OECD Development Co-operation Working Papers

OECD Development Co-operation Working Papers cover work on understanding aid flows, strengthening aid delivery and improving development policy. Topics include, among others, aid statistics and architecture, aid effectiveness, capacity development, development co-operation systems and management, evaluation of development programmes, as well as the relationship between development and trade, conflict and fragility, environment, gender equality, governance and poverty reduction.


Development Co-operation for Private Sector Development

Analytical Framework and Measuring Official Development Finance

This Working Paper provides an analytical framework of development co-operation for private sector development (PSD) and a measurement to capture relevant Official Development Finance (ODF). PSD is defined as development co-operation which addresses relevant policies and institutions, market functioning and enterprise resources. It aims to improve the investment climate and productive capacity of the local private sector—particularly of small- and medium-sized enterprises—including through developing physical infrastructure.

The analysis shows that development partners disbursed roughly a third of total ODF each on helping improve the investment climate, productive capacity, and physical infrastructure. For the investment climate, large amounts were allocated to macro-economic stability and public governance. To boost productive capacity, support to financial services – particularly to commercial banks that on-lend to SMEs and investments in equity funds – was particularly high. Finally, for physical infrastructure, about half the ODF went to transport, particularly roads, and a third to energy.


Keywords: Private Sector Development, Investment Climate, Development Finance, Productive Capacity, SDGs
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