URU, Alm.del - 2015-16 - Endeligt svar på spørgsmål 198: Spm., om de nuværende OECD-DAC regler giver mulighed for at overvåge, hvilken procentsats de forskellige donorlande anvender til mindst udviklede lande, til udenrigsministeren

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Organisation de Coopération et de Développement Économiques

Organisation for Economic Co-operation and Development

DCD/DAC/STAT(2015)29

27-Oct-2015

___________________________________________________________________________________________

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English - Or. English

Development Co-operation Directorate

Development Assistance Committee

DCD/DAC/STAT(2015)29

Unclassified

English - Or. English

DAC Working Party on Development Finance Statistics

BETTER TRACKING OF ODA ALLOCATION: ASSESSING MULTI-COUNTRY ODA

2-3 November 2015

This document is submitted for

DCD/DAC/STAT/A(2015)5/PROV.

DISCUSSION

under

Item

the

draft

annotated

agenda

The paper provides a first analysis of the current reporting on multi-country ODA and presents options to better

reflect members’ efforts in LDCs, including explore opportunities for improved statistical reporting and options

and potential impact of imputing a share of multi-country ODA towards LDCs.

Fredrik Ericsson - Tel +33 (0)1 45 24 19 65 - e-mail: [email protected];

Suzanne Steensen - Tel +33 (0)1 45 24 76 23 - e-mail: [email protected]

JT03385162

Complete document available on OLIS in its original format

This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of

international frontiers and boundaries and to the name of any territory, city or area.

URU, Alm.del - 2015-16 - Endeligt svar på spørgsmål 198: Spm., om de nuværende OECD-DAC regler giver mulighed for at overvåge, hvilken procentsats de forskellige donorlande anvender til mindst udviklede lande, til udenrigsministeren

DCD/DAC/STAT(2015)29

TABLE OF CONTENTS

BETTER TRACKING OF ODA ALLOCATION: ASSESSING MULTI-COUNTRY ODA .......................3

Long-standing methodology to calculate ODA to LDCs.............................................................................4

More efforts needed to meet the LDC ODA commitments .........................................................................5

Multi-country ODA accounts for one-third of total ODA ...........................................................................8

Options and potential impact of imputing global and regional ODA to LDCs .........................................13

Considerations for discussion ....................................................................................................................18

Questions for consideration .......................................................................................................................18

ANNEX 1: SIMULATIONS OF IMPUTING MULTI-COUNTRY ODA TO LDCS .................................19

Tables

Table 1.

Table A.1.

Table A.2.

Table A.3.

Table A.4.

Potential impact on DAC members’ net ODA to LDCs (2013) ............................................17

Simulations of DAC members' net ODA to LDCs as a share of GNI (2013) ........................19

Simulations of DAC members' net ODA to LDCs as a share of total ODA (2013) ..............20

Simulations of DAC members’ net ODA volume to LDCs (2013) .......................................21

Simulations of DAC members’ net ODA volume of global and regional estimate (2013) ...22

Figures

Figure 1.

Figure 2.

Figure 3.

Figure 4.

Figure 5.

Figure 6.

(2013)

Figure 7.

Figure 8.

Figure 9.

DAC countries’ total net ODA and net ODA to LDCs (2000-2014) ......................................6

DAC countries’ net ODA to LDCs as a share of GNI (2012-2013) ........................................7

DAC members’ net ODA to LDCs as a share of total ODA (2012-2013) ..............................8

DAC countries’ total net ODA by country-allocable and multi-country ODA (2007-2013) ..9

Volume of DAC countries’ multi-country net ODA (2013)..................................................10

DAC countries’ multi-country ODA by global and regional allocation, excl. in-donor costs

...............................................................................................................................................10

DAC countries’ global and regional ODA by sector, excl. in-donor costs (2013) ...............11

DAC countries’ global and regional ODA by type of aid, excl. in-donor costs (2013) ........12

DAC countries’ net ODA by country-allocable and multi-country ODA (2013) .................14

Boxes

Box 1. Imputing multilateral ODA ..............................................................................................................4

DCD/DAC/STAT(2015)29

BETTER TRACKING OF ODA ALLOCATION: ASSESSING MULTI-COUNTRY ODA

OECD DAC statistics are a cornerstone in the global accountability system and the main source

for monitoring the UN ODA targets to provide 0.7% of GNI in ODA to developing countries of which

0.15-0.20% to least-developed countries (LDCs).

The decision reached by DAC Ministers at the 2014 HLM to

allocate more of total ODA to

countries most in need

and to

collectively reverse the declining trend of ODA to LDCs

further underscored

the importance of effective monitoring of members’ performance against these targets. The Addis Ababa

Agenda for Action (AAAA) also

encouraged ODA providers to consider setting a target to provide at

least 0.20 per cent of ODA/GNI to LDCs

and was

encouraged by those who are allocating at least 50 per

cent of their ODA to

LDCs.

The increased focus on the monitoring of ODA to LDCs has sparked a methodological debate

regarding the calculation of providers’ total contribution to this group of countries. While the current

methodology only acknowledges country-allocable ODA to LDCs, multi-country ODA,

i.e.

ODA flows

that are reported as global or regional, are not taken into consideration in the calculations although it can be

argued that a portion of these allocations benefits LDCs.

As such, the current methodology under-

estimates providers’ efforts in supporting LDCs.

At the last WP-STAT meeting in May 2015, Canada initiated a discussion to develop a

methodology to include a share of providers’ global and regional programmes as ODA to LDCs to more

accurately show members’ total efforts in supporting the LDCs. Members welcomed the initiative, but also

recognised the importance to better understand members’ current reporting on global and regional ODA.

