The growing development potential of other official flows

The development finance landscape has changed dramatically over the past two decades, with the relative importance of official development assistance (ODA) declining in comparison to other external finance available to many developing countries. Since 2008, other official flows (beyond ODA) – provided at close to market terms and/or with a commercial motive – from public bodies in OECD Development Assistance Committee member countries and multilateral institutions have made up, on average, one-third of all official flows to developing countries. This chapter outlines recent trends in these other official flows, their development potential and impact. International financial institutions are the largest providers of non-concessional development finance, representing almost two-thirds of their operations in 2012 more than 95% went to middle-income countries. Officially supported export credits, although commercially motivated, can also help finance large projects in developing countries. These flows deserve greater consideration in developing countries’ search for external financial resources.