Executive summary
How can a highly functioning development co-operation system better tackle complex challenges, which are often more political than technical? This question underpinned the OECD Development Assistance Committee (DAC) peer review of the Netherlands, conducted by Spain and the United Kingdom, with Qatar as observer and the support of the OECD Secretariat. The Netherlands demonstrates a clear commitment to take on these challenges, learn from its performance and enhance its ways of working. The peer review provides an assessment of where the Netherlands stands, its achievements and remaining challenges and how it can further improve, notably by pursuing ongoing reform efforts.
Continuity, a focus on strengths and a growing budget provide a good basis to move forward. The Ministry of Foreign Affairs (MFA) has updated its development co-operation policy framework and works closely with a network of highly engaged institutions and stakeholders. The new trade and co-operation policy “Do what we do best” reaffirms its thematic and geographic focus. This provides valuable continuity, essential to engaging in challenging contexts over the long term. Valued as a strong multilateral partner, the Netherlands champions priority issues at the international level. Operationalising its new feminist foreign policy provides an opportunity to expand its leadership on gender equality. Reversing the trend of decreasing official development assistance (ODA) was an important achievement. However, a lasting solution to mitigate the effects of fluctuating in-donor refugee costs is urgently needed, given the impact on resources available, predictability and effectiveness of development programming.
The Netherlands needs to continue ambitious reforms to further equip its development co-operation system for complex challenges. To reduce dispersion, the foreign ministry successfully concentrated funding on fewer programmes. However, fragmentation persists, for instance in the breadth of engagement in each country and the range of private sector instruments. The thematic budget and way of working enable a focus on achieving thematic results and linkages with Dutch expertise but can make it more difficult to ensure interventions are adapted to context, locally owned and led. Greater clarity on when central programme management is necessary and greater flexibility to respond to country-specific contexts in the design of those programmes would help balance benefits and trade-offs.
Investments in learning and expertise have strengthened the focus on sustainable impact. The Dutch development co-operation system has a strong learning culture, but its results management mostly targets quantitative objectives. Dedicated investments in continuous learning and long-term approaches are shifting the focus to transformative change and sustainable impact. Ongoing reforms are strengthening human resource capacity. Local staff are highly valued but limited in their opportunities. Continued attention to staff capacity remains necessary, both across the system to benefit from additional learning opportunities, and in embassies to support efforts for locally led development.
The Netherlands is committed to working in fragile settings, and risk management needs to further evolve to enable strong engagement in challenging contexts. The Dutch government stresses that taking risks is essential to achieving impact but it comes under pressure when incidents occur. Continued dialogue with parliament and the public is important to create a shared understanding of the rationale for and inherent costs of taking and mitigating risks. Greater attention to risks other than fiduciary risks, along with additional guidance for staff could further enhance the MFA's risk management systems.
Clear working methods have enhanced Dutch engagement in fragile countries. The Netherlands’ long-term and flexible financing and long-term perspective is consistent across the humanitarian, development and peace nexus. Through its support for civic space and human rights, it has a commendable focus on peace. More cross-sectoral analysis could enable more comprehensive responses to multi-dimensional challenges, involving all thematic departments. Similarly, the Netherlands could promote a stronger integration of approaches to forced displacement into thematic programmes alongside its large-scale innovative programme with multilateral agencies.
The Netherlands stays engaged in difficult contexts but could increase focus on the political dimension of the humanitarian, development and peace nexus. As part of its good practice, the Netherlands has an increasingly structured approach to calibrating its continued engagement in complex contexts and to assessing and considering the risks of withdrawing. To support stability and peace objectives in partner countries, the Netherlands could consider the interaction between its development co-operation and political engagement. Recognised as a constructive partner willing to engage in critical dialogue, the Netherlands could do more to integrate political dialogue with governments into its efforts.
The strong Dutch commitment to locally led development is increasingly translated into practice. Actions to ensure local actors own and lead partnerships are anchored in key strategic documents. The MFA and its partners invest considerably in learning on locally led development, enabling the Netherlands to identify how it can make greater progress in all its partnerships. To further integrate a locally led approach, the Netherlands could internally clarify objectives for operationalisation, further expand consultation of local stakeholders and consider the delegation of larger resources to embassies. It will also be important to ensure that efforts for scaling up enable and safeguard opportunities for local stakeholders.
