory frameworks
National governments are uniquely positioned to provide strategic direction and coherence to DDC. By creating legal frameworks that enable and steer DDC and by establishing mechanisms that connect and align the efforts of local and regional actors, they ensure that partnerships abroad contribute to overarching national development and foreign policy objectives. This helps to address the problem of fragmentation and duplication of efforts, which was listed above as the primary challenge to effective DDC. In the centrally steered model, the legal framework provides a clear, top-down mandate that empowers a central body to direct DDC. In comparison, the co-ordinated pluralism or the organic dispersion approach often rests on a legal framework designed to create a predictable and supportive environment for highly autonomous actors.
France has a multi-layered and dynamic legal framework that empowers and guides its local authorities. The cornerstone of France’s DDC is the Law of 6 February 1992 on the Territorial Administration of the Republic, which recognises the capacity of local authorities to engage in “external action” and to sign co‑operation agreements with foreign local authorities (Republic of France, 1992[20]). This law further established the principle that such co-operation must respect France’s international commitments and be carried out within the scope of the local authority’s competence. Furthermore, there are sector-specific laws, which allow local authorities and public agencies to allocate up to 1% of their specific budgets to international solidarity actions. These include the Oudin-Santini Law for water and sanitation services (Republic of France, 2005[21]) and the Law on Energy for public electricity and gas distribution (Republic of France, 2006[22]). Law No. 2014-773 of 7 July 2014 on the orientation and programming related to development policy and international solidarity extended the possibility of allocating up to 1% of sector budgets to the field of waste management (Article 14) (Republic of France, 2014[23]).
With the evolution of development co-operation laws in France, the institutional framework for DDC became more consolidated. The Law of 7 July 2014 established a comprehensive legal framework, setting out the principles (solidarity, sustainability, human rights) and geographic and thematic priorities (especially Africa and global public goods) of French development co-operation, and introduced mechanisms for transparency, evaluation and multi-actor participation (Republic of France, 2014[23]). This law had the effect of integrating the action of local authorities into the broader national development strategy. This integration was further reinforced through the Programming Law on Development and the Fight Against Global Inequalities of 4 August 2021 (Republic of France, 2021[24]), which significantly reinforced the role of local authorities in development co-operation by explicitly recognising them as full development actors, integrated into both the design and implementation of France’s international solidarity policies. The law requires that all decentralised co-operation activities financed by French local authorities be identified, collected, and tracked, with the Delegation for Local Authorities and Civil Society (Délégation pour les collectivités territoriales et la société civile, DCTCIV) serving as the central hub for gathering these data, often via calls for reporting from local governments. Therefore, DDC activities are now integrated into France’s national ODA accounting, which the French Ministry for Europe and Foreign Affairs submits to the OECD CRS.
Spain enhanced the standing of DDC activities through the Law on Cooperation for Sustainable Development and Global Solidarity (Law 1/2023) in 2023 (Government of Spain, 2023[25]). While the previous legal framework for development co-operation did not clearly define DDC, Law 1/2023 assigns a central place to DDC by formally acknowledging the role of LRGs in development co-operation as an integral part of Spain’s official co-operation architecture. LRGs retain autonomy, but the law creates space for enhanced co-ordination, consultation and alignment ensuring that subnational actions fit within national strategies and international commitments. The Master Plan for Sustainable Development and Global Solidarity (Plan Director de la Co-operación Española 2024-2027) (Government of Spain, 2024[26]), which aligns with the 2023 Law on Cooperation for Sustainable Development and Global Solidarity, outlines a strategy to enhance collaboration with DDC actors, for example, through regular consultations between the Ministry of Foreign Affairs, European Union and Cooperation, the Spanish Agency for International Development Co-operation (AECID) and DDC actors such as Autonomous Communities and representatives of local governments through the Spanish Federation of Municipalities and Provinces (FEMP) and the Confederation of Co-operation and Solidarity Funds (CONFOCOS), the Sectoral Conference on Sustainable Development Cooperation, chaired by the Minister, and the Sectoral Commission, chaired by the Secretary of State for International Cooperation.1 Furthermore, the master plan encourages the involvement of autonomous communities and local entities in sharing their specialised knowledge in areas such as public service management, regional development, and social inclusion. The plan also advances the integration of DDC into Spain’s national knowledge management and evaluation systems through the systematic collection and analysis of data on the experiences and impact of projects implemented by regional and local actors.