This paper aims to provide a first analysis of the nature of global and regional ODA and to

highlight options to better reflect members’ efforts in LDCs. In particular, the purpose of this paper is to:



take stock on ODA flows to LDCs, recalling the UN target supported by many members, and

remind members of the current methodology to calculate ODA to LDCs.

For the latest list of LDCs, see

http://unohrlls.org/about-ldcs/.

The proposed target 17.2 of the Sustainable

Development Goals (SDGs) also requests

developed countries to implement fully their official development

assistance commitments, including the commitment by many developed countries to achieve the target of

0.7 per cent ODA/GNI to developing countries and 0.15 to 0.20 per cent of ODA/GNI to least developed

countries; ODA providers are encouraged to consider setting a target to provide at least 0.20 per cent of

ODA/GNI to least developed countries

Addis Ababa Agenda for Action para 51-52, available at:

http://www.un.org/esa/ffd/ffd3/wp-

content/uploads/sites/2/2015/07/Addis-Ababa-Action-Agenda-Draft-Outcome-Document-7-July-2015.pdf

In this paper, the term “multi-country ODA” comprises global and regional ODA. “Global ODA” covers

all ODA flows that are reported as bilateral unallocated, recipient code 998. “Regional ODA” covers all

ODA flows that are reported using the following recipient codes: 88, 89, 189, 289, 298, 380, 389, 489, 498,

589, 619, 679, 689, 789,798, and 889.

For example by not considering core support to NGOs, which is generally reported as global or regional

ODA, and contributions to global and regional trust funds and other initiatives.

For more information, see DCD/DAC/STAT/RD(2015)3/RD6 and DCD/DAC/STAT/M(2015)3.

DCD/DAC/STAT(2015)29



examine the current reporting on global and regional ODA and explore opportunities for

improved statistical reporting.

present options for imputing a share of global and regional ODA towards LDCs, including

simulations based on 2013 data.

While the focus of this paper is the calculation of ODA to LDCs, bearing in mind the specific UN

target on ODA to LDCs,

any methodology presented can also be applicable to calculate ODA to other

groups of countries most in need,

e.g.

low-income countries (LICs), small island developing states

(SIDS), landlocked developing countries (LLDCs), and fragile and conflict-affected states.

Long-standing methodology to calculate ODA to LDCs

The methodology for calculating ODA to LDCs is a well-established practice in DAC statistics,

dating back to the original formation of the UN LDC target in 1981.

It attempts to reflect bilateral

providers total ODA efforts to countries on the LDC list, based on bilateral net ODA flows and imputed

multilateral ODA [see Box 1].

Box 1. Imputing multilateral ODA

DAC statistics have traditionally been focused on presenting provider effort. Therefore, the

imputation method used by the OECD is designed to calculate the amount of each provider’s multilateral

ODA that can be attributed to individual recipients. There are three steps in this calculation:

1. The country shares of each multilateral agency’s total annual gross disbursements are calculated.

2. The shares derived in step 1) are multiplied by a donor's core contribution (multilateral ODA) to the

same agency in the same year.

3. The results from step 2) for all agencies are summed to obtain the total imputed multilateral aid from

each provider to each recipient country.

Example:

In a given year, WFP provides 10% of its disbursements from core resources to Sudan. Provider

X contributes USD 50 million to WFP core resources in the same year. Provider X’s imputed multilateral

ODA to Sudan through WFP is 0.1 * USD 50 million = USD 5 million). This calculation is repeated for

each multilateral agency.

Source

: See: http://www.oecd.org/dac/stats/oecdmethodologyforcalculatingimputedmultilateraloda.htm

The target was set at the First United Nations Conference on the Least Developed Countries in Paris 1-14

September 1981 (Scott, S., 2015,

The accidental birth of “official development assistance”).

The 1981

Development Co-operation Report compares DAC members’ total net ODA to LDCs (based on bilateral

ODA and imputed multilateral ODA) as a share of Gross National Product (GNP).

DCD/DAC/STAT(2015)29

Imputed multilateral ODA is an estimate of bilateral providers’ indirect support to individual

recipients through funding of the multilateral system.

It can be calculated for all multilateral agencies that

report their outflows to the OECD. Core contributions to other agencies, for which the OECD does not

have outflow data, are not imputed back to the original funders. As a result, total ODA calculated on the

basis of bilateral ODA and imputed multilateral ODA remains slightly lower than total official net ODA as

reported to DAC statistics.

In 2013, imputed multilateral ODA represented 93% of DAC members’ total

multilateral ODA. The DAC Secretariat is working to close the gap by encouraging more multilateral

agencies to report their outflows, and examining CRS channel codes, rather than using DAC2a, for a more

detailed breakdown of multilateral agencies.

The DAC Secretariat is also standardising its presentation on ODA to LDCs across publications.

Although previous DAC peer review assessments of provider efforts towards LDCs were often limited to

bilateral net ODA, the standard methodology in assessing members’ performance against the UN LDC

target has been integrated into more recent reviews of members’ development co-operation policies in

accordance with the HLM agreement.

More efforts needed to meet the LDC ODA commitments

10.

