DAC members’ use of the multilateral system has grown continuously over the past decade, reaching record levels in 2022. This growth was largely driven by crisis response, while funding for long-term development goals remained stagnant. In addition, recent crises have also accelerated the rise of earmarked funding at the expense of core contributions, essential for the system to operate sustainably and respond flexibly to global challenges. Although DAC members remain the primary funders, some emerging donors are increasingly asserting their influence through strategic contributions. Their growing involvement brings new resources and opportunities but also affects the donor base and priorities of the multilateral development system.
Multilateral Development Finance 2024
Multilateral Development Finance
Abstract
3.1.1. Total use of the multilateral system reached a new record high in 2022, driven by support to Ukraine
In 2022, DAC members’ total use of the multilateral system reached a new record high, totalling USD 98.5 billion. This comprised USD 50.6 billion in core contributions (multilateral ODA), while earmarked contributions (also known as non-core or multi-bi aid; see Chapter 2), amounted to USD 48 billion. This marked the seventh consecutive annual increase in total use of the multilateral system, underlining its continued relevance in the global development landscape.
This growth masks diverging trends, with core contributions decreasing in 2022 while earmarked contributions continued to rise. After four years of nearly parallel movements in core and earmarked contributions (Figure 3.1, Panel A.), 2022 marked a clear divergence, with core contributions dipping by 6% while earmarked contributions surged by 42% (Figure 3.1, Panel B.). This decline in core contributions, the largest in a decade, followed the record high of USD 53.4 billion achieved in the previous year. Although this drop came after three years of consecutive increases and may be temporary, its occurrence alongside a sharp rise in earmarked contributions is a warning signal that requires close monitoring.
Note: The two graphs present DAC countries’ total use of the multilateral development system, which covers both their core contributions (multilateral ODA) and their earmarked contributions (non-core, or multi-bi aid) to multilateral organisations. Calculations are based on disbursements, in 2022 constant prices.
Source: OECD (2024[1]), OECD Data Explorer, Members’ total use of the multilateral system (database), http://data-explorer.oecd.org/s/s.
The 2022 increase in total use of the multilateral development system can be attributed to a peak in support for Ukraine. Several DAC members provided exceptional levels of support to Ukraine, primarily as budget support through the main international financial institutions (IFIs). This surge in support explains the significant rise in the share of earmarked contributions in total contributions observed in 2022. While earmarked contributions have gradually but steadily increased over the past decade, from 30% in 2010 to 38% in 2021, between 2021 and 2022 this share surged by 11 percentage points, from 38% to 49% (Figure 3.2).
Share of DAC countries’ core and earmarked contributions to multilateral organisations, 2010-22
Note: The figure presents DAC countries’ total use of the multilateral development system, which covers both their core contributions (multilateral ODA) and their earmarked contributions (non-core, or multi-bi aid) to multilateral organisations. Calculations are based on gross disbursements, in 2022 constant prices.
Source: OECD (2024[1]), OECD Data Explorer, Members’ total use of the multilateral system (database), http://data-explorer.oecd.org/s/s.
3.1.2. Earmarked contributions are rising across the multilateral development system
The rise of earmarked contributions has been a persistent issue in parts of the multilateral development system. Previous editions of this report showed that reliance on earmarked contributions varies across multilateral organisations, with the practice of earmarking being particularly prevalent within the UNDS (OECD, 2022[2]) (OECD, 2020[3]). This is partly due to the mandates of key UNDS entities, such as those involved in the delivery of humanitarian aid, which tend to receive a larger proportion of earmarked contributions. However, the growing imbalance between core and earmarked contributions across many UNDS entities cannot always be justified by their specific mandates or operational models, and also partly reflects broader issues related to stakeholders’ incentives in a complex geopolitical context. Efforts to address this imbalance, including through the 2019 UN Funding Compact (United Nations, 2019[4]), have so far been unsuccessful.
Although the UNDS’ dysfunctional funding situation is widely acknowledged, multilateral stakeholders have insufficient incentives to change it. Current trends in funding to the UNDS deviate significantly from the original funding model envisaged in the UN Charter, in which decisions in the General Assembly would determine the priorities and volume of budgets through mandatory assessed contributions by member states (OECD, 2015[5]). Recent research suggests that, in practice, earmarking is commonly used by donors to exert influence on multilateral organisations' priorities, bypassing the complex political negotiations associated with a change in core assessed contributions (Baumann and Haug, 2024[6]). According to the same research, UN managers themselves often prefer to avoid the lengthy and uncertain negotiations associated with assessed contributions, which are also prone to late payments. Additionally, some countries benefit from the status quo by paying less than their fair share of total UN income. However, despite these challenges, the research indicates that reform is possible, as illustrated by the World Health Organization's (WHO) ongoing efforts to rebalance the share of its core and earmarked contributions. This example demonstrates that while challenging, rebalancing funding models to reduce over-reliance on earmarked contributions is feasible with concerted effort and with commitment from all multilateral stakeholders.
In recent years, successive crises have led to a widespread increase in earmarking across the rest of the multilateral development system. This rise in earmarked contributions is no longer a UN-specific issue (Figure 3.3). In fact, recent surges in earmarked contributions cater to various motives and encompass diverse types of support and initiatives across the multilateral development system. For instance, earmarked contributions to the World Bank Group rose rapidly in 2022, largely as a means to channel support to Ukraine. For other MDBs, the largest increase in earmarked contributions occurred in 2020, coinciding with the COVID-19 pandemic. Vertical funds, which have historically been resourced through core contributions, also experienced a surge in non-core earmarked contributions from 2021, largely driven by increased funding earmarked through Gavi, the Vaccine Alliance. Lastly, earmarking to the IMF has surged as donors channel funds through the Poverty Reduction and Growth Trust (PRGT) to support countries impacted by successive crises.
DAC countries’ core and earmarked contributions to multilateral organisations, 2010-22
Note: The graphs present DAC countries’ total use of the multilateral development system, which covers both their core contributions (multilateral ODA) and their earmarked contributions (non-core, or multi-bi aid) to multilateral organisations. Calculations are based on gross disbursements, in 2022 constant prices.
Source: OECD (2024[1]), OECD Data Explorer, Members’ total use of the multilateral system (database), http://data-explorer.oecd.org/s/s.
