Annex A. Technical note
This technical note describes the various parameters and estimates used in this publication. It has six different sections: data sources, scope of actors, data coverage, definition of broad sector categories, main data limitations, and the authors’ estimates and exclusions.
Data sources
Three main data sources were used:
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The (OECD, 2018[1]) Creditor Reporting System (OECD CRS) database, which includes both concessional and non-concessional official flows, i.e. official development assistance (ODA) and other official flows (OOF).
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The (OECD, 2016[2]) Development Assistance Committee survey on Amounts Mobilised from the Private Sector by Official Development Finance Interventions 2012-15.1 Amounts for 2016 were estimated using the annual growth rate of private finance mobilised for the period 2012-15.
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The (OECD, 2017[3]) survey on Private Philanthropy for Development 2013-15.2 2012 data were estimated using 2013 data and 2016 data were estimated using 2015 data as the survey only covered the period 2013-15.
Additional sources were used, including from the International development statistics (IDS) online databases (OECD, 2018[4]) and are specified in the relevant sections of the report (e.g. in the notes of certain graphs, figures and boxes).
Scope of actors
This report aimed to use the maximum amount of information reported to the Development Assistance Committee (DAC) by sector, including all OECD CRS reporters: DAC members, non-DAC reporters and multilateral organisations. We also added the four philanthropic foundations that have reported to the OECD CRS since 2016 and others that responded to the OECD survey on Private Philanthropy for Development 2013-15 (OECD, 2017[3]).
The report includes analyses using the following three donor groupings:
DAC countries: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, United Kingdom, United States.
Non-DAC providers: Algeria, Bulgaria, Croatia, Cyprus3, Estonia, Iraq, Israel4, Kazakhstan, Kuwait, Latvia, Libya, Liechtenstein, Lithuania, Malta, Qatar, Romania, Russian Federation, Chinese Taipei, Thailand, Turkey, United Arab Emirates. Saudi Arabia was not included in this analysis due to the lack of detail reported by country and sector (see more details in the section “Estimates and exclusions”).
Multilateral organisations: Adaptation Fund, African Development Bank, African Development Fund, Arab Bank for Economic Development in Africa, Arab Fund for Economic Social Development, Asian Development Bank Special Funds, Asian Development Bank, Asian Infrastructure Investment Bank, Caribbean Development Bank, Climate Investment Funds, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Union Institutions5, Food and Agriculture Organisation, Gavi (the Vaccine Alliance), Global Environment Facility, Global Fund, Global Green Growth Institute, Green Climate Fund, Inter-American Development Bank, Inter-American Development Bank Invest, Inter-American Development Bank Special Fund, International Atomic Energy Agency, International Bank for Reconstruction and Development, International Development Association, International Finance Corporation, International Fund for Agricultural Development, International Labour Organisation, International Monetary Fund (Concessional Trust Funds), Islamic Development Bank, Joint United Nations Programme on HIV and AIDS, Montreal Protocol, Nordic Development Fund, Organization of Petroleum Exporting Countries Fund for International Development, Organization for Security and Co-operation in Europe, United Nations Children’s Fund, United Nations Development Programme, United Nations Economic Commission for Europe, United Nations Environment Programme, United Nations High Commissioner for Refugees, United Nations Peacebuilding Fund, United Nations Population Fund, United Nations Relief and Works Agency for Palestine Refugees in the Near East, World Food Programme, World Health Organisation, World Tourism Organisation.
Private foundations: Bill & Melinda Gates Foundation, Dutch Postcode Lottery, People’s Postcode Lottery, Swedish Postcode Lottery. Flows from other philanthropic foundations were aggregated under the name “Other foundations”.
Data coverage
This report mainly focuses on the concept of official development finance (ODF), which is a broad measure of developing countries’ official receipts for developmental purposes. Developing countries are those on the DAC List of ODA Recipients (OECD, 2018[5]).
ODF is defined as the sum of:
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Bilateral ODA flows
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Bilateral OOF except for OOF grants and loans for commercial purposes (i.e. grants to developing countries for representational or essentially commercial purposes as well as official loans to private exporters in the donor country and subsidies [grants] to the private sector to soften its credits to developing countries)
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All grants and loans by multilateral development institutions, irrespective of the grant element of the loans.
