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Development finance topics

We help donors and recipients understand where development finance is expected and most needed so that they can better plan and co-ordinate.

Our insights, analysis and policy recommendations

Aid for trade

The Aid for Trade Initiative has allowed for the active engagement of a large number of organisations and agencies in helping developing countries and especially the least developed build the infrastructure and supply-side capacity they need to connect to regional and global markets and improve their trade performance.

We track aid-for-trade flows and share good practice so that developing countries can capitalise on the opportunities of international trade.

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Development finance of countries beyond the DAC

Emerging providers of development finance and other countries that are not members of the Development Assistance Committee (DAC) have an increasingly important role in financing development co-operation. This generates a stronger need for transparency on their development co-operation programmes.

Statistics, analyses and information on reporting by these countries to the OECD are available here. Estimates are published on countries that do not provide the OECD with data.

More about development finance of countries beyond the DAC

Global Outlook on Financing for Sustainable Development

The Decade of Action for the Sustainable Development Goals (SDGs) starts with a stumbling block: as the COVID-19 crisis unfolds, financing for sustainable development is at risk of collapse, with all resources available to developing countries under stress, domestic and external, public and private. The SDGs financing scissors effect – with increasing needs and declining resources – already observed in previous years has been magnified. At the same time, the COVID-19 crisis could also be a stepping stone for the 2030 Agenda: public actors have to step up to contain the crisis and lay the ground for building back better, and private actors feel a pressing need to better integrate global risks and evolving public incentives for building resilience and preserving the value of assets.

“SDG alignment” – the redirection of various sources of global finance towards the sustainable development of countries that need it most - is part of the solution to this conundrum: in times of crisis, when the mobilisation of new resources is difficult, all resources already available in the system should work for the common goals. It means shifting them to where the needs are, keep finance flowing to developing countries in particular, fixing leakages in transmission channels, making better use of each resource’s leveraging power, and increasing their quality or development impact.

This second edition of the OECD Global Outlook on Financing for Sustainable Development seeks to increase the transparency of the financing for sustainable development system, and assess the potential of “SDG alignment”. After assessing the macroeconomic context, it estimates the resources available and the costs of misalignment, and outlines a series of actions for governments and private actors to “stop the bleeding” in the short-term and “build back better” in the long-run.

Multilateral development finance

The OECD monitors development co-operation flows channelled through multilateral organisations and shares good practice to improve support to developing countries.

Over 200 multilateral organisations collectively receive about 40% of official development assistance and using these funds effectively will be fundamental in achieving the Sustainable Development Goals.

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Private sector

The OECD-DAC is playing a key role to ensure that the private sector contributes to the delivery of the Sustainable Development Goals (SDGs). This includes leveraging private investment for the SDGs and improving the quality of this investment.

Transition Finance

Work on ‘Transition finance’ recently launched by the DAC/OECD aims to better understand financing challenges and opportunities faced by countries as they move along the development continuum. It includes an analysis of dynamics affecting domestic and external flows as countries transition, including official development finance, remittances, philanthropy and private investment, with the ultimate objective of defining the right policy and financing mixes that will ensure long-term effects and resilience of support, as well as maximise the  contribution of development finance to the SDGs. It combines methodological papers, tools for transitioning countries and their partners, and country pilots. 

More about Transition Finance

What questions does the study of Transition Finance try to address?

  • How could the DAC help the phasing out of ODA and secure the progressive growth of other sources of financing (e.g. private or domestic), thereby securing long-term sustainable financing (e.g. by preserving debt sustainability)? 
  • How could the DAC increase the effectiveness of ODA, identifying the best and most innovative tools, policies and partnerships available along the development continuum to best serve the financial needs of transitioning countries?
  • How could the DAC design long-term support strategies that go beyond ODA? In other words, how could DAC members continue to support countries after ODA graduation to preserve the benefits of ODA in the longer term and avoid setbacks? 
  • What kinds of capacity building efforts, promotion of transfers of all kinds (from private investment to technologies or knowledge) and domestic resource mobilisation efforts, could be fostered by ODA during phasing out in anticipation of transition?

Transparency

Transparency is critical to ensure accountability between development partners and the intended beneficiaries of development. Transparent practices helps to ensure that funds reach their intended targets and results are achieved.

 More about transparency

The OECD DAC works towards a successful "transparency transformation" by:

  • developing instruments to help governments translate transparency into tangible improvements
  • supporting e-government and internet-based technologies and applications
  • providing regular reviews of development partner and donor countries, and
  • promoting greater transparency as a means to fight corruption.

Small Island Developing States (SIDS)

Because ODA is a scarce resource for financing development, it is important to ensure it reaches the countries and people that need it most. The OECD provides statistical data and policy analysis on concessional finance to Small Islands Developing States (SIDS) to enhance access to and quality of development finance to countries most in need and support the development of financial instruments and approaches that are tailored to SIDS’ specific circumstances and needs.

More about SIDS