Addressing the rise of earmarking requires a nuanced approach that recognises both the challenges and the opportunities of this funding modality. Recent research has shown that earmarked contributions are positively related to outcome performance – the extent to which multilateral organisations achieve results; but negatively related to process performance – the extent to which these organisations have rules and procedures in place to plan, manage their operations, liaise with partners and monitor results (Reinsberg and Siauwijaya, 2024[7]). Previous editions of this report have also highlighted both positive and negative effects of this funding modality (OECD, 2022[2]) (OECD, 2020[3]). On one hand, earmarked funding allows multilateral organisations to expand their activities beyond what would be possible with core funding alone. As shown in Section 3.1.3, it has for example been crucial in addressing recent crises and will in all certainty remain an important component of multilateral organisations’ resource mix in the near to medium term. On the other hand, earmarking also presents several challenges. For individual organisations, these include funding vulnerability, since earmarked contributions tend to be less predictable, more volatile and more transaction-heavy than core contributions. It also leads to systemic issues explored in Section 2.2. In some cases, earmarking funds to multilateral agencies’ crisis response plans can even undermine the very flexibility required in crisis and fragile situations, and can hinder the Resident Co-ordinator’s role of driving greater co-ordination and prioritisation of development efforts across humanitarian, development and peace actors (Box 3.1). Ultimately, addressing the entrenchment and widespread use of earmarking across the multilateral development system will require strategies that acknowledge the variety of motives providers and multilateral organisations have for offering or accepting earmarked contributions, while promoting policies and practices that mitigate its disadvantages.
3.1.3. Growing multilateral contributions are driven by crisis response, rather than long-term sustainable development priorities
Contributions to the multilateral development system, excluding funds earmarked for recent crises, have remained relatively flat over the past decade. Between 2012 and 2022, the increase in DAC countries’ multilateral contributions was primarily driven by support earmarked for crisis response (Figure 3.4). In fact, multilateral contributions would have stagnated had it not been for crisis-response funding. Notably, contributions earmarked for humanitarian assistance, the response to the COVID-19 pandemic and Ukraine rose by more than 400% over the ten-year period, compared to a 43% increase in other multilateral contributions. This two-speed trend was also visible between 2021 and 2022, with contributions earmarked for crisis response surging by 49% while other contributions to the multilateral development system declined by 2%.
DAC countries’ core contributions and contributions earmarked for humanitarian, COVID-19, Ukraine and other development purposes, 2012-22
Note: Calculations based on DAC countries’ gross disbursements, in 2022 constant prices. Contributions earmarked for humanitarian aid correspond to those reported under CRS sector codes 720, 730 and 740. Contributions earmarked for COVID-19 correspond to those reported under the purpose code 12264. Contributions earmarked for Ukraine are those reported under the recipient code 85.
Source: OECD (2024[1]), OECD Data Explorer, Members’ total use of the multilateral system (database), http://data-explorer.oecd.org/s/s.
To deliver the global sustainable development agenda effectively, it is essential that multilateral organisations are resourced in a way that enables them to tackle long-term development challenges. While the multilateral development system’s ability to respond swiftly to emergencies and crises is an important feature, integrating a long-term perspective within such interventions is also increasingly important (Box 3.1). In addition, maintaining a focus on other key sustainable development goals requiring a long-term horizon, such as poverty reduction and climate, is equally important. As discussed in Section 3.2, the recent emphasis on crisis response should not distract from the need to invest in the system, ensuring that multilateral organisations can help developing countries achieve these vital long-term objectives.
A key strength of the multilateral development system lies in its ability to respond to fragile, crisis and conflict situations. Even without considering the war in Ukraine and the Israel-Hamas conflict, fragility is increasing globally, with projections indicating that by 2030, 86% of the world’s extreme poor will be living in fragile contexts (OECD, 2022[8]). Most crises are protracted, highlighting the importance of strategic approaches involving development or peace programming, rather than purely short-term humanitarian aid.
Many crises demand a long-term perspective to funding and strategies. Effective crisis responses require organisations operating across the humanitarian, development and peace nexus to look beyond traditional humanitarian sectors and combine their humanitarian funding with longer-term strategies linked to development objectives and broader concerns. Many multilateral organisations have adapted their strategies in recognition of this. The development of an explicit fragility strategy has become the norm among legacy IFIs, including the World Bank Group, the IMF, and the African Development Bank. Many UN agencies have adhered to the DAC Recommendation on the Humanitarian-Development-Peace Nexus (OECD, 2019[9]). The increased number of financing institutions that have started to tailor their work to the needs of fragile contexts, and their expanded role across the humanitarian, development and peace nexus, should be welcomed, supported and reinforced through the ongoing multilateral reform process. Maintaining this focus will be important in the context of the increasing financialisation of the system, which involves increased lending – a modality that can be more difficult to apply in fragile and low-income contexts.
It is essential to ensure that multilateral organisations are resourced in a way that enables them to frame their interventions within an adaptable and longer-term strategy. This involves promoting the use of unearmarked funding mechanisms for humanitarian purposes, such as the UN-led Central Emergency Response Fund, and softly earmarked pooled funds, such as the Joint SDG Fund. Although earmarked contributions are vital for the system’s capacity to pivot from one crisis to another, a heavy reliance on earmarking, including to multilateral agencies’ own crisis response plans, can undermine the very flexibility required in crisis and fragile situations. It can also impact the UN Resident Co-ordinator’s role of driving greater coordination and prioritisation of development efforts across humanitarian, development and peace actors.
Recently, there has also been a notable shift in the type of activities driving donors’ earmarking practices. Historically, humanitarian assistance accounted for a large share of earmarked contributions within the multilateral development system, reflecting the important role of multilateral organisations in delivering humanitarian aid. In recent years, however, earmarked contributions have increasingly been influenced by other crisis response activities. The first major shift occurred with the COVID-19 crisis, in 2020, which required increased funding for vaccine and other health-related activities (Figure 3.5). As a result, contributions earmarked for humanitarian aid declined by 7% between 2019 and 2020 while other earmarked contributions, including COVID-19 control activities, registered a 20% increase. This trend continued in 2021 and most of 2022, driven by support for Ukraine channelled through the main IFIs. For instance, between 2021 and 2022, contributions earmarked for humanitarian purposes rose slightly, by 5%, while other earmarked contributions peaked by 66%, driven by support for Ukraine.
DAC members’ contributions earmarked for humanitarian assistance versus other sectors, 2012-22
Note: Calculations are based on DAC countries’ gross disbursements, in 2022 constant prices. Contributions earmarked for humanitarian aid correspond to those reported under CRS sector codes 720, 730 and 740.
Source: OECD (2024[1]), OECD Data Explorer, Members’ total use of the multilateral system (database), http://data-explorer.oecd.org/s/s.