In Germany, there is no unique law that forms the basis for development co-operation but rather a compilation of different laws at the federal and state levels (OECD, 2023[13]). The German constitutional law (Basic Law) does not explicitly refer to the policy area of development co-operation, but it grants the federal states (Länder) significant autonomy in international affairs related to their constitutional competencies. Federal states can conclude treaties with foreign countries with the consent of the federal government, as far as they are solely responsible for the legislation in the policy area concerned by the treaty (e.g. in education). This is a powerful enabler of authority, giving states a strong legal footing for their DDC work. Federal states have been involved in development co-operation activities since the 1950s and co-ordinate activities through the Conference of Federal State Prime Ministers (Ministerpräsidentenkonferenz, MPK). As part of the MPK, the federal states agree, among other topics, on non-binding policy guidelines for DDC, which provide political support for the states’ DDC activities. A series of MPK resolutions on development co-operation have expanded the scope of DDC activities. Within this framework, federal states can take very different approaches and follow different priorities. For example, Bavaria uses its DDC activities amongst others to create a network on the African continent, contributing to strengthening economic ties, promoting economic growth and supporting Bavarian companies. Berlin has the objective to contribute to global justice and therefore works mainly on projects that raise awareness of these issues and contribute to the fight against racial discrimination. Moreover, municipal DDC activities are also permitted. Each state decides within which boundaries municipalities are allowed to frame and implement their local development policies, while international political action outside of the respective core competencies of the municipalities is a prerogative of the federal government (OECD, 2023[13]). However, because there is no single, unified federal DDC law that covers all actors, this same constitutional framework necessitates the creation of separate co-ordination mechanisms. These include entities such as the Service Agency Communities in One World (Servicestelle Kommunen in der Einen Welt, SKEW), which acts as a central service and funding hub for German municipalities (cities, towns and districts) to bridge the different levels of government (OECD, 2018[16]). The law enables autonomy but requires the government to use non-legal, programmatic tools to encourage coherence.
As a federal state with a complex division of powers, Belgium’s approach represents the organic dispersion model. The regions (Brussels-Capital, Flanders, Wallonia) and linguistic communities have exclusive competencies in many areas, including the power to sign international treaties related to these competencies (CoE, 2026[27]). This means that regions can conduct their own development co-operation policy, often with a distinct strategic focus. The Government of Flanders had concentrated its efforts on a small number of partner countries including Malawi, Mozambique and Morocco, using detailed Country Strategy Papers (CSPs) to guide multi-year interventions in specific sectors. In September 2025, however, due to budgetary constraints, the Government of Flanders announced that development co-operation would no longer be considered an essential task of the regional government, discontinuing its bilateral programmes with immediate effect. From 2026, the remaining budget of EUR 4.7 million is directed to multilateral co-operation and humanitarian aid only. .
Setting incentives through funding arrangements
Financial incentives are arguably the most powerful tool that national governments use to operationalise their DDC model. As pointed out above, a lack of financial resources is perceived to be the main barrier preventing LRGs’ from achieving intended local governance and SDG outcomes through their DDC activities. Often, funding from national governments is a critical enabler. As mentioned in Chapter 3, around 68% of respondents to the OECD DDC impact surveys relied on some form of funding from the national government. For LRGs leveraging national government funding, these resources represent about 44% of their overall DDC budget (Figure 5.4, Panel A). LRGs rated financial incentives in the form of co‑financing to be the most helpful of all listed forms of government support, which included governance and legal frameworks, guidelines for DDC operations, matching services and technical advice and capacity building. They were rated an average score of 4.2 on a scale of 1 to 5 points in terms of how helpful they are in enhancing the benefits and impacts of their DDC activities on local governance and SDG outcomes (Figure 5.4, Panel B).
Note: Number of respondents in parentheses.
Source: OECD (2025[5]), “OECD Surveys on the Impact of Decentralised Development Co-operation on Local Governance and Sustainable Development Goal Outcomes”, Unpublished, OECD, Paris.