The recent commitments made by DAC Ministers at the 2014 HLM and in the Addis Ababa

Agenda for Action mark a historical milestone in shifting ODA allocations to LDCs, which have fallen in

recent years. Although DAC ODA to LDCs more than doubled between 2000 and 2010, preliminary

estimates indicate a decline in aid to LDCs since the peak in 2010 – from USD 46 billion in 2010 to 40

billion in 2014 in constant 2013 prices, a decline of 13 per cent in real terms. Preliminary figures for 2014

suggest that DAC bilateral net ODA to LDCs decreased by 3.5 billion (-12 per cent in real terms) between

2013 and 2014. This is despite stable levels of total DAC ODA in 2014, after hitting an all-time high in

2013.

11.

Preliminary figures of assistance from multilateral agencies collected through the recent Survey

on Forward Spending Plans also revealed lower volumes of multilateral assistance to LDCs in 2014,

although planned increases will begin in 2015. The Survey also indicated that country-level aid to LDCs

should recover over the next few years after several years of decline, in line with the 2014 DAC HLM

commitment.

Figure 1 presents DAC countries’ total net ODA and net ODA to LDCs from 2000 to 2014

(bilateral and imputed multilateral).

Note that there are several methods to impute concessional outflows by multilateral agencies back to the

funders of those agencies; however, any methodology for imputing multilateral flows can only ever be an

approximation. There are several reasons why multilateral flows in a given year do not match with

providers’ contributions in that year, including the time lag between receiving and spending funds, adding

resources from reflows and interest payments of loans and internal transfers of funds within the agencies.

In 2013, this difference amounted to USD 2.9 billion.

The DAC Secretariat is also working to establish a methodology to impute multilateral ODA by other

dimensions,

e.g.

although there is no regular methodology for calculating sectoral imputed multilateral

ODA, this has been done occasionally in the context of sectoral studies.

For more information about the survey and data on providers’ latest spending plans, see

www.oecd.org/dac/aidoutlook

10 .

DCD/DAC/STAT(2015)29

Figure 1. DAC countries’ total net ODA and net ODA to LDCs (2000-2014)

* 2014 preliminary estimates

12.

Collectively, DAC countries do not meet the UN ODA target of allocating 0.15-0.20 per cent of

GNI to LDCs. In 2013, total DAC ODA to LDCs represented 0.10 per cent of total DAC GNI.

Nine DAC

countries

provided more than 0.15 per cent of their GNI as ODA to LDCs and 6 of these provided more

than 0.20 per cent of their GNI as ODA to LDCs. Figure 2 presents the latest figures on DAC countries’

ODA to LDCs in relation to their GNI.

11 .

While data collection of final 2014 flows is still on-going, preliminary estimates based on the advance

questionnaire and the Survey on Forward Spending Plans indicate that DAC ODA to LDCs represented

0.09 per cent of total DAC GNI in 2014.

They were: Belgium (0.16%), Denmark (0.27%), Finland (0.19%), Ireland (0.23%), Luxembourg (0.38%),

the Netherlands (0.17%), Norway (0.30%), Sweden (0.31%) and the United Kingdom (0.24%).

12 .

DCD/DAC/STAT(2015)29

Figure 2. DAC countries’ net ODA to LDCs as a share of GNI (2012-2013)

13.

The DAC has previously discussed the possibility of setting new voluntary targets to increase aid

to LDCs in addition to the UN target.

The encouragement in the AAAA

vis-à-vis

a voluntary target of

50% of total net ODA to LDCs increased the importance to also monitor members’ performance based on

their individual ODA volumes. On average, DAC countries allocated one-third of their ODA to LDCs in

2013, an increase from 31% in 2012.

Only Ireland and Japan allocated at least 50 per cent of their ODA

to LDCs. Figure 3 presents the latest figures on DAC countries’ ODA to LDCs in relation to total net

ODA.

13 .

14.

See for example DCD/DAC(2014)20.

Preliminary estimates suggest that this share declined to 29% in 2014.

DCD/DAC/STAT(2015)29

Figure 3. DAC members’ net ODA to LDCs as a share of total ODA (2012-2013)

* Note that flows from the EU institutions are included as imputed multilateral ODA for DAC countries. However, EU institutions are shown in

this graph for comparison purposes.

Multi-country ODA accounts for one-third of total ODA

14.

Multi-country ODA represents a growing share of total ODA. In 2007, one-fourth of DAC

countries’ total net ODA was reported as global or regional. By 2013, this share had grown to nearly one-

third (32%). Half of this increase can be attributed to a rapid increase in in-donor costs, in particular in-

donor refugee costs which more than doubled between 2007 and 2013 and which are expected to continue

to rise in the coming years. The remaining increase can be explained by additional funding to international

initiatives and global and regional trust funds, research and bilateral programmes.

DCD/DAC/STAT(2015)29

Figure 4. DAC countries’ total net ODA by country-allocable and multi-country ODA (2007-2013)

1. For the purpose of this graph and benchmarking against total ODA, the “non-imputable part” of multilateral ODA is considered global

and regional ODA. In 2013, the “non-imputable part” of multilateral ODA represented 2% of total ODA.

15.

Most multi-country ODA is reported as globally unallocated ODA. The share of global ODA has

increased from 70% during the mid-2000s to 75% of total multi-country ODA in 2013. A large part of this

is due to increasing in-donor costs, which are generally reported as global ODA in accordance with the

DAC statistical directives.

In 2013, 42% of DAC members’ global ODA could be attributed to in-donor

costs, amounting to USD 11.9 billion and a significant increase from 33% in 2007. The share of global

ODA is reduced to two-thirds of total multi-country ODA if these expenditures are excluded. Half of the

regional ODA is allocated to Africa, while the remaining half is mainly split by Asia and countries in the

Americas.

16.