3.1.4. Donor contributions vary significantly across the multilateral development system, reflecting contrasting resource mobilisation strategies
DAC members’ contributions to the UNDS and vertical funds have increased in recent years, largely driven by crises. The traditional funding model of these institutions, relying largely on contributions from their members, led to a substantial increase in funding to meet the additional needs generated by these crises. For instance, funding to the UNDS more than doubled between 2012 and 2022, from USD 19.0 billion to USD 41.9 billion (Figure 3.6). Contributions to vertical funds, which had remained relatively flat until 2019, surged by 125% and 34% in 2020 and 2021, respectively, mainly due to the COVID-19 pandemic. However, in 2022, funding to vertical funds declined by 29%, returning close to 2020 levels.
By contrast, DAC members’ contributions to MDBs have remained relatively flat over the past decade, contributing to their growing reliance on financial innovation. This is in line with previous analyses showing that donor contributions to the concessional windows of the main MDBs have stagnated or slightly declined in recent replenishments (OECD, 2022[2]). The trend of flat or declining contributions to MDBs stands in stark contrast to their growing outflows over the same period, discussed in greater detail in Chapter 4. This divergence explains the increasing reliance on financial innovation to boost MDBs’ financing capacity, a trend further reinforced by ongoing reforms that demand these institutions to do more with the same or even fewer resources, and which emphasises the optimisation of their balance sheets and the use of innovative financial instruments. Ultimately, these trends result in a financialisation of the system, characterised by a growing dependence on financial instruments, financial markets, financial motives and financial institutions for managing and implementing development co-operation activities.
DAC members’ contributions by multilateral organisation category, 2012-22
Note: Calculations are based on DAC countries’ gross disbursements, in 2022 constant prices. Contributions include both core and earmarked funding.
Source: OECD (2024[1]), OECD Data Explorer, Members’ total use of the multilateral system (database), http://data-explorer.oecd.org/s/s.
While the financialisation of the multilateral development system has been beneficial for increasing MDB financing capacity, it also poses certain challenges. Financial innovation is essential for leveraging additional resources but should not overshadow the critical need for consistent and substantial donor contributions to ensure the sustainability and effectiveness of the multilateral development system. For example, the analysis in Chapter 4 suggests that a prolonged shift towards financial innovation as the primary engine of MDB growth could ultimately affect the concessionality and poverty focus of multilateral development finance.
To achieve MDB reform targets, donors must complement financial innovation with an increase in high-impact contributions. The multiplier effect of MDBs’ leverage capacity means that increasing contributions to the International Development Association (IDA) and other MDB concessional funds can have a significant impact. For instance, the World Bank Group indicates that IDA can provide four dollars for sustainable development for every dollar contributed by donors (World Bank Group, 2024[10]). Similarly, general capital increases for major MDBs can yield substantial long-term benefits that outweigh the costs for donors. For example, the USD 13 billion paid-in capital increase in 2018 enabled the World Bank Group to boost its lending capacity by about USD 41 billion annually through 2030 (Kenny and Morris, 2021[11]). These examples illustrate the high returns and significant leverage that donor contributions can achieve, highlighting their importance. Conversely, the opportunity cost of not investing through these high-impact and scalable modalities (for example prioritising contributions to trust funds) could be substantial, potentially jeopardising the achievement of ambitious reform targets. Recent and ongoing efforts by MDBs to further increase their leverage should thus be viewed as a compelling reason for donors to increase their contributions, allowing for greater return on their investment, rather than as a substitute.
3.1.5. The creation of new funds and windows increases the pace of replenishments and resource competition
Over the past decade, the expansion of the multilateral architecture has been primarily driven by the creation of new concessional windows and funds in response to emerging crises. As shown by a previous edition of this report, which traced the evolution of the multilateral development system since its inception in the 1940s, new multilateral organisations and funding mechanisms have been established over time to address evolving development challenges (OECD, 2020[3]).
Multi-year replenishments have become the preferred model for many of the newly created multilateral entities and funds. Among the first to use this funding model were the concessional windows of the main MDBs, namely the World Bank Group’s IDA, the African Development Fund (AfDF) and the Asian Development Fund (AsDF), all established between the 1960s and 1970s. A key advantage of the replenishment-based funding model lies in its ability to raise core, unearmarked, voluntary, and multi-year contributions from multiple sources. These characteristics have enabled multilateral entities to secure stable, predictable and flexible funding, while diversifying their donor base to include non-official providers.
Owing to its success, the replenishment-based funding model has been widely emulated, especially by the numerous vertical funds created since the 1990s. This new category of issue-specific multilateral entities, often referred to as vertical funds due to their specialised focus, has significantly contributed to the expansion of the multilateral development architecture and the spread of the replenishment-based funding model observed over the past two decades (Figure 3.7). The latest vertical funds, such as the Pandemic Fund and the Loss and Damage Fund currently being operationalised, add to the long list of entities with a replenishment-based funding model.
Pledges to MDBs’ concessional windows and vertical funds’ replenishments, in USD billion
Source: Calculations based on replenishment documents from the following MDBs and vertical funds: International Development Association (IDA), African Development Fund (AfDF), Asian Development Fund (AsDF), International Fund for Agricultural Development (IFAD), Global Environment Facility (GEF), Global Fund, Gavi (the Vaccine Alliance), Global Partnership for Education (GPE) and Green Climate Fund (GCF).
Some more established entities are also adopting or considering a similar replenishment-based funding model to mitigate their funding vulnerabilities. The World Health Organization (WHO), for example, whose funding reform process was examined in the previous edition of this report (OECD, 2022[2]), will launch the first WHO Investment Round in 2025. This new replenishment mechanism aims to enhance its funding model, which was partly blamed for the WHO’s challenges in addressing the COVID-19 pandemic effectively. Among other goals, the WHO Investment Round is expected to improve the share of core contributions within the organisation’s funding mix, which has traditionally relied heavily on non-core earmarked contributions, at the expense of budget predictability and flexibility.
The newer funds compete for donors’ resources with other funding mechanisms with similar replenishment-based funding models. Over time, the attractiveness of the replenishment-based funding model has resulted in its widespread adoption by new multilateral entities, which end up competing for attention and resources from a limited pool of key multilateral donors (Table 3.1). For example, recent research has highlighted the risk of “replenishment traffic jams” due to the large number of such replenishment exercises now occurring each year (Keller, Landers and Martinez, 2024[12]).