The financial relationship between a central government and its subnational actors is a critical determinant of the scale, scope and strategic alignment of DDC. The specific design of funding mechanisms often corresponds to a country’s position within the DDC mapping and reflects whether the primary goal is to strategically steer, collaboratively enable or catalytically support subnational action. The following examples illustrate how these distinct funding philosophies are put into practice across the different quadrants, shaping the DDC landscape in each country.
Germany offers a suite of funding instruments to enable and promote DDC, while ensuring the diversity of programmes. SKEW offers different funding schemes, which are designed to be accessible to local governments of all sizes and to support a wide range of DDC activities, from initial engagement to large‑scale projects. For example, under the Partnership Projects for Sustainable Local Development (Nakopa) programme, a German municipality and its partner in the Global South can apply for grants (typically up to EUR 250 000) to fund concrete projects in areas like water supply, waste management, renewable energy or sustainable mobility. The municipality must contribute a portion of the funding (usually at least 10%) (OECD, 2018[16]). SKEW also provides smaller grants for specific, targeted activities. This includes funding for fact-finding missions to identify new partnerships, support for promoting fair trade and sustainable procurement within municipal administrations, and grants for educational and awareness-raising work in the German community. The German Government and Federal States Programme (BLP) acts as a co-financing mechanism designed to foster collaboration and leverage the specific technical expertise of the state-level ministries (OECD, 2018[16]). A German state (Land) identifies an area of its specific expertise (e.g. vocational training systems, mining governance) that is relevant to a partner country where the federal development agency (Deutsche Gesellschaft für Internationale Zusammenarbeit, GIZ) is already active. The project is then jointly designed and funded. The federal government contributes up to 60% of the project costs, while the participating federal state must provide at least 40%. This state contribution can be financial or in-kind (e.g. the time of expert civil servants from a state ministry). The projects are then implemented by GIZ in co-operation with the state’s experts.
In France, co-financing is the primary instrument of strategic steering. The national government runs a system of annual or triennial calls for projects (appels à projets) through the Delegation for Local Authorities and Civil Society (DCTCIV). This co-financing mechanism is a powerful enabler that both provides crucial funding and strategically steers LRGs by targeting specific themes and geographic regions. Each year, there is a call for thematic focus areas (e.g. climate adaptation, gender equality, health systems, youth, governance) or regional projects (French Government, 2024[28]). This directs local authorities to align projects with France’s global commitments (SDGs, Paris Agreement). Local authorities can submit their DDC project applications. If a project is accepted, the national government usually co-finances up to 50% of the eligible project budget (for ODA recipients), with the remainder covered by the French local authority (and sometimes other partners). By offering higher co-financing rates for projects in least developed countries, this system creates a clear incentive structure. For least developed country projects, the national government can raise its contribution ceiling, up to 70% of eligible costs.
Canada takes a similarly centralised approach to managing and funding municipal DDC projects. Global Affairs Canada (GAC), the department of the Government of Canada that manages Canada’s diplomatic and consular relations, enters into master contribution agreements with the Federation of Canadian Municipalities (FCM to deliver international municipal co-operation programmes (FCM, 2026[29]). Major FCM programmes funded by GAC are typically designed and financed over multi-year periods, usually ranging from three to six years. These are envelope programmes, which can fund multiple projects in parallel. The master agreement sets objectives, eligible activities, the total contribution envelope, reporting timetables, audit clauses, performance indicators and procurement rules. The FCM implements the agreements by designing specific programmes. Some projects are directly implemented by the FCM while others are multi-partner municipal partnerships in which municipalities join with their own budgetary or in‑kind contributions. Based on specific programme requirements, the FCM then issues calls for partner municipalities or staff, and Canadian municipalities or municipal staff participate by responding to those calls, offering peer expertise, or joining programme consortia.
