Bilateral providers of development co-operation rely on multilateral development actors that are uniquely placed to address global challenges, respond to crises and complement bilateral efforts. After decades of growth, funding to the multilateral system fell sharply in 2024 and is expected to decline further through 2027. For multilateral organisations and the multilateral system as a whole to be more effective, co‑operation across governing boards, between members and with multilateral partners is essential.
Partnering with the multilateral system
Abstract
Multilateral official development assistance (ODA) fulfills the following three criteria:
1. The recipient conducts all or part of its activities in development and for developing countries.
2. The recipient is either a) an international agency, institution or organisation whose members are governments represented at the highest-level of decision making, or b) a fund managed autonomously by a multilateral agency as defined in a).
3. Funds are pooled so that they lose their identity and become an integral part of the recipient institution’s financial assets (i.e. a core contribution).
ODA providers can also provide earmarked contributions to specific projects, programmes and funds managed by multilateral organisations, or payments for them to implement the providers’ own projects and programmes. These constitute bilateral ODA channeled through the multilateral system.
Bilateral development co-operation partners rely on multilateral organisations that are uniquely placed to address global challenges, respond to crises and complement bilateral efforts. In 2024, 41% of Development Assistance Committee (DAC) Members’ ODA was provided multilaterally. While ODA to multilateral organisations reached a peak of USD 107.6 billion in 2023, it fell to USD 91.3 billion in 2024, almost half of total ODA. Preserving the multilateral system’s delivery capacity requires member states to protect financial foundations and manage funding cuts strategically.
For multilateral organisations and the multilateral system as a whole to be more effective, co-operation across governing boards, between member states and with multilateral partners is essential. Members and funders should respect multilateral mandates, promote agreed system-wide reforms, and support joint approaches.
Few formal standards exist on what it means to be a good partner and funder of the multilateral development system.
Two agreements, the Grand Bargain and the UN Funding Compact, include mutual commitments by member states and multilateral organisations, among other stakeholders, to better serve people in need. They pledge to improve the quality of funding for multilateral organisations, and strengthen the transparency, accountability and effective use of resources to achieve collective results.
Basic standards for partnering with the multilateral system can be drawn from these and other commitments.
Note: Section II.1 of the OECD DAC Peer Review Analytical Framework sets out the Development Assistance Committee’s expectations with regard to multilateral partnerships, including that members’ partnerships are coherent across government and complementary to bilateral efforts.
1. Develop transparent multilateral strategies. Be clear about how multilateral support and engagement fits with bilateral development co-operation and humanitarian efforts, and the overall approach to multilateralism.
Spain’s Strategy for Multilateral Sustainable Development Policy sets criteria for the prioritisation of funding to multilaterals. It also aims to protect strategic multilateral capacities by reorienting funding to sectors most affected by ODA cuts and promotes the use of Strategic Partnership Frameworks with multilaterals to co-ordinate funding.
Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) sets the principles, goals and priorities in its multilateral development policy, including advancing social justice worldwide and strengthening the multilateral system.
Norway’s White Paper sets out its envisaged role and interests in multilateral co-operation, guiding its commitment to a strong multilateral system.
Sweden’s strategy for development co-operation promotes coherent and effective co-ordination, with other providers and the multilateral system, including with the European Union through the Team Europe approach.
2. Engage in regular dialogue with governing board members and multilateral representatives in headquarters and in partner countries. DAC Members can put development issues on the international agenda by advocating for multilateral solutions to food security, debt and vaccine access.
At governing board level. Reinforce mandates, support system reforms and greater transparency, incentivise co-operation across organisations, advocate for joint approaches, strong reporting on results, and encourage multilateral actors to have clear criteria to support local actors, where relevant.
Through country presence. Extend diplomatic and financial commitments to co-ordinating and ensuring synergies in country processes and programming.
Connect the dots. Ensure that engagement in governing boards and country-level experience mutually inform each other within a coherent, whole-of-government approach. Finland uses advocacy documents to ensure coherent messaging across its multilateral engagement and refines it based on influencing reports that capture knowledge and results to support organisational learning.
3. Employ a mix of flexible, predictable, multi-year funding (for organisations that do not rely on replenishments) in response to clear needs. Allow for short-term funding when appropriate.
Italy supports multilateralism through predictable, multi-year core and softly earmarked funding. The development finance institution, Cassa Depositi e Prestiti (CDP), positions Italy as a strategic partner for multilateral actors, including through co-financing with multilateral development banks.
Multi-partner trust funds and country-based pooled funds offer flexibility and are a way to avoid proliferating single-donor initiatives, for example in fragile and conflict-affected contexts.
4. Prioritise the use of existing channels and structures to deliver funding.
The United Kingdom and Germany together with other key partners increased funding to a multilateral social protection programme by 24% in response to the negative COVID-19 effects in Rwanda.
Germany, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom are among top providers of voluntary contributions to the UN Resident Co-ordinator system via the Special Purpose Trust Fund.
5. Support transparency and accountability, through joint reviews and harmonised reporting. At a national level, simplify reporting requirements, report contributions to overall results and conduct any additional reviews jointly where possible.
Finland and the Netherlands regularly report to parliament on results they contribute to multilaterally.
Joint assessments and reviews such as MOPAN reduce the burden of multiple parallel accountability reviews or evaluations of multilateral organisations.
The Global Partnership’s monitoring exercise assesses the effectiveness of multilateral organisations by measuring their alignment to partner country priorities, focus on results, transparency and mutual accountability.
How do we know if DAC Members are moving in the right direction?
Co-operation across governing boards and between member states, as well as engagement with multilateral partners, respects the mandates of multilateral organisations, promotes agreed system-wide reforms, and supports joint approaches that incentivise co-operation across multilateral organisations and streamline reporting requirements.
Engagement and funding support the governance and effectiveness of multilateral organisations, reinforcing their ability to fulfil their mandate, while allowing for flexibility and adaptive programming. This is achieved through core and earmarked funding in line with the principles of good practice and commitments made as part of the international reform agenda.
Dialogue and feedback between actors ensures that bilateral and multilateral efforts are complementary and, where possible, mutually reinforcing, in support of the member’s overall development co-operation and humanitarian policy.
Decisions on multilateral funding aim to prevent the proliferation of entities and channels, with the intention of making individual organisations and the multilateral system as a whole more effective.
Multilateral Development Finance reports, OECD Publishing, Paris.
Development Insights: DAC peer learning brief on effective support for the multilateral, Development Co-operation Directorate, Development Assistance Committee.
Ensuring effective and quality support for the multilateral system, Development Co-operation Directorate, Development Assistance Committee.
From global to local: Multilateral actors and the pivot to locally led development, Development Co-operation Directorate.
DAC Evaluation Resource Centre (DEReC), OECD [website].
More Framework principles are available on Development Co-operation TIPs • Tools Insights Practices.