Top three donors to the main multilateral funds or windows, 2020-22
Note: Calculations are based on DAC countries’ gross disbursements, in 2022 constant prices. International Development Association (IDA), African Development Fund (AfDF), Asian Development Fund (AsDF), International Fund for Agricultural Development (IFAD), Global Environment Facility (GEF), Global Fund, Gavi (the Vaccine Alliance), and Green Climate Fund (GCF).
Source: OECD (2024[1]), OECD Data Explorer, Members’ total use of the multilateral system (database), http://data-explorer.oecd.org/s/s.
In the long run, the growing competition for a limited pool of donor resources creates clear winners and losers. Over the past decade, this dynamic has particularly affected the concessional windows of legacy MDBs, which have experienced a stagnation in donor contributions, in stark contrast to the rising volume of contributions attracted by the main vertical funds (Figure 3.8). One possible, albeit partial, explanation is that donors are increasingly drawn to vertical funds with specialised mandates, greater visibility among the public and simpler impact metrics. However, this trend also suggests that without a corresponding increase in the overall pool of donor resources, legacy institutions may continue to struggle in their replenishment efforts, potentially undermining their ability to address long-term development challenges effectively. This gap could be filled by an increase in financial support from DAC members, explored in Section 3.2., or from an expansion of the role played by emerging donors, examined in Section 3.3.
Evolution of replenishment pledges, latest versus third-to-last replenishment
Note: The comparison uses the third-to-last replenishment as baseline (not the penultimate) to avoid using the years of the COVID-19 pandemic as baselines. The lines represent the evolution of replenishment pledges (volume) between the latest and the third-to-last replenishment.
Source: Authors’ calculations based on replenishment documents for the following MDBs and vertical funds: International Development Association (IDA), African Development Fund (AfDF), Asian Development Fund (AsDF), Global Environment Facility (GEF), Global Fund, Gavi (the Vaccine Alliance), and Green Climate Fund (GCF).
3.2.1. DAC members use various funding strategies to optimise their impact and influence through multilateral contributions
A few very large multilateral donors stand out among the DAC membership. Three DAC providers accounted for half of all DAC contributions to the multilateral development system in 2022 (Figure 3.9). The United States alone represented 26% of total DAC contributions, followed by Germany (17%) and France (7%). In comparison, the 15 smallest DAC providers to the multilateral development system represented only 5% of the total.
DAC members employ a variety of funding modalities in their multilateral contributions, reflecting their diverse priorities and strategies. The two largest DAC providers of multilateral contributions, the United States and Germany, exhibit a substantial share of earmarked funding, accounting for 69% and 58% of their total multilateral contributions, respectively. In stark contrast, France, the third largest contributor to the multilateral development system in 2022, predominantly uses core contributions, which constitute 91% of its multilateral funding. This variation in DAC members’ approaches is driven by their distinct thematic or geographic priorities, preferences for certain funding modalities, and their desire to exert influence over specific areas of the multilateral agenda. Additionally, the level of their assessed contributions, akin to membership fees based on predefined criteria, also plays a significant role. Historic funding trends further shape these contributions, reflecting DAC members’ longstanding commitments.
DAC members’ total use of the multilateral development system (core and earmarked contributions), 2022
Note: Calculations based on DAC countries’ gross disbursements in current prices.
Source: OECD (2024[1]), OECD Data Explorer, Members’ total use of the multilateral system (database), http://data-explorer.oecd.org/s/s.
A large majority of DAC members have recently increased their multilateral contributions. Between 2021 and 2022, only six DAC members reduced their contributions compared to the 2019-2020 period (Figure 3.10). In contrast, the other 26 members all increased their volume of contributions, though the extent of these increases varied. For example, the United States, Germany and Canada recorded the largest volume increases in multilateral contributions, with all three boosting their contributions through earmarked funding. In terms of percentage change, the United States led with a 48% increase, followed by Canada with 42% and Iceland with 40%. This trend of rising multilateral contributions across the DAC membership underscores a broad commitment to supporting developing countries in navigating successive and overlapping crises. This is particularly noteworthy in the global context of budgetary constraints, including in many DAC countries.
Change in DAC members’ total use of the multilateral development system (core and earmarked contributions), 2019-20 versus 2021-22
Note: Calculations are based on gross disbursements, in 2022 constant prices.
Source: OECD (2024[1]), OECD Data Explorer, Members’ total use of the multilateral system (database), http://data-explorer.oecd.org/s/s.
The volume of DAC countries’ of multilateral contributions does not directly correlate with their gross national income (GNI). Some countries, despite not being among the largest providers to multilateral organisations, contribute more than their fair share relative to their GNI. As highlighted in a previous edition of this report, this is especially the case for Nordic countries, all of which provided more than double their share of the DAC GNI in 2022 (Figure 3.11) (OECD, 2020[3]). Germany, the second largest multilateral contributor, also provides more than twice its corresponding share of ODA. However, this pattern does not hold for all major providers. For instance, the United States, despite being the largest contributor to multilateral organisations among the DAC membership, contributes significantly less than its share of the DAC GNI might suggest.
Contributions to multilateral organisations relative to countries’ share in the overall DAC GNI, 2020-22 average
Note: Calculations are based on gross disbursements, in 2022 constant prices, and include both core and earmarked contributions. The values shown for each DAC country represent the volume of their multilateral contributions relative to a scenario where each country contributes to the multilateral development system in proportion to its share of the DAC GNI (indicated by the dotted line). Those above the line contribute more than their fair share.
Source: OECD (2024[1]), Members’ total use of the multilateral system (database), http://data-explorer.oecd.org/s/s.
The analysis in this section sheds some light on DAC members’ support for the multilateral system, but also shows that no single measure can provide a comprehensive picture of bilateral partners’ use of the system. A more accurate assessment compares providers across multiple metrics and considers the unique characteristics of each provider. By considering a range of factors – including the balance between core versus earmarked funding, the alignment with global priorities, and the historical commitments of each provider – a more nuanced picture of their support to the multilateral development finance emerges. The online profiles of DAC members’ use of the multilateral development system (OECD, 2024[13]), and the dashboard of DAC members’ earmarked contributions to multilateral organisations (OECD, 2024[14]), offer additional insights, including a more detailed depiction of the funding modalities used, the multilateral entities supported, and the thematic and geographic focus of each DAC member’s contributions.