Italy is moving from a relatively scattered approach towards a more deliberate use of co-funding arrangements. Italy’s funding of development co-operation activities was reported to face challenges such as fragmentation of initiatives and a multiplicity of competitive grant procedures (OECD, 2019[30]). However, new initiatives to solidify funding and align it with national development priorities are emerging. In April 2025, the Joint Committee for Development Cooperation under the Ministry of Foreign Affairs and International Cooperation established a EUR 40 million fund specifically for projects implemented by Italian regions in countries receiving Italian development aid (Italian Government, 2025[31]). The objective is to strengthen the role of regions in advancing Italy’s foreign policy goals and contributing to the UN 2030 Agenda through territorial partnerships. The fund operationalises the commitment laid out in the triennial programming document (Documento Triennale di Programmazione e di Indirizzo 2024-2026) to “use calls for proposals to fund initiatives carried out by LRGs, as a tool to promote their active participation and encourage their contribution to development initiatives” and to explore new forms of “collaboration to encourage a more active role for local authorities in setting priorities, shaping calls for proposals, selecting operational tools to deploy in partner countries, and more broadly in involving other actors of the Italian system” (Government of Italy, 2025[32]). Prior to the establishment of the fund, the Italian Agency for Development Cooperation (AICS) had issued tenders to support DDC. For example, in 2024, the AICS launched a large-scale EUR 180 million tender, of which EUR 60 million was dedicated to territorial entities (Government of Italy, 2024[33]). The fund was established to implement the Mattei Plan for Africa, a flagship initiative of the Italian government to establish a new model of co-operation between Italy and African countries, focusing on energy, agriculture, research, education, healthcare and infrastructure development. The tender prioritised projects in African countries, allocating 85% of funding to realise programmes in these countries and 15% to remaining countries.
Under Belgium's federal structure, development co-operation competences are shared between the federal level (Directorate-General for Development Cooperation and Humanitarian Aid, DGD) and the regions (Brussels-Capital, Flanders, Wallonia), which have their own co-operation budgets (OECD, 2025[34]) Municipal DDC has been supported through distinct channels. In Flanders, municipalities received co-funding (often 50–75% of project costs) for partnerships with Global South municipalities through the Association of Flemish Cities and Municipalities (VVSG) under the Flemish Government's development co-operation programme; this support was discontinued from 1 January 2026, following the Government of Flanders' decision of September 2025 to end its bilateral development co-operation. In Wallonia and Brussels, municipal partnerships are supported through the Programme de Coopération Internationale Communale, implemented by the Union des Villes et Communes de Wallonie and Brulocalis and financed by the federal DGD.
Investing in institutional capacities
Financial support is only effective when LRGs have the skills and institutional capacity to use it properly. National governments provide crucial non-financial support, such as knowledge exchange and capacity building, but the delivery model for this support differs significantly across the mapping, reflecting the specific relationship between the central state and its subnational actors. This support helps overcome capacity constraints, which have been named as another barrier to effective DDC.
In France, the capacity-building component is embedded in the funding and centrally managed. The DCTCIV acts as the primary provider of training for LRG staff, part of which is integrated into the system of calls for projects. Projects that are accepted in the call, qualify for capacity-building support on project cycle management, M&E and thematic issues. This centralised approach ensures that the capacity being built is directly aligned with the standards and priorities required for national co-financing, reinforcing the model’s overall coherence.
In Germany, the national government often provides capacity building to close gaps in DDC implementation capacity of LRGs. SKEW acts as a dedicated competence centre and service hub for German municipalities and their partners. It is funded by the federal government but operates as a dedicated service provider for municipalities. It offers different forms of capacity building – ranging from workshops to personnel support – that municipalities can access voluntarily. This model respects local autonomy while providing the essential support needed to deepen the development expertise at the local level. A key tool in this model is personnel support, where SKEW co-finances DDC officers in municipalities, a transformative measure to institutionalise capacity locally. The previously mentioned BLP programme also promotes networking and the exchange of knowledge between the actors from the federal states to strengthen the competencies of the federal states, e.g. through regular training. A special focus lies on agile methods to find innovative solutions to development challenges (GIZ, 2025[35]).
Spain presents a highly structured system for supporting LRGs that combines federal agency support, strong regional leadership and joint observatories. The Spanish Federation of Municipalities and Provinces (FEMP), with support from the Ministry of Foreign Affairs, European Union and Cooperation), runs training workshops, manuals and technical exchanges for municipalities on how to design, implement and report DDC projects. Fully funded by the Barcelona Provincial Council (Diputació de Barcelona) and managed in partnership with the municipal government of Montevideo (Intendencia de Montevideo), the Observatory on Decentralised Cooperation (Observatorio de la Cooperación Descentralizada) serves as a knowledge hub and capacity-building platform. It produces methodological guides, organises peer-learning events and connects European LRGs with their Latin American and Caribbean counterparts, Spanish LRGs also benefit from regular capacity-building seminars convened by the AECID and regional development co‑operation agencies (e.g. Andalusia, Basque Country, Catalonia). These cover project cycle management, policy coherence, SDG localisation and evaluation techniques.
