Official development assistance (ODA) statistical standards ensure the metric is fit for use by policy makers and data users - meaning that the data are relevant, coherent, comparable, accurate and reliable. The standards are developed by the Development Assistance Committee (DAC) Working Party on Development Finance Statistics (WP-STAT) and include measurement methodologies and taxonomies to track ODA as well as broader development finance (e.g. the other official flows). In addition to measuring flows, the DAC establishes policy standards to promote the quality of ODA funding and effectiveness in its use.
In 2023, the DAC agreed on revised methods for measuring donor effort in private sector instruments (PSI) in ODA. The new rules encourage the use of innovative mechanisms to develop markets and mobilise private finance.
They protect the integrity of ODA by making the use of PSI more transparent and improving comparability across donors, monitoring and review mechanisms.
The DAC develops policy standards to improve the quality of ODA and efficiency in its use. These include the Recommendation on Untying ODA and the Recommendation on the Terms and Conditions of Aid.
The OECD monitors the terms and conditions of its member governments’ aid programmes and untying efforts. It also maintains an online portal of ODA contract opportunities for the benefit of the international business community.
WP-STAT, the DAC Working Party on Development Finance Statistics, defines and maintains several taxonomies to track key information on development finance, including the purpose of aid (i.e. the economic or social sector it supports) or the policy objective (e.g. gender equality, climate change adaptation or mitigation).
These taxonomies are often developed with inputs from expert organisations, and they are used also globally beyond DAC reporting purposes, for example in the context of the International Aid Transparency Initiative (IATI), the UN Data Standards for United Nations system-wide reporting of financial data, and Total Official Support for Sustainable Development (TOSSD).
The key features of the grant equivalent system are that ODA credit counted and reported is higher for a grant than for a loan and that, among loans which pass the tests for ODA scoring, more concessional loans will earn greater ODA credit than less concessional loans.
The DAC agreed in 2016 on a set of principles for reflecting donor effort in extending private sector instruments (PSI) in ODA.
PSI were first counted on a net disbursement basis. From ODA in 2023 onwards, donors transition to a grant equivalent measurement that will be fully implemented in 2026.
The OECD’s regular reports on 'untied aid' show that, from 2000 to 2022, of all the ODA covered by the DAC Untying Recommendation, the proportion of untied aid progressively rose from around 60% to 90%.
Most DAC members have now untied almost all of their ODA covered by the Recommendation. DAC members have also pursued their untying efforts beyond what is set in the DAC Recommendation.
