Official development assistance (ODA) that supports domestic resource mobilisation (DRM) is gaining increasing attention as discussions about financing the post-2015 agenda progress. Donors are playing important roles in aiding tax reforms, and there are calls to scale-up this assistance. But while the role of ODA in individual reform projects is well documented, little is known about the overall, aggregate picture of international assistance in this area.
Our Investments to End Poverty report argues that a greater awareness of all resources available to developing countries is essential to ending extreme poverty by 2030. This briefing uses analysis of the DAC’s Creditor Reporting System project level database to answer the question – how much aid goes towards domestic resource mobilisation?
- We identified projects totalling almost US$700 million of official development assistance (ODA) with a domestic resource mobilisation (DRM) element in 2011, including:
- US$104.6 million of ODA for projects with DRM as a primary objective, or ‘core’ ODA for DRM.
- US$579 million of ODA projects where DRM was an identifiable component, or ‘wider’ ODA for DRM.
- Core DRM projects account for less than one percent of total ODA (0.07% in 2011).
- Most of ODA for DRM goes to countries with low domestic capacity levels, but not all low domestic capacity countries receive ODA for DRM.
- Any scaling up of development cooperation that supports DRM in coming years should be rooted in a comprehensive understanding of the existing landscape of this form of ODA. Better recording and reporting of tax-related activities by donors will help ensure aid is effective and enable better coordination between institutions working in this area.
Read our full findings in our briefing here.