While in-donor costs represent provider effort, it is debatable to what extent these expenditures

should be considered as support to individual countries. In line with the approach outlined by Canada in its

discussion paper

Imputing Member’s Regional Programs for Statistics on ODA to Least Developed

Countries

presented at the previous WP-STAT, in-donor costs have been excluded from the rest of the

analysis in this paper.

15.

Specifically, the DAC statistical directives state that “the

category “bilateral, unallocated” is used if an

activity benefits several regions. It is also used for a number of activities undertaken in donor countries

such as administrative costs not included elsewhere, development awareness and certain refugee costs.”

The in-donor costs that have been excluded are: administrative costs, refugee costs in donor country,

promotion of development awareness and imputed student costs.

16 .

DCD/DAC/STAT(2015)29

Figure 5. Volume of DAC countries’ multi-country net ODA (2013)

Figure 6. DAC countries’ multi-country ODA by global and regional allocation, excl. in-donor costs (2013)

17.

A further breakdown of bilateral global and regional ODA reveals different sectoral patterns.

While nearly one-fourth of globally unallocated ODA is allocated to the health sector, other sectors which

often benefit many countries, such as economic infrastructure and productive sectors, are key target areas

for regional ODA. A large share of global ODA is also reported as multi-sector ODA. This is mainly

because of aggregated reporting on activities and lack of information on NGO outflows.

DCD/DAC/STAT(2015)29

Figure 7. DAC countries’ global and regional ODA by sector, excl. in-donor costs (2013)

Global ODA (USD 15.7 billion)

Regional ODA (USD 6.9 billion)

18.

Global ODA contains a large share of activities where the allocation decisions are often taken

outside of the providers’ direct control, e.g. core funding to NGOs, and where the main beneficiary

countries may not be the same as in the providers’ own portfolio. In 2013, one-third of global ODA was

reported as pooled funding or contributions to trust funds, global initiatives or NGOs. An additional 10%

can be classified as research activities across a wide range of sectors.

19.

Roughly half of global and regional ODA is reported as project-type interventions, amounting to

USD 11.2 billion in 2013. This category contains a wide variety of activities, including bilateral global or

regional programmes, equity investments, aggregated projects, and earmarked funding to multilateral

organisations. The activities are also spread over all sectors and across all of the main channels. The

different nature of activities reported under this category, as well as the lack of information, makes it

difficult to assess to what extent the main beneficiaries belong to a certain group of countries, e.g. LDCs,

or if these activities benefit all countries alike. Further research could explore this category in greater

detail.

DCD/DAC/STAT(2015)29

Figure 8. DAC countries’ global and regional ODA by type of aid, excl. in-donor costs (2013)

Global ODA (USD 15.7 billion)

Regional ODA (USD 6.9 billion)

1. Note that these graphs include research as a separate category. This is to indicate support to research activities (which is not a type of aid

category), which may benefit a larger number of recipient countries than some of the other categories. The identification of research activities is

based on text search within the project title description field as well as the following purpose codes: 11182 (Educational research), 12182 (Medical

research), 23082 (Energy research), 31182 (Agricultural research), 31282 (Forestry research), 31382 (Fishery research), 32182 (Technological

research and development), 41082 ( Environmental research) and 43082 (Research/scientific institutions).

20.

A closer examination of each provider’s largest 20 global and regional activities reveals not only

a significant variety in the types of projects, but also lack of descriptive information on the nature of these

activities. Several members aggregate small projects and activities and report these as global or regional

ODA without adequate description on the type of activities included or the main beneficiary countries. For

example, some of the descriptions of DAC members’ largest CRS records reported as global and regional

ODA are limited to statements such as ‘aggregate’, ‘common services’ or ‘various projects’. The lack of

information also makes it difficult to assess the best way to impute the amount of ODA to LDCs.

Improved reporting by disaggregating these activities, or at least providing more meaningful

descriptions, is crucial for transparency and a requirement to better understand how these activities

support individual countries.

21.

More collaborative efforts to collect outflows from development partners receiving official

support, e.g. the NGO community, could also improve the information base on main beneficiaries

and raise member’s ODA to LDCs.

In 2013, 14 DAC members reported more than 95% of their core

support to NGOs as global or regional ODA. As a result, two-thirds of DAC members’ total core support

to NGOs could not be specified by country.

Improved statistical collaboration with development partners

could improve the reporting of core funding activities. In 2013, four DAC members used the bi-multi code

indicating

ex-post reporting on NGOs’ activities funded through core contributions (CRS

bi-multi code 7).

Even though the ex-post reporting did not cover all of their core support to NGOs, it contributed to

increasing their ODA to LDCs and lifting their performance towards the LDC targets by a few percentage

points.

In 2013, DAC members’ reported 2.3 billion as global and regional ODA out of a total of 3.3 billion

reported as core support to NGOs.

These were Belgium, Ireland, Italy and Switzerland.

17.

18.

DCD/DAC/STAT(2015)29

22.

Enhanced reporting to the CRS on main beneficiaries of global and regional expenditures,

including contributions to trust funds and other international programmes and initiatives, would

allow for a better assessment of how these activities support LDCs and other countries.

While it can

be assumed based on the number of LDCs that a regional programme in Africa would support LDCs to a

greater extent than a similar programme in Latin America, it is currently difficult to assess to which extent

global expenditures benefit this group of countries.

23.

The Netherlands undertook an internal assessment of its global and regional programmes in 2014

and ascertained that in many regional or worldwide activities the actual number of potential beneficiary

countries was rather limited. For example, only 15 countries were eligible for a global scholarship

programme. Rather than imputing the share of the total activity expenditures across all developing

countries, the imputation could therefore be reduced to the 15 eligible countries. This exercise nearly

doubled the Netherlands’ share of ODA to LDCs.