Managing for impact: national approaches to reporting and M&E
National governments can also provide support to address the lack of data, transparency and accountability, which was the last of the barriers to effective DDC. To justify public expenditure, learn from experience and maximise development impact, a systematic approach to reporting and M&E is essential. As explained in Chapter 3, the OECD DDC impact surveys and case study interviews revealed that systematic assessment of DDC activities is not widespread among LRGs. National governments can play a critical role in shaping the M&E landscape for DDC. As with other policies, governments’ approaches are shaped by their position within the mapping. The methods used to manage for impact range from top-down mandatory reporting systems designed to ensure strategic alignment, to the collaborative development of shared frameworks and the provision of voluntary tools to build capacity from the ground up.
France provides a clear illustration of a structured M&E approach. The goal is to ensure that all subnational projects align with national priorities and to aggregate data to demonstrate collective, national-level achievements. The DCTCIV, as the central co-ordinating and co-financing body, mandates specific M&E requirements as part of its co-funding arrangement. To access national funds, French LRGs must submit detailed project proposals using standardised formats that include a logical framework, clear indicators and a results-based budget. Throughout the project, they are subject to strict reporting requirements, submitting both narrative and financial reports according to a pre-defined schedule. Data from these reports are collected centrally. All co-financed DDC activities are systematically included in France’s national ODA reporting to the OECD DAC. The public Atlas of Decentralised Cooperation serves as a national transparency and monitoring tool, making project data accessible to all. This standardised data collection allows the DCTCIV to monitor its entire portfolio, track progress against its strategic objectives and report on the collective impact of French DDC to parliament and the public. However, DDC activities not co-financed by the national government are not legally required to be reported to central authorities, nor do they have to comply with the M&E requirements.
The Korean2 M&E system presents another example of a centralised model. Local governments engaging in DDC are recognised as implementing agencies under the oversight of the Committee for International Development Cooperation (CIDC), a national government entity. When LRGs engage in DDC activities, they have the legal obligation to develop an annual evaluation plan of their DDC activities, conduct evaluations ex ante, mid-term or ex post, depending on the project, and submit the results to the CIDC secretariat (Republic of Korea, 2018[36]). However, challenges exist in practice, as many local governments lack dedicated ODA staff or evaluation expertise. Since 2018, the Ministry of Foreign Affairs and the Korea International Cooperation Agency have hosted annual capacity-building workshops for local ODA officers to improve monitoring and alignment with national strategy.
In Spain, the national government acts as a facilitator, fostering a shared M&E culture that respects the autonomy of subnational governments. The aim is not to impose a single, detailed system, but to co-create a common framework that allows for harmonisation and demonstrates collective results. The national government does not dictate the specific M&E methodologies for autonomous. Instead, the master plan creates a shared strategic framework through common, high-level indicators tied to the SDGs, which all actors report against. This approach allows the national government to aggregate data for its international reporting (e.g. to the OECD DAC) while allowing each region to maintain its own detailed, project-level M&E systems. This fosters a sense of mutual accountability and collaborative learning among actors.
The Dutch M&E approach is one of delegation. The Dutch Ministry of Foreign Affairs is a major strategic partner and funder of the International Cooperation Agency of the Association of Netherlands Municipalities (VNG International), typically through multi-year framework agreements. For ODA reporting purposes, the ministry reports its large, programmatic grant to VNG International (VNG International, 2025[37]). The detailed reporting on the results of individual city-to-city partnerships is managed within the VNG International system and is reported back to the ministry at a high, strategic level against the overall programme goals. This delegation arrangement means the national government does not collect detailed, project-level data from every municipality. Similarly, there is no single, state-mandated M&E framework for DDC. Instead, VNG International has developed its own robust, results-based M&E methodologies and tools tailored specifically to local government co-operation. These tools are used consistently across the projects it manages, creating a high degree of internal coherence. An external evaluation of the programme between the government and VNG International assesses the overall success of the partnership, including its contribution to local governance (VNG International, 2025[38]).
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