In September, Development Initiatives (DI) published a background paper outlining the various components of official development assistance (ODA) modernisation – or aid reform. Since then, more details have been published by the OECD Development Assistance Committee (DAC) on some aspects of ODA modernisation. The October high-level meeting (HLM) of the DAC has also addressed some of these issues. The results of the discussions at the HLM are outlined in their official communiqué.
This briefing provides an update to our earlier background paper and specifically addresses areas where there remains a need for clarification:
- How will donors report Private Sector Instruments (PSIs) as ODA?
- How will blended finance be monitored at an institutional level?
- Under its new guidelines, the DAC has excluded certain categories of spending on in-donor refugee costs; however, as such spending is reported to the DAC as an aggregate figure, there’s no indication as to whether any donors are reporting categories of spending that are excluded under the new guidelines, or not reporting expenditure that is allowable.
As well as establishing the need for further guidelines on the three areas listed above, the briefing provides updates on two other subjects:
- The outcome of recent discussions regarding the potential for declaring funding for post-hurricane reconstruction in Caribbean countries (such as the British Virgin Islands) as ODA, despite such countries no longer falling below the Word Bank’s High-Income threshold.
- The need for clarification on some terminology in the DACs’ recently published Peace and Security handbook to make certain that activities causing physical or mental harm to citizens are excluded from ODA.
Ensuring donors can report their ODA accurately is critical for effective aid spending, and also to ensure the process is transparent. As ODA data is published and updated, DI will continue to interrogate the implications of these changes for how aid is delivered and reported.
Photo: Asian Development Bank