The dataset excluded core contributions to multilateral organisations in order to avoid double counting with their outflows. Export credits and OOF grants were also excluded to ensure that the dataset only included developmental flows.
When analysing sectoral allocations, “sectoral ODF” was used (and “sectoral ODA” where relevant), which is limited to purpose codes below 50000.6
Commitments were used as the basis for the measurement of flows. Commitments reflect the direct political will of providers; they benefit from very good data coverage for ODA and OOF flows for the period of study; data on private finance mobilised and markers are measured on a commitment basis.
The period of study was mostly 2012-16, with estimates made where necessary (e.g. for amounts mobilised and philanthropic information as indicated above).
The types of finance and types of aid were based on the DAC code lists (OECD, 2018[6]).
In order to deliver key messages and detailed analyses, the following sources for regional and country groupings were used:
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For income groups, the World Bank classification (2017)7
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For groups of countries most in need: for least developed countries, see (OECD, 2018[5]); for landlocked developing countries, the UN list of landlocked countries was used8; for small island developing states, see the OECD DAC list9 and for fragile contexts, see (OECD, 2018[7])
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For regions, see (OECD, 2018[8]), Annex 8.
Definition of broad sector categories
Sectors were compiled with the following methodology:
In this report, the broad sector categories comprise the following subsectors:
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Social sectors cover education, health and population, government and civil society, and other social services, but not water
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Infrastructure includes water, transport and storage, communications, and energy
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Banking and business is a sector on its own
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Production sectors are agriculture, industry, mining and construction, and trade and tourism.
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Multisector comprises environment and multisector. General environmental protection activities are classified under the multisector/cross-cutting sector broad sector category in the DAC classification. It covers activities related to conservation, protection or amelioration of the physical environment without sector allocation. As a result, these activities do not reflect the totality of the donors’ investments targeting the environment but only the part that cannot be allocated to a single sector.
Main data limitations
The OECD CRS database provides a large amount of information regarding sectoral allocations of official development finance flows. However, some of the flows provided in the context of development co-operation cannot be analysed by sector. For example, “general budget support” activities (purpose code 51010) are by nature unearmarked contributions to the government budget and cannot be allocated to a sector. They therefore do not appear in sector-allocable ODF as defined in this report. However, these funds will ultimately target one or more specific sectors in the recipient country. General budget support only represents a small fraction of total ODA.
Another limitation of the data provided in this report relates to the fact that the OECD CRS database includes information recorded as multisector (purpose code 43010). Activities recorded under this purpose code by the provider of development co-operation cannot be disaggregated by sector. To address this issue, the authors included a multisector category in the graphs where relevant to provide the reader with estimates of the activities reflecting this limitation. The multisector category in this report includes both multisector activities and activities recorded under the environment purpose code, which is very much cross-cutting in nature.
Finally, although the reporting by development co-operation providers has improved over the last few years, it is worth noting that support provided through non-governmental organisations is not always clearly allocated to a sector by OECD CRS reporters, and is often reported as “unspecified”. The OECD DAC Secretariat is working with members to improve the allocation by sector of funding channelled through non-governmental organisations. This is done via an annual report on OECD CRS reporting issues.
Estimates and exclusions
The following estimates were made in the context of this publication:
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With regards to non-DAC information: for the sake of comparability and robustness regarding the quality of reporting, the OECD DAC Secretariat has used gross disbursements as a proxy for analysing the sectoral allocations wherever commitments were not available. Saudi Arabia only provided information on its development co-operation programme on an aggregate basis. As this did not allow for a sectoral breakdown, Saudi Arabia was not included in the analysis.
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Multilateral organisations
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Gross disbursements were used as a proxy for commitments for the Arab Bank for Economic Development in Africa, Gavi (the Vaccine Alliance), International Atomic Energy Agency, Montreal Protocol, United Nations Environment Programme, United Nations Population Fund, and World Food Programme due to incomplete reporting on a commitment basis.