The DAC Secretariat encourages other members to

follow the Netherlands example and undertake similar exercises in order to improve the evidence

base on global and regional programmes.

Options and potential impact of imputing global and regional ODA to LDCs

24.

Enhanced reporting on multi-country ODA can contribute to better assessments of members’

total efforts in LDCs; however, improved reporting practices might not be sufficient. The notion of

imputing a share of multi-country ODA flows to provide a better estimate of members’ efforts in LDCs has

emerged in recent years. While developing a methodology can be an appealing option, it will be important

that any methodology for imputing multi-country ODA be based on sound empirical evidence and robust

enough to withstand public scrutiny.

25.

Each DAC member has its own priorities, values and set of norms that underpin its development

co-operation policy and its strategic allocation of official resources for development. At the same time,

providers’ internal systems and reporting practices differ across the DAC membership. Consequently, the

total share of ODA a provider can report to individual countries differs across members. While some

members can report the specific recipient of their activities for most of their ODA flows, other members

report more activities as global or regional ODA.

26.

The potential impact on imputing a share of global and regional ODA towards LDCs therefore

depends on the size of each member’s global and regional ODA. For countries where large bilateral loan

portfolios make up a significant portion of ODA, e.g. Korea, Japan and Portugal, any imputation method

would result in minor changes to the current calculation of ODA to LDCs. For other countries the impact

of imputing a share of global and regional ODA could lead to a significant increase in the volume of ODA

benefitting LDCs, e.g. Denmark, the Netherlands and Norway. Figure 8 presents the share of each DAC

member’s net ODA that is reported as global and regional ODA.

19 .

Information on this exercise is based on bilateral discussion with the Netherlands.

DCD/DAC/STAT(2015)29

Figure 9. DAC countries’ net ODA by country-allocable and multi-country ODA (2013)

27.

The discussion paper presented by Canada at the WP-STAT meeting in May 2015 highlighted

some guiding principles of possible methods to impute a share of global and regional ODA to LDCs. Any

method needs to be credible and easy to explain, accurate in its representation of members’ efforts in LDCs

and predictable in order to allow providers to plan their budgets accordingly.

It is also crucial to find a

methodology which does not disincentivise improved reporting on global and regional ODA flows.

28.

There are several possible methods which could fulfil these criteria; however, for the purpose of

this paper, five methods are presented. Several of these methods have been discussed earlier, either as part

of DAC discussions on ODA allocations or as options in the discussion paper presented by Canada.

However, it is important to bear in mind that this list of methods is neither exhaustive nor that any agreed

solution must solely be based on one method. For example, different methods might be required depending

on the type of aid,

e.g.

while project-type interventions could be assumed to follow a provider’s general

20.

See for example DCD/DAC(2014)9, DCD/DAC(2014)20 and DCD/DAC/STAT/RD(2015)3/RD6.

DCD/DAC/STAT(2015)29

allocation pattern, core resources to development partners and trust funds could be assumed to be

distributed more equal across populations and/or countries.

29.

The five methods to estimate the share of members’ global and regional ODA that can be

attributed to LDCs are:



Method 1: Fixed share for all providers, e.g. 50 per cent of global and regional ODA to LDCs.

This method was used to highlight this issue as part of the discussion paper on development finance

for the DAC SLM in March 2014. It is the simplest solution; however, it would rely on an arbitrary set

threshold that does not adequately represent each member’s individual development co-operation

programme.

Example:

if provider X reported USD 100 million as global and regional ODA excluding in-donor

costs, then 50% of this amount, or USD 50 million, would be added to the calculation of provider X’s

ODA to LDCs.



Method 2: Relative share based on providers’ own country allocations within the same

geographic area

Method 2 was used in DAC discussion paper

Targeting ODA Towards Countries In Greatest Need

[DCD/DAC(2014)20] in May 2014. The method assumes members’ global and regional ODA follow

similar patterns as their country-allocable ODA. As such, method 2 imputes global and regional ODA

to LDCs based on the same provider’s overall country-allocable ODA within the same region.

Following this methodology, each member’s specific allocation pattern is taken into account, resulting

in more empirically sound estimations.

Example:

if provider X reported USD 10 million as South and Central Asia unallocated and allocated

80% of all its country-allocable ODA within South and Central Asia to LDCs, the volume of its

regional ODA to LDCs would be estimated to USD 8 million. The same approach is used for each

region. For global ODA, all country-allocable ODA is used as the basis for the estimation.



Method 3: fixed share based on the relative population size of LDCs within the same geographic

area

Method 3 is based on the assumption that global and regional ODA do not necessarily follow the same

allocation pattern as the allocation decisions. Since actual allocation is unknown, method 3 assumes a

proportionate allocation based on the population size of all countries within the same region.

Example:

provider X reported USD 10 million as Sub-Saharan Africa unallocated. In 2013, the

estimated population in the Sub-Saharan region was 930 million, of which 560 million people lived in

LDCs. The estimated share of provider X’s regional allocation targeting LDCs could therefore be

assumed to be 560 / 930 = 60%. The volume of its Sub-Saharan regional ODA attributed to LDCs

would then be estimated to USD 6 million. For global ODA, the total population in ODA eligible

countries would be used for the estimation.