The Netherlands is leading in advancing locally led partnerships with civil society organisations (CSOs). The MFA has taken action to shift the power to Southern civil society partners in programmes managed by international and Dutch CSOs. Local CSOs appreciate flexible funding and support for capacity strengthening. There is room though for more direct funding to local CSOs and complementary focus on capacity building for larger grant management.
Clarity is needed on engagement with partner governments. They are often central actors in achieving sustainable impact on Dutch priorities, but engagement with them is uneven. The system would benefit from clearer steering on the opportunities for working with partner governments, within the parameters set down by parliament, from dialogue and consultation to full partnership, depending on the context.
To tackle significant spillovers from trade and consumption, the Dutch government could benefit from further enhancing its robust policy coherence mechanisms. The wealth generated in the Dutch economy should not come at the expense of developing countries. Prioritising this problem in the policy coherence action plan is an important first step, as is greening of export support. The Netherlands could build on its good experiences with multi-stakeholder dialogues to advance policy coherence priorities. Strengthening processes to ensure that line ministries demonstrate how their policies contribute to the Sustainable Development Goals (i.e. the SDG test) is another important objective. To bolster public support for this agenda, greater investments and better co-ordination on global citizenship education are needed.
The comprehensive trade, aid and climate finance toolbox could achieve greater impact. A revised approach to aid and trade, in particular with 14 “combination” countries, could deepen institutional collaboration and align all instruments towards systemic change rather than individual interventions. The focus on Dutch (private sector) expertise, possible ambiguity on tied ODA and limited risk taking in financing mean that opportunities for maximum development impact may be missed. The Netherlands has a strong track record as an advocate for climate and development-friendly trade agendas. Ambitious national due diligence legislation and greater progress on the green transition would further strengthen its credibility.
Valuable practices from the Netherlands are described on the learning platform, Development Co-operation TIPs ∙ Tools Insights Practices (https://www.oecd.org/development-cooperation-learning).
1. To ensure the continuity and predictability of its engagement, the Netherlands should continue efforts to mitigate the effects of fluctuating in-donor refugee costs on other ODA expenditure and maintain the positive trajectory towards 0.7% of GNI.
2. To expand its international leadership on gender equality and women’s empowerment, the Netherlands should continue to operationalise the Feminist Foreign Policy across government and work closely with partners internationally.
3. Building on the “less, better, more flexible” initiative to focus on sustainable impact, the Netherlands should
a. preserve progress made in streamlining the portfolio and ensure allocations remain focused on thematic and geographic priorities
b. continue initiatives to strengthen its human resource capacity
c. address fragmentation within portfolios and across funding instruments, where the co-operation system cannot mobilise capacity and resources at scale.
4. While preserving the strengths of its thematic approach, the Netherlands should ensure it is responsive to local contexts by
5. The Netherlands should further enhance its risk management approach by guiding staff on balancing different risks and objectives, notably through developing a risk appetite statement, focusing on risk-sharing over risk-transfer with implementing partners, and proactively engaging with all accountability stakeholders.
6. To strengthen the impact of its integrated approach in fragile contexts, the Netherlands should use country teams to conduct more regular context analysis, articulate strategic objectives for prevention and peace, and engage in tailored political dialogue and diplomatic efforts.
7. To further operationalise a locally led development approach, the Netherlands should
a. define objectives and success criteria for locally led development across the full range of its thematic portfolios and partnerships, not limited to civil society
b. strengthen consultation of partner country stakeholders in priority-setting and annual planning cycles
c. give emphasis to local stakeholders in its efforts to scale up impact.
8. The Netherlands should ensure it systematically considers options for engaging with national as well as sub-national governments in partner countries as key stakeholders, and, tailored to each context, reflect this in its dialogue and programmes.
9. To strengthen the engagement of all stakeholders on policy coherence challenges, the Dutch government should ensure line ministries systematically assess and address global and transboundary effects of their policies, expand the use of multi-stakeholder approaches to advance policy coherence priorities, and invest further in global citizenship education.
10. The Netherlands should ensure that maximum development impact rather than commercial objectives remains the key factor in decision making in its private sector engagement and enhance the cohesiveness of private sector development efforts for systemic change.