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For the African Development Fund and Climate Investment Fund: commitments were used for ODA and gross disbursements for OOF, due to specific reporting issues.
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For the Council of Europe Development Bank: gross disbursements were taken as a proxy for commitments in 2013 to fill the data gap.
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Philanthropic foundations: in order to respect the confidentiality of data by foundations, these were aggregated by year, recipient, income group, channel of delivery, type of finance and broad sector.
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Mobilisation: the OECD DAC survey on amounts mobilised from the private sector by ODF intervention (OECD, 2016[2]) covers the period 2012-15. In order to respect confidentiality agreements with data reporters, information on private finance mobilised was aggregated by year, recipient code, income group, category, type of finance and broad sector. Amounts for 2016 were estimated using the annual growth rate of private finance mobilised for 2012-15.
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Figure 3.17 on shares of financing needs in infrastructure in developing countries by region and Figure 3.18 on annual expenditures and financing gaps in key sectors in developing countries
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Shares of financing needs in infrastructure in developing countries by region (Figure 3.17) were calculated using estimates in (McKinsey, 2017[9]). Estimates might include some countries that are not ODA eligible.
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The annual expenditures and financing gaps in infrastructure in developing countries (Figure 3.18) are based on estimates made by UNCTAD (2014[10]) through a meta-analysis that combines estimates made by several studies available in the literature. As UNCTAD 2014 provides ranges of current investments and financing gaps in each infrastructure sector, Figure 3.18 shows the average of these ranges. Amounts include only capital expenditure and not operating expenditure.
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Figure 3.19. Concessional support for policy and institutional development (2007-16): to create Figure 3.19, only sectors related to policy and institutional development were selected. These include the following OECD Creditor Reporting System purpose codes:
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Governance: public-sector policy and administrative management (15110); public finance management (15111); decentralisation and support to subnational government (15112); anti-corruption organisations and institutions (15113); domestic revenue mobilisation (15114); legal and judicial development (15130); conflict, peace and security (152xx).
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Budget support: general budget support (51010).
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Social infrastructure: social/welfare services (16010); employment policy and administrative management (16020); housing policy and administrative management (16030); statistical capacity building (16062).
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Environment: environmental policy and administrative management (41010).
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Others: education policy and administrative management (11110); health policy and administrative management (12110); population policy and administrative management (13010); water policy and administrative management (14010); transport policy and administrative management (21010); communications policy and administrative management (22010); energy policy (231xx); financial policy and administrative management (24010); monetary institutions (24020); agricultural policy and administrative management (31110); forestry policy and administrative management (31210); fishing policy and administrative management (31310); industrial policy and administrative management (32110); mineral and mining policy and administrative management (32210); construction policy and administrative management (32310); trade policy and administrative management (33110); tourism policy and administrative management (33210).
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Figure 5.3 in Chapter 5 on the use of private-sector instruments in areas with established commercial opportunities: amounts channelled to private-sector companies by bilateral and multilateral development partners in 2016 are actual and estimated figures representing amounts for private-sector operations. Figures for the following are for 2015: African Development Bank, Asian Development Bank, Belgian Investment Company for Developing Countries, CDC Group Plc (formerly the Commonwealth Development Corporation), Compañía Española de Financiación del Desarrollo, European Bank for Reconstruction and Development, Finnfund, Investment Fund for Developing Countries, Islamic Development Bank, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V., Norfund, Oesterreichische Entwicklungsbank AG, Sociedade para o Financiamento do Desenvolvimento, Società Italiana per le Imprese all’Estero, Société Belge d’Investissement International and Swiss Investment Fund for Emerging Markets.
The amounts were calculated using various methods depending on the data available from the OECD Creditor Reporting System and secondary data, in particular:
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Measuring amounts channelled through the private sector (channel parent category 60000) in the OECD Creditor Reporting System was the default method for estimating amounts for private-sector operations.
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Amounts from African Development Bank and Asian Development Bank were calculated using OECD Creditor Reporting System data with the channel parent category 90000 (“Others”) as their private-sector operations were reported through this channel.
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International Finance Corporation amounts were considered to be 100% channelled to the private sector as the institution did not report on channels in 2016 and because it works predominantly with the private sector.