Method 4: fixed share based on the share of LDCs within the same geographic area

Method 4 assumes equal distribution of resources across countries rather than by population size. As

such it is a simple solution, which globally also respond to the systematic small country bias in aid

allocation, meaning that small countries receives a proportionally higher share of total ODA than more

populous countries. However, it can be discussed whether assuming equal distribution of resources

DCD/DAC/STAT(2015)29

across countries is an appropriate method considering that LDCs represent one-third of all ODA

eligible countries, but only 16% of the total population in developing countries.

Example:

provider X reported USD 100 million to Asia, regional. There are 35 ODA eligible

countries within Asia, of which 9 are LDCs. The estimated volume of provider X’s contribution to

LDCs in Asia would therefore be (9/35) * 100 = USD 26 million.



Method 5: relative share based on providers’ sector allocations and the share of their allocations

to LDCs within the same sector

Methods 2-4 were all based on country allocations; however, it can also be argued that sector

distribution would provide a stronger evidence base of the volume or resources that could be assumed

to benefit LDCs. For example, the provision of development food aid mainly targets LDCs while

ODA to production sectors and economic infrastructure could to a higher degree supports other

countries.

Method 5 imputes global and regional ODA based on each provider’s country allocations

of resources within each sector.

Since no standard methodology to impute multilateral ODA by sector and recipient currently exists,

the simulation presented in tables A.1. and table A.2. for this method is based on a combination of

imputing bilateral global and regional ODA according to method 5 and imputed multilateral ODA

according to method 2.

Example:

Provider X reported USD 100 million as global and regional development food aid. At the

same time, LDCs received 90% of provider X’s total development food aid allocated to countries. The

estimated volume of provider X’s global and regional contribution to LDCs within this sector would

therefore be 0.9 * 100 = USD 90 million.

30.

Table 1 shows the potential impact on members’ performance towards the global LDC targets by

adding a global and regional estimate to the calculation of ODA to LDCs in 2013.

The range presented is

based on simulations of the five imputation methods. Annex 1 presents the simulations for each imputation

method.

31.

The simulations show that total DAC ODA that could be attributed to LDCs would increase by

USD 6–14 billion if a global and regional estimate was added to the calculation. This represents an

increase in the share of total DAC ODA to LDCs by 4-10 percentage points. Three additional providers

would also have reached the 0.15% UN target (Iceland, Japan and Switzerland) and four countries would

have surpassed the voluntary target of 50 per cent of ODA to LDCs (Denmark, Finland, Iceland and the

Netherlands). These changes are highlighted in Table 1.

21 .

22.

While this is not the case for all DAC members, the simulation exercise reveals that DAC members on

average allocate a higher share of ODA to economic sectors to countries beyond the LDC group.

All simulations presented in this paper exclude in-donor costs from the imputation. In addition, the

simulations are based on imputing both bilateral and imputed multilateral global and regional ODA. While

the majority of global and regional ODA is bilateral, there are important multilateral contributions to global

and regional challenges which also benefits LDCs. Although the simulations presented in this paper are

based on one-year estimates in accordance with the methodology for imputed multilateral ODA, other

approaches could use 3 or 5-year averages to smooth out yearly fluctuations in ODA allocation.

DCD/DAC/STAT(2015)29

Table 1. Potential impact on DAC members’ net ODA to LDCs (2013)

Net ODA to LDCs as a share of GNI

Current methodology

without global and

regional estimate

Australia

Austria

Belgium

Canada

Czech Republic

Denmark

Finland

France

Germany

Greece

Iceland

Ireland

Italy

Japan

Korea

Luxembourg

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Slovenia

Spain

Sweden

Switzerland

United Kingdom

United States

Total DAC

Countries

EU Institutions

Total DAC

1. This is the estimated range based on

calculation of ODA to LDCs.

0.09%

0.08%

0.16%

0.10%

0.03%

0.27%

0.19%

0.12%

0.09%

0.02%

0.12%

0.23%

0.05%

0.14%

0.05%

0.38%

0.17%

0.07%

0.30%

0.02%

0.07%

0.02%

0.03%

0.31%

0.12%

0.24%

0.06%

0.10%

Possible range with a

global and regional

estimate

0.10% - 0.11%

0.09% - 0.10%

0.18% - 0.21%

0.12% - 0.13%

0.03% - 0.04%

0.33% - 0.44%

0.22% - 0.27%

0.13% - 0.14%

0.11% - 0.14%

0.02% - 0.03%

0.13% - 0.18%

0.25% - 0.29%

0.05% - 0.06%

0.14% - 0.15%

0.056% - 0.061%

0.42% - 0.49%

0.23% - 0.38%

0.08% - 0.09%

0.35% - 0.45%

0.028% - 0.033%

0.07% - 0.08%

0.026% - 0.03%

0.027% - 0.033%

0.04% - 0.05%

0.37% - 0.46%

0.13% - 0.16%

0.28% - 0.34%

0.065% - 0.075%

0.11% - 0.13%

Total share of net ODA to LDCs

Current methodology

without global and

regional estimate

27%

29%

35%

37%

25%

32%

35%

29%

24%

19%

46%

50%

28%

60%

41%

38%

25%

28%

26%

29%

24%

17%

19%

31%

26%

35%

33%

Possible range with a

global and regional

estimate

29% - 34%

33% - 37%

39% - 46%

43% - 49%

27% - 32%

38% - 52%

42% - 51%

31% - 35%

29% - 36%

22% - 27%

50% - 69%

54% - 63%

31% - 35%

63% - 67%

42% - 46%

42% - 49%

34% - 56%

30% - 36%

33% - 42%

29% - 34%

31% - 34%

27% - 32%

20% - 25%

22% - 27%

36% - 46%

30% - 36%

40% - 48%

36% - 42%

37% - 43%

24%

27% - 30%

32%

36% - 42%

simulations of five methods of attributing a share of global and regional ODA to the

DCD/DAC/STAT(2015)29

Considerations for discussion

32.