Beyond data analysis, further work illustrates the extensive influence bilateral providers can exert on multilateral activities through their funding practices and engagement in governing boards. This includes efforts to ensure multilateral organisations are given the necessary tools, support and incentives to fulfil their mandates in accordance with development effectiveness principles. For example, recent work has highlighted the critical role bilateral providers can play in enabling multilateral organisations to pivot towards locally-led development (Box 3.2).
Recent work has highlighted the critical role that bilateral providers play in enabling multilateral organisations to pivot towards locally led development (OECD, 2024[15]). There is no consensus amongst bilateral or multilateral providers on what constitutes “local actors” or “locally led development”. However, the growing view is that development is considered to be locally led when all people in a given society – from national governments to communities – are agents in their future and when development co-operation providers allocate funds accordingly (OECD, 2024[15]). Multilateral actors promote locally led development, through a range of mechanisms, systems and partnerships.
Bilateral providers can strengthen multilateral systems and allow for greater inclusivity and flexible procedures that recognise and promote the agency of local actors. Table 3.2 gives examples of how DAC members can support multilateral actors in the move to locally led development by adapting their own behaviour, as members of governing boards and in their funding practices.
Source: OECD (2024[15]), From global to local: Multilateral actors and the pivot to locally led development, https://one.oecd.org/document/DCD(2024)23/en/pdf?sessionId=1723453398474 .
3.2.2. Long-term investment in the multilateral development system will help it deliver expanded mandates
DAC members vary significantly in their use of, and investment in, the multilateral development system. For example, the share of DAC members’ multilateral contributions in their gross ODA, which reflects their use of the multilateral system, ranges from 21% in Japan to 78% in the Slovak Republic (Figure 3.12). Similarly, the share of DAC members’ core contributions in their total use of the multilateral system, a measure of their investment in the system, ranges from 37% in Canada to 98% in Poland.
The overall trend suggests increasing use of, but reduced investment in, the multilateral development system. As the analysis in Section 1.1 shows, the importance of the multilateral development system as a channel for DAC members’ ODA has increased significantly over the past decade. Between 2010 and 2012, DAC members’ total use of the multilateral development system accounted for 38% of their gross ODA. By 2020-2022, this figure had risen to 44%, representing a 6% increase. However, this increased use has been accompanied by a decline in the share of core contributions in DAC members’ funding to multilateral organisations, which dropped by 11% over the same period, from 69% over 2010-2012 to 58% over 2020-2022. This trend, also seen in the analysis in Section 2.1, suggests that while DAC members are making greater use of the multilateral development system, they are shifting towards more earmarked funding. This shift underscores the need for a balanced approach to funding that ensures the sustainability and effectiveness of the multilateral development system in the long term.
Core contributions (% of total use of the multilateral system) and total use of the multilateral system (% of gross ODA), 2010-12 and 2020-22 averages
Note: Calculations are based on DAC countries’ gross disbursements, in 2022 constant prices.
Source: OECD (2024[1]), OECD Data Explorer, Members’ total use of the multilateral system (database), http://data-explorer.oecd.org/s/s.
The erosion of core contributions is visible across the DAC membership. The ratio between core and earmarked contributions is important because it reflects the balance of flexible, predictable funding versus donor-driven, ad hoc funding within the system. Between 2012 and 2022, this ratio decreased substantially – from 2.3 to 1.1 at the DAC level (Figure 3.13, Panel A.). The analysis also reveals that even DAC members known historically for their strong core support, such as France and Portugal, have seen a decline in their ratio of core to earmarked contributions, although they still maintain some of the highest ratios across the membership (Figure 3.13, Panel B.).
Note: Calculations are based on DAC countries’ gross disbursements, in 2022 constant prices.
Source: OECD (2024[1]), OECD Data Explorer, Members’ total use of the multilateral system (database), http://data-explorer.oecd.org/s/s.
Looking forward, maintaining a critical mass of core resources will be essential for multilateral organisations to fulfil their mandates effectively. Core contributions provide the necessary flexibility and stability that these organisations need to respond to evolving global challenges and priorities. Unlike earmarked funds, which are often tied to specific projects or donor preferences, core resources enable multilateral organisations to allocate funding according to strategic priorities set by their governing bodies. This autonomy is crucial for addressing long-term development goals and ensuring that the organisations can maintain essential functions and respond flexibly to emergencies. Moreover, a strong base of core funding helps safeguard the financial health and operational integrity of multilateral institutions, allowing them to undertake strategic planning and monitoring, and maintain a steady course in their mission. As the demand for multilateral support continues to grow, ensuring a robust level of core contributions will be vital for the sustainability and effectiveness of the global development architecture. Recent findings from MOPAN assessments, presented in Box 3.3, support this view.
The ability to mobilise and allocate the right level and type of finance is a key driver of multilateral effectiveness. In a resource-constrained environment, improving the mix of financial resources available to multilateral organisations and developing innovative financing instruments will be increasingly important.
Although multilateral organisations can adapt to a certain extent to the rise of earmarking, it does create challenges. Emerging findings from MOPAN assessments and cross-cutting insights show that UN organisations are adapting to greater earmarking by becoming more agile, entrepreneurial and results focused. Yet earmarked funding raises a range of risks and opportunities for multilateral organisations. For example, for organisations working in crises, more efforts are required by funders and multilateral organisations themselves to ensure that forgotten crises are not defunded when new crises hit, and to ensure that resourcing for areas that will save lives and money, such as prevention work, is maintained.
Organisations also need to reset the relationship with shareholders and funders to move beyond calling for more money and less earmarking towards making a solid case for additional core funds. They should also tackle – together with member states – issues such as competition for funds and fragmentation, and shift towards a system where finance is an enabler of system-wide collaboration around common goals, including solving pressing global problems like climate change.
MOPAN’s recent assessment of the WHO reveals some good practices (MOPAN, 2024[16]). It shows how the WHO has made progress towards greater predictability, flexibility and transparency of funding thanks to a regular financing dialogue with key donors, leading to a landmark agreement in May 2023. Under this agreement, member states will increase the level of assessed contributions from 20% to 50% of the WHO’s base budget between 2024-25 and 2027-28 (or latest 2029-30). Member states will also increase the length of replenishment rounds, allowing for longer-term investment beyond the current two-year rhythm. The WHO’s high level of accountability and transparency in its use of resources, and reporting improvements, have facilitated this process.
Source: MOPAN (2024[16]), Performance at a Glance: World Health Organization (WHO).
