8.3 Proportion of bilateral official development assistance of OECD/DAC donors that is untied

Modified on 2012/11/05 13:40 by MDG Wiki Handbook — Categorized as: Goal 8

Contents

GOAL AND TARGET ADDRESSED

Goal 8. Develop a global partnership for development Target 8B. Address the special needs of the least developed countries. Includes: tariff and quota-free access for least developed countries’ exports; enhanced programme of debt relief for HIPCs and cancellation of official bilateral debt; and more generous ODA for countries committed to poverty reduction.

DEFINITION AND METHOD OF COMPUTATION

Definition
This indicator accounts for the proportion of bilateral official development assistance (ODA) excluding technical cooperation and administrative costs provided by Organisation for Economic Co-operation and Development/ Development Assistance Committee (OECD/DAC) donor countries directly to developing countries that is untied.

This indicator is expressed as a percentage.

Concepts
Bilateral assistance covers flows that are provided directly by a donor country to an aid recipient country.

Official development assistance (ODA) comprises grants and loans (i.e. flows or transfers of resources, either in cash or in the form of commodities or services) to developing countries and territories on the OECD/DAC list of ODA recipients and to multilateral development institutions that are provided by official agencies, including state and local governments, or by their executive agencies. The flows must have the promotion of the economic development and the welfare of the recipient countries as their main objective. ODA transactions are made at concessional terms and convey a grant element of at least 25 per cent (calculated at a rate of discount of 10 per cent). Technical cooperation is included. Grants, loans and credits for military purposes are excluded.

The Organisation for Economic Co-operation and Development/Development Assistance Committee (OECD/DAC) is a committee that consists of major bilateral donor countries and the European Commission, which coordinate their aid programmes around common objectives.

Developing countries and territories for this indicator are considered as countries eligible for ODA according to the DAC list of ODA recipients. (See references for link to current list of countries).

Untied aid is assistance which is fully and freely available to finance procurement of the associated goods and services from all countries.

Method of computation
The indicator is calculated by dividing the net bilateral ODA of a donor country that is untied by the total net bilateral ODA of that country and multiplying by 100.

RATIONALE AND INTERPRETATION

Tying assistance to procurement of goods and services from suppliers in the donor country reduces its cost-effectiveness in meeting the needs of developing countries. Recognizing this, OECD/DAC member countries have increased the share of their aid that is untied. The majority of aid to the least developed countries (LDCs) is now untied following the 2001 Recommendation on Untying Aid to LDCs. The exception is food aid and some technical co-operation which are exempt from the Recommendation.

SOURCES AND DATA COLLECTION

Data on ODA are part of DAC members’ official statistical reporting to the OECD. Non-DAC donors' reporting takes place on a voluntary basis. A network of national statistical correspondents collects data from aid agencies and government departments (central, state and local) on an ongoing basis. Their task is also to ensure that reporting conforms to the Statistical Reporting Directives (definitions and classifications) agreed by the DAC. The DAC Secretariat responds to any questions about the data and can also give users advice on data analysis.

DISAGGREGATION

Data on ODA flows of untied aid can be disaggregated by donor, recipient country or geographical region, as well as by sector and aid activity.

COMMENTS AND LIMITATIONS

The tying status of bilateral ODA excludes expenditures for technical co-operation and administrative costs. Also, tying status varies across sectors, and is more difficult to achieve for donors for some types of aid, like technical co-operation and food aid, than for others.

Donor reporting to the DAC on tying status has improved significantly over the years, and all DAC members are now reporting their aggregate tying status. Donor validation of the tying status of aid extended by local governments and government departments other than the main aid agency would also improve data. More detailed reporting at activity level would enable full disaggregation of the data.

GENDER EQUALITY ISSUES

ODA can support gender equality and women’s empowerment. Donors score relevant activities with a gender equality policy marker as defined by the DAC. This marker identifies activities which are focused principally or significantly on achieving gender equality and women’s empowerment and it is possible to identify the degree to which these are untied. Untied ODA could support gender equality and women’s empowerment directly by untying aid to activities associated with the procurement of goods and services from women.

DATA FOR GLOBAL AND REGIONAL MONITORING

The OECD is the agency in charge of publishing global data related to untied aid.

All data on ODA are collected by the OECD/DAC Secretariat from its 24 country members, then checked and aggregated. The DAC Secretariat collects data from donors through two different systems:
The DAC Working Party on Statistics reviews the operation of the data collection system in annual formal meetings, and in informal meetings. The OECD/DAC Secretariat checks the data and their compliance with the methodology. Bilateral work with reporters is undertaken as necessary in order to resolve reporting issues.

Data are published annually by OECD at the end of the calendar year in the International Development Statistics (IDS) database. Regional and global aggregates are calculated by straight addition and do not involve any estimation for missing values.

SUPPLEMENTARY INFORMATION



EXAMPLES



REFERENCES

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT. DEVELOPMENT ASSISTANCE COMMITTEE (annual). DAC Untied Aid Dedicated Website. Paris. Internet site http://www.oecd.org/dac/untiedaid

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT. DEVELOPMENT ASSISTANCE COMMITTEE (annual). Development Co-operation Report. Paris. Available from http://www.oecd.org/dac/dcr

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT. DEVELOPMENT ASSISTANCE COMMITTEE (annual). International Development Statistics. Paris. Available from http://www.oecd.org/dac/stats/idscd

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT. DAC List of ODA Recipients. Paris. Available from www.oecd.org/dac/stats/daclist

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT. DAC Statistical Reporting Directives. Paris. Available from http://www.oecd.org/dac/stats/dacdirectives

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT . Directives for reporting to the aid activity database (Creditor Reporting System). Paris. Available from http://www.oecd.org/dac/stats/crsdirectives