Brussels Declaration on Measuring Official Development Assistance
Updated: Oct 23
About this paper
Issued in Brussels in October 2023, this declaration calls for reform of the rules and governance used to measure Official Development Assistance. It sets out the signatories' concerns about concessionality, private sector instruments, discount rates and donor-only decision-making.
Editorial note: The original text follows in its historical context. References to rules, proposals, figures and future events reflect the source document, rather than an update to the present day.
Brussels Declaration on Measuring Official Development Assistance
In 1970, advanced countries committed, through a United Nations resolution, to provide at least 0.7% of their national incomes in net official development assistance (ODA). For decades, most donors have failed to meet this target.
Donors negotiate ODA measurement rules in the Development Assistance Committee of the OECD, without recipients or other stakeholders having an effective say.
Our group is concerned that recent rule changes by the DAC represent a radical departure from the original concept of ODA, which inflates the amount of ODA they can report beyond their fiscal effort. In doing this, the DAC has abandoned ODA’s fundamental principle of recording concessional flows, i.e. transactions that give something of value away, and which therefore require some real budgetary effort.
Under the name of “private sector instruments” (PSIs), the DAC has introduced the following items into ODA that should not be counted:
• Lending to private actors at market terms without any budgetary subsidy
• Investing in commercially viable development projects that make substantial profits
• Selling guarantees to banks on their loans to developing countries.
For these transactions, the DAC has devised calculation methods to score “ODA grant equivalents” even when it is clear that no fiscal effort is involved. These calculations use arbitrary discount rates that are far too high to reflect real donor effort.
In the course of this process, the DAC has broken several important promises. It promised to maintain the definition of ODA, but instead removed ODA’s key concessionality requirement in respect of PSIs. It also promised that, since it now scores ODA for loan risk on every loan, eventual loan forgiveness would not count as a new aid effort – but it broke this promise, and even allows donors to score more ODA for forgiveness than the amount forgiven.
Some donor countries now openly admit to scoring far more ODA than their real fiscal effort. Others are exploiting the inflation of ODA numbers to cut their real aid programmes.
The DAC’s radical changes to ODA rules will produce meaningless, useless totals that serve only to mislead. They will undermine the credibility of aid volume commitments and of aid activities more broadly.
The basic problem is the “donor only” model of politically-negotiated ODA rules. Restoring sound aid statistics will require fundamental review and reform of the rule-making process to avoid political interference as far as possible. This can only be achieved through a new institutional set-up, no longer controlled by any donor-only body.
This Declaration was issued at Brussels in October 2023 by a group of veteran civil servants with hundreds of years of combined experience in measuring aid.
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