Although DAC members continue to play a pivotal role in the multilateral development system, emerging donors are progressively assuming greater prominence. Previous editions of this report have described that many multilateral organisations have begun to diversify their funding base over the past decade to mobilise more resources from middle-income countries and private foundations, and through innovative financing (OECD, 2020[3]) (OECD, 2022[2]). In the current context of stagnating donor resources and substantial financing needs to achieve the ambitions of the 2030 Agenda, broadening the funding base and accessing additional sources of financing remains a priority for most multilateral institutions.
Emerging donors bring diverse perspectives, innovative approaches, and alternative priorities to the table, influencing the allocation of resources and the strategic direction of multilateral initiatives. As their influence grows, the multilateral system faces both opportunities and challenges in accommodating this evolving landscape. This section uses statistical sources drawn from individual multilateral organisations to assess the role of fast-growing non-DAC official providers (hereafter referred to as emerging donors) in the funding of two organisations: 1) the United Nations Development System; and 2) the World Bank Group’s concessional window, IDA. While the focus on these institutions does not cover all developments in the multilateral development system, it does offer insights into a significant portion of the system, accounting for nearly half (48%) of total multilateral development finance extended to ODA-eligible countries in 2022.
3.3.1. A few emerging donors are becoming important players in the multilateral development system
Since the early 2000s, aid from emerging donors has gained significant attention. The term “emerging donors” does not necessarily refer to newly established aid contributors; rather, it encompasses countries like the People’s Republic of China and Saudi Arabia which, despite their long-standing involvement in aid, have garnered attention due to their expanding presence and influence in international relations and development (Kondoh Hisahiro, 2024[17]). Emerging donors in the multilateral system include major economies that have become significant international actors over the past decade such as the BRICS – Brazil, Russia, India, China and South Africa – as well as Argentina, Chile, Indonesia, Israel, Mexico, Saudi Arabia, Türkiye, and the United Arab Emirates (Hughes and Mitchell, 2023[18]).
While DAC members remain the main funders of the multilateral development system, a few emerging donors have increased their contributions notably. In line with the trend observed in previous editions of this report, DAC countries accounted for 95% of donor contributions to the UNDS in 2022, while emerging donors contributed approximately 4% and other official donors made up the remaining 1%. Yet, collectively, emerging donors rank as the eighth largest government donor to the UNDS (Figure 3.14). More importantly, at the level of individual donors, some emerging actors – such as China – are gradually carving out a leadership role in the multilateral development system, highlighting their growing influence and commitment to international development.
Top contributions from government donors to the UNDS, 2022
Note: Emerging donors included here are Argentina, Brazil, Chile, China, India, Indonesia, Israel, Mexico, Russia, Saudi Arabia, South Africa, Turkey and the United Arab Emirates (Hughes and Mitchell, 2023[18]). Calculations include core assessed, core voluntary and non-core (earmarked) contributions provided by government donors but exclude non-core local resources.
Source: Authors’ calculations based on UNSCEB (2024[19]), Financial Statistics, https://unsceb.org/financial-statistics.
Over the past decade, China has made remarkable progress up the rankings of major donor contributors to the UNDS. In 2022, the country moved up 8 places to become the 15th largest donor, a significant leap from 23rd in 2012. Other emerging donors, such as Brazil, India, Mexico, Russia, Saudi Arabia, Turkey and the United Arab Emirates, have also secured spots among the UNDS’s top 30 contributors. Between 2012 and 2022, some of these countries dramatically increased their contributions: China by 576%, the United Arab Emirates by 367%, India by 196%, and Turkey by 109% (Figure 3.15).
Funding to UNDS, 2022, and % change in contributions, 2012 versus 2022
Note: Emerging donors included here are Argentina, Brazil, Chile, China, India, Indonesia, Israel, Mexico, Russia, Saudi Arabia, South Africa, Turkey and the United Arab Emirates (Hughes and Mitchell, 2023[18]). Calculations include core assessed, core voluntary and non-core (earmarked) contributions provided by government donors but exclude non-core local resources.
Source: Authors’ calculations based on UNSCEB (2024[19]), Financial Statistics, https://unsceb.org/financial-statistics.
The trend is similar for the World Bank Group, with some emerging donors significantly increasing their contributions to IDA replenishments. Notably, China and Saudi Arabia have boosted their contributions by 763% and 566% respectively between IDA16 and IDA20 (completed in 2010 and 2022 respectively). Furthermore, China, Saudi Arabia and India were among the top 20 largest contributors to IDA20 (Figure 3.16). India’s rise is particularly remarkable, having rapidly become one of the largest IDA contributors despite not even being a contributor to IDA’s 16th replenishment in 2010.
Contributions to IDA20, 2022, and % change in contributions, IDA16 in 2010 vs IDA20 in 2022
Note: Emerging donors included here are Argentina, Brazil, Chile, China, India, Indonesia, Israel, Mexico, Russia, Saudi Arabia, South Africa, Turkey and the United Arab Emirates (Hughes and Mitchell, 2023[18]). Calculations include all DAC countries, and exclude other non-government donors, such as NGOs, private sector, and other multilateral organisations. New IDA contributors refers to donors that were not yet contributing to IDA in 2010 (IDA16) and for which the percentage change in contributions cannot be calculated.
Source: Authors’ calculations based on World Bank Group (2024[20]), IDA20 Replenishment, https://ida.worldbank.org/en/replenishments/ida20-replenishment.
The decision by emerging donors to invest in the IDA reflects a rational strategy to maximise their influence within the multilateral development system. It is noteworthy that some emerging donors choose to start contributing to the IDA and then rapidly scale up their contributions in subsequent replenishments, rather than increasing their voluntary contributions to the UNDS, an institution where emerging donors are historically seen as having a stronger voice. This can be explained by the fact that investing in the IDA grants these donors a seat at the negotiation table, enabling them to influence the IDA’s strategic direction and content, including its geographical and thematic priorities. Moreover, given the international attention placed on IDA replenishments, this engagement is an effective way for emerging donors to gain visibility and clout. Contributions to the IDA not only enhance emerging donors’ decision-making power within one development finance institutions, but also increase their overall standing and influence within the global development landscape.
While in aggregate terms DAC members remain by far the largest donor contributors to the UNDS and IDA, their influence is declining as a share of all sources of funding. For example, the previous edition of this report revealed that donor contributions represented a decreasing share of the total envelope of the MDBs’ concessional windows (OECD, 2022[2]) due to the MDBs’ capacity to mobilise financing from other sources (market borrowing in IDA’s hybrid model is one example). The 2022 edition of the report also highlighted the growing role of private contributions in the UNDS, although their importance varies significantly across UNDS entities.
