DAC Work on Multilateral Aid

Emily BoschDAC Network on Development

Evaluation10 February 2010

Multilateral Aid and the DAC

1. Aid Predictability: Forward Spending Survey

2. Division of Labour: Global Fragmentation & Concentration

3. Annual Multilateral Aid Report

Forward Spending Survey

• Only global survey on donors’ future aid

• Survey shows little sign of raised levels of ambition for 2010 targets, outlook for 2011 no more encouraging.

• Multilateral agencies account for most of increased allocations to LICs

Global Fragmentation & Concentration

• Bilateral and Multilateral donors

• Donor fragmentation across countries is increasing

• Allocation rules do not internalise aid from other donors

Non-significant donor relationships: Opportunities for concentration

Multilateral Trends

• +/- 30% share of multilateral ODA

• 2008: 82% ML aid to IDA, EC, UN, Global Fund

• Even greater concentration when non-core or funds channelled through multilaterals is included, special topic in 2010 report

Gross ODA provided by DAC members countries 1987 – 2008

20%

22%

24%

26%

28%

30%

32%

34%

36%

38%

40%

'87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 03 '04 '05 '06 '07 '08

Multilateral ODA as share of total ODA 1987-2008(disbursements )

(DAC Members, excluding EC and including Korea)

multilateral as share of gross ODA excluding bilateral debt relief (%)

multilateral as share of gross ODA (%)

Multilateral ODA disbursements by DAC member 2006 - 2008 annual average

(in USD billions, excluding debt relief)

Trends of Multilateral Aid Allocation

Total bilateral ODA = 116 bn

Bilateral, Non-core and Core Multilateral Aid in 2008 (Disbursements from DAC members in USD)

Multi-bi/non-core = 16 bn

Multilateral ODA = 36 bn

Bilateral ODA (excluding multi-bi) = 100 bn

Total use of multilateral organisations = 52 bn

DAC countries

ODA recipients

IDA Regionalbanks

EC UN agencies

Other multi

99 bn 54 bn 25 bn 37 bn

( ) Reflows (not including interest payments)

643 bn

100 bn 40 bn** 87 bn

(18 bn)

33 bn

(9 bn)

26 bn

Total multilateral inflows = 276 bn

Total flows to ODA recipients (bilateral aid + multialteral outflows) = 957 bn

( 9 bn)(4 bn) (1 bn)*

( 87 bn)

ODA Gross disbursements (core contributions) and reflows 1999-2008, cumulative (excluding debt relief)

Constant 2007 USD billionSource: DAC aggregated statistics

2 bn

* Reflows to IFAD. * Outflows based on proportion of UN agencies that report to the DAC

IDA

2 bn

Total ODA-eligible inflows = 61 bn; inflows to agencies reporting to the DAC = 36 bn

Conclusions

• Objective of work is to provide evidence for more rational allocation of aid.

• Multilateral work so far looks more in-depth at how bilateral donors fund multilateral agencies.

To what extent does the perceived or real effectiveness of multilateral agencies affect the allocation of multilateral aid?