The current methodology for calculating ODA to LDCs undervalues providers’ efforts in

supporting LDCs. The growing share of global and regional ODA justifies a closer examination of these

activities and possibly adapting the methodology in order to provide a better estimate of providers’ full

efforts. However, there are also political risks involved. Changing the long-standing methodology could be

perceived as inflating figures if applied to monitoring of the UN LDC target.

33.

The potential to improve statistical reporting and raise members’ country-allocable share of ODA

should also not be underestimated. More detailed reporting would most likely also raise members’

performance against the LDC target. Any methodology for imputing multi-country ODA should not

disincentivise improved statistical reporting. Therefore, it is recommended that any imputation method is

only applied to ODA flows which clearly benefit LDCs, but where allocation of resources is not under the

direct control of the provider.

34.

It will be important that DAC members individually assess their multi-country ODA, including

examining possible improvements to their ODA reporting, with the aim of developing a plan of action to

be discussed at the forthcoming informal WP-STAT in the spring of 2016. Based on such assessments,

DAC members’ are invited to provide guidance on the possible scope and the most robust method to

impute a share of multi-country ODA to LDCs and other countries most in need.

Questions for consideration

35.

At the meeting of the WP-STAT on 2-3 November 2015, members are invited to comment

on the above analysis of multi-country ODA and respond, in particular, to the following questions:



To what extent can members’ improve their reporting practices in order to raise the share of

ODA broken down by individual countries?

Do members support developing a methodology to impute a portion of global and regional

ODA to LDCs?

If so, what should be the basis for imputation?

a) Should certain types of in-donor costs,

e.g.

administrative costs, be included?

b) Should all types of aid and/or sectors be considered?

DCD/DAC/STAT(2015)29

ANNEX 1: SIMULATIONS OF IMPUTING MULTI-COUNTRY ODA TO LDCS

Table A.1. Simulations of DAC members' net ODA to LDCs as a share of GNI (2013)

Method 5

(incl. regional

estimate based

on providers'

ODA sector

allocation and

the share of

LDCs within

each sector)

0.10%

0.09%

0.19%

0.13%

0.03%

0.36%

0.24%

0.13%

0.12%

0.02%

0.13%

0.28%

0.05%

0.14%

0.06%

0.46%

0.33%

0.09%

0.42%

0.03%

0.07%

0.03%

0.04%

0.42%

0.14%

0.32%

0.07%

0.12%

n.a.

Current

methodology

(no

global/regional

estimate)

Method 1

(incl. 50% of

global and

regional ODA)

Method 2

(incl. regional

estimate based

on providers'

ODA allocation

within each

region)

0.11%

0.10%

0.21%

0.13%

0.03%

0.44%

0.27%

0.13%

0.12%

0.02%

0.18%

0.29%

0.05%

0.15%

0.06%

0.49%

0.38%

0.09%

0.44%

0.03%

0.07%

0.03%

0.04%

0.46%

0.15%

0.34%

0.07%

0.13%

n.a.

Method 3

(incl. regional

estimate based

on the share of

population in

LDCs within

each region)

0.10%

0.09%

0.18%

0.12%

0.03%

0.33%

0.22%

0.13%

0.11%

0.02%

0.13%

0.25%

0.05%

0.14%

0.06%

0.42%

0.23%

0.08%

0.35%

0.03%

0.07%

0.03%

0.04%

0.37%

0.13%

0.28%

0.07%

0.11%

n.a.

Method 4

(incl. regional

estimate based

on the share of

LDCs within

each region)

0.10%

0.09%

0.19%

0.12%

0.03%

0.37%

0.24%

0.13%

0.12%

0.02%

0.14%

0.26%

0.05%

0.15%

0.06%

0.45%

0.28%

0.08%

0.40%

0.03%

0.07%

0.03%

0.04%

0.41%

0.15%

0.31%

0.07%

0.12%

n.a.

Australia

Austria

Belgium

Canada

Czech Republic

Denmark

Finland

France

Germany

Greece

Iceland

Ireland

Italy

Japan

Korea

Luxembourg

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Slovenia

Spain

Sweden

Switzerland

United Kingdom

United States

Total DAC

Countries

EU Institutions

Total DAC

0.09%

0.08%

0.16%

0.10%

0.03%

0.27%

0.19%

0.12%

0.09%

0.02%

0.12%

0.23%

0.05%

0.14%

0.05%

0.38%

0.17%

0.07%

0.30%

0.02%

0.07%

0.02%

0.03%

0.31%

0.12%

0.24%

0.06%

0.10%

n.a.

0.11%

0.10%

0.20%

0.13%

0.04%

0.41%

0.26%

0.14%

0.03%

0.16%

0.28%

0.06%

0.15%

0.06%

0.49%

0.32%

0.09%

0.45%

0.03%

0.08%

0.03%

0.05%

0.45%

0.16%

0.33%

0.07%

0.13%

n.a.

