The European Commission Inequality Marker: Reducing inequality for effective development co operation

Abstract

The European Commission Inequality Marker (I-Marker) addresses challenges in reducing inequalities in development co-operation. The I-Marker guides the Directorate-General for International Partnerships (DG INTPA) programme design and enhances the tracking and benchmarking of inequalities across sectors. Lessons learnt stress continued support and integration with other policy tools for effective inequality reduction. The application of I-Marker extends to all new DG INTPA interventions, including the Equality Flagships’ initiatives, in countries such as Bangladesh, Kenya, South Africa, Burkina Faso, Paraguay, and Latin America and the Caribbean.

This content is part of TIPs In Practice series on poverty and inequalities developed in collaboration with the Development Co-operation Report 2024: Tackling poverty and inequalities through the green transition.

Challenge

Assessing the extent to which the European Commission’s Directorate-General for International Partnerships’ (DG INTPA) development co-operation efforts contribute to the goal of reducing inequalities is a challenging task. This is particularly due to the absence of tools for better understanding how development interventions or allocations of official development assistance (ODA) address the needs of the bottom (poorest) 40% of the population in partner countries.

After three years of dedicated collaboration with experts from academia and research, and with the support of the French Development Agency (Agence Française de Développément, AFD) through the EU-AFD Research Facility on Inequalities, DG INTPA’s Commissioner Urpilainen launched the Inequality Marker (I-Marker) in June 2023.

Approach

The I-Marker is a fundamental tool for DG INTPA to achieve its overarching objective of “build[ing] a more sustainable and inclusive world for all” for two reasons. First, it improves the design of interventions to reinforce their inequality-reducing effects. Second, it creates a sound reporting and benchmarking system of the contribution of all relevant interventions (in terms of ODA allocation) to reducing inequalities, capturing appropriately the multidimensionality of inequality. The I-Marker helps DG INTPA to better understand, track and benchmark the impact of its work on inequalities across all sectors by assessing whether, and to what extent, inequality reduction is an objective of a donor’s intervention and, therefore, how likely it is to have an impact on reducing inequalities. This is customarily the case of those interventions designed to benefit, to a larger extent, the bottom (poorest) 40% or other socio-economically disadvantaged individuals, households or groups.

For this purpose, a set of criteria has been developed to establish whether inequality reduction is the principal objective (I-2), a significant objective (I-1) or not targeted (I-0).

Results

• Prioritising inequality reduction. The I-Marker reinforces the design of interventions, resulting in projects with inequality reduction as their main objective. It effectively targets the most vulnerable groups by identifying and including them throughout the programming and project cycle.

• Mainstreaming inequality reduction. The I-Marker is applied across all sectors and to all Global Gateway priorities, from human development to digitalisation, climate change, energy, infrastructure and more. The I-Marker has contributed to a wide range of Equality Flagships, from digitalisation in Kenya, to decent work in Bangladesh - with transformative potential to reduce inequalities.

• An evidence-based initiative with broad support. The I-Marker is the result of an extended collaboration with academia and research. Following its endorsement within the European Commission and support from leadership in 2023, the I-Marker is now guiding DG INTPA programme design and results management. The first results will be available in the third quarter of 2024.

• Leverage for policy dialogue. As an advocacy tool, the I-Marker has been crucial for policy dialogue and communication with partner organisations, including EU institutions, member states, international organisations, non-governmental organisations and academia.

• The implementation of the I-Marker has stimulated the expansion and strengthening of capacity-building initiatives. As a consequence of these efforts, an Inequality Week was convened in March 2023 to train EU staff on integrating the tool across all development interventions. Additionally, a dedicated e-learning module on the I-Marker was created and is now accessible to the public at large.

Lessons learnt

The European Commission is conducting the 2021-2024 Mid-Term Review of the Neighbourhood, Development and International Cooperation Instrument, including through an inequality perspective. The following preliminary lessons can already be drawn:

• Continue providing internal support to ensure systematic application of the I-Marker. This is necessary in view of its new and innovative nature. Develop complementary guidelines, trainings and seminars, accompanied by additional tools, such as the income and consumption led Distributional Impact Assessment (DIA+).

• Apply the I-Marker broadly. Council Conclusions (21/11) state “the Council recommends the broadest application of the Inequality Marker, including in Team Europe Initiatives and with regard to the Global Gateway”. Internal guidelines should be finalised by the end of 2024 to better mainstream inequality and apply the I-Marker to the European Fund for Sustainable Development Plus (EFSD+).

• Use the I-Marker to complement the application of the human rights-based approach to international partnerships and the Gender Action Plan III. The I-Marker should be used alongside other policy tools such as the OECD-DAC gender equality policy marker and the disability marker to effectively address both horizontal and vertical inequalities.

• Promote dialogue with EU member states and key partners to ensure the roll out of the I-Marker. The Global Team Approach to Inequality Reduction between the European Commission and EU member states represents an opportunity to begin building a common vision on inequalities.

Further information

Council of the European Union (2023), A Social, Green and Digital Transition, Council conclusions, November, https://data.consilium.europa.eu/doc/document/ST-15732-2023-INIT/en/pdf.

Council of the European Union (2019), Addressing inequalities in partner countries, Council conclusions, November, https://data.consilium.europa.eu/doc/document/ST-14456-2019-INIT/en/pdf.

European Commission (2022), Addressing income inequalities through development cooperation – A quick guide, Directorate-General for International Partnerships, Volume 1, Volume 2, Volume 3, https://data.europa.eu/doi/10.2841/209509

Resources on the I-Marker: Guidelines, one-pager, video and e-learning module.

Capacity4Dev Groups: Fighting Inequalities through development cooperation and stronger partnerships.

Equality flagships in Bangladesh, Burkina Faso, Kenya, Paraguay,South Africa, and in Latin America and the Caribbean.

OECD resources

OECD (2024), Development Co-operation Report 2024: Tackling poverty and inequalities through the green transition, OECD Publishing, Paris, https://doi.org/10.1787/357b63f7-en.

OECD (2018), OECD Development Co-operation Peer Reviews: European Union 2018, OECD Development Co-operation Peer Reviews, OECD Publishing, Paris, https://doi.org/10.1787/9789264309494-en.

OECD (2001), Poverty Reduction, The DAC Guidelines, OECD Publishing, Paris, https://doi.org/10.1787/9789264194779-en.

To learn more about the European Union’s development co-operation:

OECD, “European Union institutions”, in Development Co-operation Profiles, OECD Publishing, Paris, https://doi.org/10.1787/2dcf1367-en.

See more In Practice examples from the European Union here: https://www.oecd.org/development-cooperation-learning?tagkey+partner=european+union#search.