3.3.2. Emerging donors’ funding patterns reflect different strategies to leverage multilateral finance to advance their global or regional agendas
The mix of emerging donors’ funding modalities differs significantly from that of DAC members. Core contributions represent about two-thirds of emerging donors’ total contributions to the UNDS, compared to only 17% for DAC member countries (Figure 3.17). The difference becomes even more pronounced when examining core assessed contributions: these constitute a mere 5% of DAC members’ funding to the UNDS, but a substantial 55% for emerging donors.
UNDS funding mix by provider type, 2022
Note: Emerging donors included here are Argentina, Brazil, Chile, China, India, Indonesia, Israel, Mexico, Russia, Saudi Arabia, South Africa, Turkey and the United Arab Emirates (Hughes and Mitchell, 2023[18]). Calculations include all DAC countries, and exclude other non-government donors, such as NGOs, private sector, and other multilateral organisations.
Source: Authors’ calculations based on UNSCEB (2024[19]), Financial Statistics, https://unsceb.org/financial-statistics.
An analysis of individual emerging donors shows that their varying funding patterns reflect their priorities and agendas. The United Arab Emirates and Saudi Arabia stand out among emerging donors for their larger share of earmarked contributions in their overall contributions – 85% and 66% respectively (Figure 3.18). This largely reflects a deliberate strategy to direct funds towards specific regional needs within the Middle East, allowing these countries to address targeted priorities and exert influence within their immediate geopolitical sphere. In contrast, other emerging donors such as China and Brazil display a markedly different pattern, with 85% and 86% of their funding to the UNDS respectively consisting of core contributions, reflecting in part their desire to shape the broader, global development agenda.
Emerging donors’ contributions to the UNDS, 2022
Note: Calculations include all DAC countries, and exclude other non-government donors, such as NGOs, private sector, and other multilateral organisations.
Source: Authors’ calculations based on UNSCEB (2024[19]), Financial Statistics, https://unsceb.org/financial-statistics.
Emerging donors’ funding allocations across UNDS entities differ significantly from those of DAC members. In 2022, the largest single recipient entity of contributions from emerging countries was the UN Secretariat (funded by assessed contributions), which accounted for 25% of their total contributions to the UNDS (Figure 3.19, Panel A). In contrast, DAC members’ funding to the UN Secretariat only accounted for 2% of their total contributions to the UNDS (Figure 3.19, Panel B). This difference largely stems from the fact that emerging donors tend to provide less voluntary and earmarked funding than DAC members. There are also differences in magnitude: although DAC members’ contributions to the UN Secretariat represented only 2% of their total multilateral contributions, this amounted to USD 1,248.8 million. In comparison, emerging donors contributed USD 339.7 million to the UN Secretariat, which, despite representing a quarter of their total multilateral contributions, is significantly lower in absolute terms. This highlights the substantial difference in scale between the contributions of DAC members and emerging donors, even though the latter’s strategic preferences shape distinct funding patterns within the UNDS.
Note: Emerging donors included here are Argentina, Brazil, Chile, China, India, Indonesia, Israel, Mexico, Russia, Saudi Arabia, South Africa, Turkey and the United Arab Emirates (Hughes and Mitchell, 2023[18]). Calculations include all DAC countries, and exclude other non-government donors, such as NGOs, private sector, and other multilateral organisations.
Source: Authors’ calculations based on UNSCEB (2024[19]), Financial Statistics, https://unsceb.org/financial-statistics.
Emerging donors are increasingly leveraging the “power of the purse” to secure influence in the UNDS. Funding serves as a crucial mechanism for countries to assert their influence, and the highest contributions from emerging donors to specific UN entities reveal their strategic priorities. For instance, China’s largest contributions go to the UN Secretariat and the FAO, while its earmarked funding prioritises the UN Department for Economic and Social Affairs (UN DESA). This is consistent with China’s priorities of securing high-level UN senior management positions: China currently leads both UN DESA and the FAO. Similarly, Saudi Arabia focuses its contributions on the WFP and UNRWA and the United Arab Emirates on the WFP and FAO, reflecting their emphasis on humanitarian assistance in the Middle East region.
In addition to the volume of their contributions, the funding practices of these emerging donors are becoming a strategic tool to enhance their influence. These funding allocations not only reflect the priorities of emerging donors but also their capacity to shape the agenda and operations of the UNDS, thereby bolstering their global standing and influence. For instance, by directing significant resources to specific UN entities, emerging donors can prioritise issues aligned with their national interests and policy goals, ensuring these are addressed within the traditional multilateral framework. Funding practices are also increasingly wielded as an instrument of soft power and diplomatic leverage. This was notably exemplified in 2020 when China publicly criticised the United States for its funding arrears with the UN, highlighting the geopolitical dimensions that multilateral funding practices can assume (Fung and Lam, 2022[21]).
Emerging donors’ growing engagement in multilateral development finance provides an opportunity for strengthened outreach and knowledge exchange with the OECD DAC. Stronger outreach and knowledge exchange could enable emerging donors and OECD DAC members to share their experiences with multilateral development co-operation, and discuss policies as well as the good practices and challenges of being effective partners with multilateral organisations, with a view to collectively ensuring that multilateral organisations are well-equipped to address future challenges.
3.3.3. Newer, Southern-led multilateral organisations offer emerging donors an alternative way to influence the direction of multilateral development finance
Emerging actors remain minor shareholders in legacy MDBs despite large differences across institutions. Contributions from emerging countries represent about 33% of total contributions to the Inter-American Development Bank (IADB), 24% to the International Bank for Reconstruction and Development (IBRD), 15% to the Asian Development Bank (ADB), 6% to the European Bank for Reconstruction and Development (EBRD) and 3% to the African Development Bank (AfDB) (Figure 3.20). This contrasts with DAC members, which are collectively majority shareholders in four out of the five main MDBs, namely the EBRD (89%), IBRD (59%), ADB (50%) and IADB (50%).
Emerging donors’ shares of capital in the main MDBs, 2022
Note: AfDB: African Development Bank; ADB: Asian Development Bank; EBRD: European Bank for Reconstruction and Development; IADB: Inter-American Development Bank; IBRD: International Bank for Reconstruction and Development.
Source: Authors’ calculations based on these organisations’ official documents.