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Amounts from Belgian Investment Company for Developing Countries, CDC Group Plc, Compañía Española de Financiación del Desarrollo, Finnfund, Investment Fund for Developing Countries, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V., Norfund, Oesterreichische Entwicklungsbank AG, Sociedade para o Financiamento do Desenvolvimento, Società Italiana per le Imprese all’Estero, Société Belge d’Investissement International and Swiss Investment Fund for Emerging Markets are estimates calculated by converting figures in euros from (EDFI, 2016[11]) to US dollars. The shares of sectors and instruments provided in the report were then applied to the US dollar amounts.
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Corporación Andina de Fomento figures were estimated using data from the 2016 annual report (CAF, 2017[12]).
References
[12] CAF (2017), "Annual Report 2016", CAF, Caracas, http://scioteca.caf.com/handle/123456789/1079.
[11] EDFI (2016), "Investing to Create Jobs, Boost Growth and Fight Poverty", EDFI, Brussels, https://www.edfi.eu/wp/wp-content/uploads/2017/10/EDFI-Flagship-Report-2016.pdf.
[9] McKinsey (2017), "Bridging Infrastructure Gaps: Has The World Made Progress?", https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/bridging-infrastructure-gaps-has-the-world-made-progress.
[8] OECD (2018), "Converged statistical reporting directives for the Creditor Reporting System and the annual DAC questionnaire - Annexes - modules A, B, and C", OECD, Paris, https://one.oecd.org/document/DCD/DAC/STAT(2018)9/ADD1/FINAL/en/pdf.
[5] OECD (2018), "DAC List of ODA recipients", OECD, Paris, http://www.oecd.org/dac/financing-sustainable-development/development-finance-standards/daclist.htm.
[4] OECD (2018), "International development statistics (database)", OECD, Paris, http://www.oecd.org/dac/financing-sustainable-development/development-finance-data/idsonline.htm.
[6] OECD (2018), "OECD DAC and OECD CRS code lists", OECD, Paris, http://www.oecd.org/dac/financing-sustainable-development/development-finance-standards/dacandcrscodelists.htm.
[7] OECD (2018), "States of Fragility Framework", OECD, Paris, http://www.oecd.org/dac/conflict-fragility-resilience/statesoffragilityframework2018.htm.
[1] OECD (2018), “Creditor Reporting System”, OECD, Paris, https://stats.oecd.org/Index.aspx?DataSetCode=crs1.
[3] OECD (2017), “OECD Survey on Private Philanthropy for Development 2013-15", OECD, Paris, http://www.oecd.org/dac/financing-sustainable-development/development-finance-standards/beyond-oda-foundations.htm.
[2] OECD (2016), "OECD DAC survey on amounts mobilised from the private sector by official development finance interventions 2012-2015", OECD, Paris, http://www.oecd.org/dac/financing-sustainable-development/development-finance-standards/mobilisation.htm.
[14] OECD/The World Bank (2016), Climate and Disaster Resilience Financing in Small Island Developing States, OECD Publishing, Paris, https://doi.org/10.1787/9789264266919-en.
[10] UNCTAD (2014), "World Investment Report 2014: Investing in the SDGs, an Action Plan", United Nations, http://unctad.org/en/PublicationsLibrary/wir2014_en.pdf.
[13] World Bank (s.d.), "World Bank Country and Lending Groups", World Bank, https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups.
Notes
← 1. http://www.oecd.org/dac/financing-sustainable-development/development-finance-standards/mobilisation.htm.
← 2. http://www.oecd.org/dac/financing-sustainable-development/development-finance-standards/beyond-oda-foundations.htm.
← 3. Note by Turkey: the information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Turkey shall preserve its position concerning the “Cyprus issue”.
Note by all the European Union Member States of the OECD and the European Union: The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.
← 4. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
← 5. The EU Institutions are also a DAC member.
← 6. Please see (OECD, 2018[6]) for more information on code lists.
← 7. See (World Bank, s.d.[13])
← 8. http://unohrlls.org/about-lldcs/country-profiles-2/
← 9. See Table 1 in (OECD/The World Bank, 2016[14])