Multilateral Development Finance 2020
As the “Decade of Action” begins, the world needs an effective multilateral development finance system to deliver on the promises of the 2030 Agenda and support the recovery of developing countries from the coronavirus (COVID-19) crisis. Even before the crisis, the system, torn between high expectations and growing criticism of its perceived lack of accountability and effectiveness, was showing signs of stress.
This report looks at recent trends in the multilateral development system in order to provide the clearest possible picture to those deciding on its future. It presents the evolution of multilateral inflows and outflows, and analyses the strategic implications of the contributions by members of the Development Assistance Committee (DAC). The report looks at the activities that multilateral organisations finance, and explores their respective strengths. This year’s edition is supplemented by a series of policy briefs, as well as online statistics on DAC members’ multilateral contributions, available in the Development Co-operation Profiles.
Funding to the multilateral development system
Multilateral organisations rely on the financial contributions of their members, shareholders and other stakeholders to function and carry out their operations. The volume and quality of funding they receive have crucial implications for their capacity to deliver. This chapter presents four key trends in recent funding to the multilateral development system. It also proposes an analytical framework to map the broader implications of the individual funding decisions made by Development Assistance Committee (DAC) members and other multilateral stakeholders. The DAC, whose members remain the largest shareholders and funders of the multilateral development system, retains a central role in multilateral development finance. It needs to make strategic and effective use of its multilateral contributions. The chapter analyses official providers’ multilateral portfolio strategies, and explores how the funding base of multilateral organisations can affect their independence and the sustainability of their programmes.