Over the past decade, emerging donorship has also materialised through the creation of two new MDBs: the New Development Bank (NDB) and the Asian Infrastructure Investment Bank (AIIB). Following a proposal by India, the BRICS countries – Brazil, Russia, India, China, and South Africa – established the NDB in 2014. That same year, China and 20 other Asian nations signed an agreement to create the AIIB. The goals of both the NDB and the AIIB are to mobilise resources to address the substantial infrastructure investment gap and promote sustainable development in developing countries (OECD, 2020[3]).
The establishment of these two new MDBs was widely considered as a significant challenge to what is perceived as a Western-dominated system. Developing countries had long sought greater representation in multilateral institutions, but progress on voice reform had been considered slow and limited, and legacy institutions were often seen as too bureaucratic and inefficient (Kellerman, 2018[22]). The new MDBs were created with the stated aim to enhance representation for developing countries in the multilateral development system, prioritise infrastructure development, eliminate political considerations from lending decisions, and increase efficiency (Wang, 2019[23]). Unlike in the legacy MDBs, emerging donors hold a majority of the AIIB’s and NDB’s capital (Figure 3.21).
Emerging donors’ shares in new development banks, 2021
Note: AIIB: Asian Infrastructure Investment Bank; NDB: New Development Bank.
Source: Authors’ calculations based on these organisations’ official documents.
The scope of recent calls for MDB reform can partly apply to Southern-led MDBs. Currently, the discourse on MDB reform has predominantly centred on legacy institutions, especially the World Bank Group. While newer institutions, given their relatively recent establishment, are yet to reach full operational maturity – with the AIIB for example projecting maturity around 2030 – achieving the ambitious goals of the MDB reform agenda will require concerted efforts by all components of the system, including Southern-led MDBs. Excluding them from the reform process risks undermining their potential contribution to this new agenda. Research is highlighting certain areas where Southern MDBs could improve their effectiveness, such as increasing their country presence to engage more robustly with the overall external development finance ecosystem, including private sector actors (Bhattacharya et al., forthcoming[24]).
Southern-led MDBs are already adapting their operational models to align them better with the evolving needs and demands of their client countries. Recent evolutions in these newer MDBs point to a notable convergence with the legacy MDB system in some respects. For instance, while the AIIB does not provide concessional finance, it has formally established in 2022 a Special Funds Window for Less Developed Members (SFW), which provides an interest rate buy down – a discount on the regular interest – of its USD-denominated loans. The AIIB has also started to decentralise its operations by setting up an operational hub in Abu Dhabi, moving away from a headquarters-only model. In response to the economic and social challenges posed by the COVID-19 pandemic, Southern-led MDBs are also expanding their financial toolkit to include budget support and social investments, which were previously outside their infrastructure-centric focus. Interestingly, while newer MDBs are starting to embrace concessional finance, legacy MDBs, despite having well-established concessional frameworks, have increasingly focused their interventions on non-concessional finance in recent years. This divergence raises critical questions about the role of legacy MDBs, in which DAC members hold majority stakes, and whether they might be neglecting certain areas, thus leaving newer MDBs to fill these gaps. Ultimately, such dynamics have significant implications for their comparative advantages and the division of labour within the global development finance landscape.
3.4.1. Key findings
The chapter has highlighted significant trends and shifts in funding to the multilateral development system (multilateral inflows):
The continued growth in OECD DAC members’ use of the multilateral system, reaching record levels in 2022, underscores the system's increasing relevance. However, this growth is predominantly driven by crisis response funding, with contributions to other long-term development goals remaining relatively stagnant. Despite recent reforms to expand multilateral mandates, these broader objectives are not yet fully reflected in current funding trends. This points to the need for a more integrated approach that balances immediate crisis response with sustained investments in long-term development priorities. Additionally, MDBs have not benefitted from the growth in multilateral contributions and have had to rely instead on financial innovation to increase their financing capacity. Meeting the MDB reform targets presented in Chapter 1 requires complementing financial innovation with increased donor contributions through MDBs’ concessional windows or capital increases, which can capitalise on these institutions’ multiplier effect.
The growing use of the multilateral development system contrasts sharply with declining investment in its core functions. While DAC members are increasingly channelling funds through multilateral organisations, much of this funding is earmarked for specific crises or projects. Although earmarked contributions can address specific needs, they cannot substitute for core contributions, which are essential for the flexibility and stability of multilateral organisations. Ultimately, a continued shift towards earmarked funding could undermine their capacity to pursue their core mandates effectively. Maintaining a critical mass of core contributions thus remains essential for ensuring the system’s ability to respond sustainably to global development challenges.
Emerging donors are playing an increasingly influential role, using their financial contributions strategically to shape the agenda and operations of multilateral institutions. Countries like China and Saudi Arabia have significantly increased their contributions, particularly to organisations like the UNDS and the World Bank Group’s IDA, enhancing their global influence. This diversification of funding sources brings new resources and opportunities, potentially enriching the multilateral development system with fresh perspectives and additional financial support, and easing pressures generated by the competition for scarce resources. The growing engagement of emerging donors in multilateral development finance could provide the basis for closer partnerships with the OECD DAC to discuss how to collectively ensure that multilateral organisations are well-equipped to address future challenges.
3.4.2. Key recommendations
Maximise contributions to high-impact funding mechanisms: Capitalise on the multiplier effect of multilateral funding mechanisms to achieve initial reform targets by ensuring successful replenishments of MDB concessional windows and global funds. Explore the possibility of additional capital contributions (e.g. to general capital increases or hybrid capital instruments). Ensure that a substantial portion of multilateral development finance remains highly concessional and affordable for the poorest and most vulnerable countries.
Ensure adequate funding for core strategic functions: Invest in the core functions of multilateral organisations to maintain their ability to perform their mandates. Adjust the formula and level of UN assessed contributions to reflect member countries’ actual economic weight. This can ensure increased, fair share contributions, and help rebalance core and earmarked contributions to the UNDS. Recognising the specificities of each multilateral organisation, bring discussions on funding quality to their governing bodies to complement general UN Funding Compact commitments (following the model of the WHO reform or structured financing dialogues).
Prioritise flexible funding: In accordance with UN Funding Compact commitments, prioritise multi-year and flexible funding modalities, such as contributions to multi-donor and inter-agency pooled funds, as these foster co-ordination, reduce fragmentation and enable organisations to adapt to countries’ needs.
Engage with emerging donors on multilateral development finance: Acknowledge the growing role of some non-DAC donors in the multilateral system. Use existing OECD DAC outreach mechanisms, such as the policy dialogues with Arab and Latin American and Caribbean countries, to discuss insights from OECD analyses on multilateral development finance and effective multilateral development co-operation and to develop common ground for good practices in these areas.
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