Introduction: Charles Kenny
In a blog post published last week, I argued that the OECD’s Development Assistance Committee (DAC) is responding to dramatically falling volumes of aid less constructively than its response to a similar decline thirty years ago: today, it is considering changes that could see aid go to high-income countries, rather than doing more to ensure it goes to the poorest countries and where it can make the most difference. I also argued for a greater role for recipient countries in deciding what counts as aid.
Carsten Staur, Chair of the DAC, has kindly responded, disagreeing with some of my conclusions and setting out his view of the DAC’s role in a changing world.
I’m very grateful to Mr. Staur for his generous and informative response and relieved to hear from him that any effort to weaken graduation rules will at least be limited to transition periods for highly aid-dependent states. I am also hopeful that his strong emphasis on the role of partners and inclusion points to rapid progress towards DAC representation from recipient countries.
His full comment is below.
Comment: Carsten Staur, Chair of the OECD Development Assistance Committee
The 2020s are not the 1990s. Today’s world is very different from the world thirty years ago. I don’t think I need many footnotes to sustain that argument.
Economic and political power structures have changed, as has the role of the OECD DAC and its now 34 members. The DAC-led process of the late 1990s, referenced by Mr. Kenny, which ultimately led to the creation of the Millennium Development Goals, is not replicable today. This day and age, development cooperation is much less donor led, and much more anchored in partner country ownership, leadership and agency. It’s a very different world and it works in quite different ways.
Also in international development cooperation. The dramatic decline of official development assistance (ODA) from DAC members since its 2023 peak, has led to a new international debate on the purpose, role and identity of ODA. It’s a discussion within and among donors, as well as—and not least—within and among partner countries. The Accra reset and the renewed emphasis on national priorities, policies and plans, as well as on domestic resources and long-term strategies, also point to an evolving role of ODA.
Still, ODA remains critical for many of the world’s poorest and most fragile countries. It provides crucial, much needed and irreplaceable external finance as well as technical assistance in support of capacity development, institution building, enabling environments and development of civic space. There is clearly a renewed—and important—emphasis on efforts to mobilize private capital flows. In the end, ODA must be catalytical and driven by partner country priorities.
For the DAC and its members, these developments mean two things. First, that the global discussion on the future of international development cooperation—on the “architecture”, the emerging paradigm shift and the ensuing narratives—clearly must be wide-ranging, open and inclusive: engaging all partners and stakeholders in the broader international development cooperation community. The DAC is part of this community—and an important part, we think—but our role is different from what it was thirty years ago. Don’t expect the DAC to tell others what to do. Expect the DAC to provide evidence, lessons learned, best practices, reflections on what works, where and how—and what does not. And expect the DAC and its members to engage with partners on equal terms and to jointly shepherd the changes needed.
Second, the DAC has initiated a review of its own role and functions in the changing international environment. We look at our data work, moving to complement our retrospective approach, based on past data and statistics, while also delivering forward looking projections. We look at how we may complement and contextualize the focus on ODA within the totality of flows, also at country level, to provide even more relevant information to all stakeholders. And we aim to build our normative and standard-setting work on more open and inclusive involvement of others, as we have done with the new Guidance on Poverty and Inequality, which the OECD will launch in October.
We also look at the graduation criteria, which Mr. Kenny finds will weaken the ODA standard. It will not—and let me explain: At present, countries which reach high-income country (HIC) status (14,375 USD in GNI/cap) will leave the DAC list of ODA recipients. At that point, most of these countries will only receive very limited ODA and graduation will be manageable. Some countries, including small island developing states (SIDS), however, may still depend significantly on ODA, when they approach HIC status. These countries often face serious vulnerabilities, which call for a careful approach to graduation. The DAC has already taken steps to ensure more sustainable graduation processes, and the ongoing discussions are a continuation of this work.
The DAC has no intention of seeking to recreate the role it had in the 1990s. The world has moved on and so has the DAC. Our ambition is to be fit for purpose in a very different, and continuously evolving, global order. We think we’re getting there.