DCD/DAC/STAT(2015)29

Table A.2. Simulations of DAC members' net ODA to LDCs as a share of total ODA (2013)

Method 5

(incl. regional

estimate based

on providers'

ODA sector

allocation and

the share of

LDCs within

each sector)

30%

34%

42%

46%

29%

42%

46%

32%

30%

23%

50%

61%

32%

63%

44%

46%

49%

33%

39%

30%

32%

29%

21%

23%

41%

32%

45%

38%

40%

27%

39%

Current

methodology

(no

global/regional

estimate)

Method 1

(incl. 50% of

global and

regional ODA)

Method 2

(incl. regional

estimate based

on providers'

ODA allocation

within each

region)

32%

35%

46%

49%

29%

52%

51%

33%

31%

23%

69%

63%

33%

67%

45%

49%

56%

34%

41%

31%

32%

29%

21%

23%

46%

35%

48%

41%

43%

27%

41%

Method 3

(incl. regional

estimate based

on the share of

population in

LDCs within

each region)

29%

33%

39%

43%

27%

38%

42%

31%

29%

22%

53%

54%

31%

63%

42%

34%

30%

33%

29%

31%

27%

20%

22%

36%

30%

40%

36%

37%

27%

36%

Method 4

(incl. regional

estimate based

on the share of

LDCs within

each region)

32%

34%

42%

45%

29%

43%

45%

33%

31%

24%

57%

32%

64%

44%

45%

41%

32%

37%

31%

32%

29%

22%

24%

40%

33%

43%

39%

40%

27%

39%

Australia

Austria

Belgium

Canada

Czech Republic

Denmark

Finland

France

Germany

Greece

Iceland

Ireland

Italy

Japan

Korea

Luxembourg

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Slovenia

Spain

Sweden

Switzerland

United Kingdom

United States

Total DAC

Countries

EU Institutions

Total DAC

27%

29%

35%

37%

25%

32%

35%

29%

24%

19%

46%

50%

28%

60%

41%

38%

25%

28%

26%

29%

24%

17%

19%

31%

26%

35%

33%

24%

32%

34%

37%

45%

48%

32%

48%

49%

35%

36%

27%

61%

60%

35%

66%

46%

49%

47%

36%

42%

34%

32%

25%

27%

44%

36%

47%

42%

43%

30%

42%

DCD/DAC/STAT(2015)29

Table A.3. Simulations of DAC members’ net ODA volume to LDCs (2013)

Method 5

(incl. regional

estimate based

on providers'

ODA sector

allocation and

the share of

LDCs within

each sector)

1,467

400

959

2,283

1,238

656

3,679

4,313

513

1,106

7,331

770

198

2,647

151

2,181

145

156

543

2,387

1,015

8,064

11,758

54,135

4,214

58,349

Current

methodology

(no

global/regional

estimate)

Method 1

(incl. 50% of

global and

regional ODA)

Method 2

(incl. regional

estimate based

on providers'

ODA allocation

within each

region)

1,558

409

1,061

2,408

1,518

729

3,717

4,434

531

1,130

7,803

795

209

3,056

155

2,262

150

156

547

2,663

1,106

8,524

12,678

57,779

4,362

62,141

Method 3

(incl. regional

estimate based

on the share of

population in

LDCs within

each region)

1,418

385

901

2,137

1,119

599

3,536

4,069

459

1,050

7,261

740

181

1,870

135

1,836

140

152

519

2,117

959

7,089

11,202

50,042

4,220

54,262

Method 4

(incl. regional

estimate based

on the share of

LDCs within

each region)

1,528

398

965

2,239

1,270

651

3,724

4,437

482

1,104

7,456

768

195

2,239

147

2,067

150

157

561

2,337

1,043

7,739

11,985

53,817

4,331

58,148

Australia

Austria

Belgium

Canada

Czech Republic

Denmark

Finland

France

Germany

Greece

Iceland

Ireland

Italy

Japan

Korea

Luxembourg

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Slovenia

Spain

Sweden

Switzerland

United Kingdom

United States

Total DAC

Countries

EU Institutions

Total DAC

1,299

341

812

1,847

925

509

3,247

3,363

426

956

6,990

711

163

1,365

126

1,539

125

143

449

1,803

827

6,196

10,214

44,521

3,814

48,335

1,653

435

1,034

2,350

1,419

708

3,935

5,166

508

1,193

7,677

802

209

2,568

163

2,325

165

636

2,564

1,152

8,465

12,885

58,373

4,718

63,090

DCD/DAC/STAT(2015)29

Table A.4. Simulations of DAC members’ net ODA volume of global and regional estimate (2013)

Method 5

(incl. regional

estimate based

on providers'

ODA sector

allocation and

the share of

LDCs within

each sector)

168

147

437

313

147

432

950

150

341

1,282

642

584

188

1,867

1,544

9,614

400

10,014

Current

methodology

(no

global/regional

estimate)

Method 1

(incl. 50% of

global and

regional ODA)

Method 2

(incl. regional

estimate based

on providers'

ODA allocation

within each

region)

259

249

561

593

221

470

1,071

105

174

813

1,690

723

860

279

2,327

2,464

13,258

548

13,806

Method 3

(incl. regional

estimate based

on the share of

population in

LDCs within

each region)

119

290

194

289

706

271

505

297

313

132

893

988

5,520

406

5,927

Method 4

(incl. regional

estimate based

on the share of

LDCs within

each region)

229

153

393

345

142

476

1,074

148

466

874

528

112

534

216

1,543

1,770

9,296

517

9,813

Australia

Austria

Belgium

Canada

Czech Republic

Denmark

Finland

France

Germany

Greece

Iceland

Ireland

Italy

Japan

Korea

Luxembourg

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Slovenia

Spain

Sweden

Switzerland

United Kingdom

United States

Total DAC

Countries

EU Institutions

Total DAC

354

222

503

494

199

688

1,803

237

686

1,203

786

188

761

325

2,268

2,670

13,851

903

14,755