copy the linklink copied!Executive summary

Austria has been a member of the Development Assistance Committee (DAC) since 1965 and was last reviewed in 2015. This report reviews progress since then, highlights recent successes and challenges, and provides key recommendations for going forward. Austria has partially implemented 73% of the recommendations made in 2015, and fully implemented 16%.

This review – containing both the main findings and recommendations of the DAC and the analytical report of the Secretariat – was prepared with reviewers from Ireland and the Slovak Republic for the DAC Peer Review meeting of Austria at the OECD on 5 December 2019. In conducting the review, the team consulted key institutions and partners in Vienna, Austria and in the field in Pristina, Kosovo in June 2019.

Global development efforts. Austria’s efforts to address global challenges such as peace and security underpin its strong engagement and leadership in Southeastern Europe. Its longstanding domestic commitment to environmental sustainability also provides a solid basis for Austria’s international engagement and advocacy on environment and climate. Nevertheless, Austria lacks the institutional arrangements or a mechanism to systematically identify, analyse and monitor the transboundary impacts of its domestic policies on developing countries. While it performs well on policy coherence metrics relating to technology and security, more could be done in the banking and financial sectors and to meet emissions reduction targets. Austria commits considerable resources to development awareness and global citizenship, however an updated strategy is needed to effectively guide these efforts. Strengthening multi-stakeholder engagement, including with the private sector, may help it to raise the profile and support for the 2030 Agenda within Austria.

Policy vision and framework. Whole-of-government co-ordination is a challenge for Austria. The Three-Year Programme on Austrian Development Policy reflects the Sustainable Development Goals (SDGs) and guides the efforts of the Austrian Development Agency (ADA) and Ministry of Foreign Affairs (MFA). While other actors contributing official development assistance (ODA) are aligning their strategies with the three-year programme, each ministry remains responsible for setting its own priorities. This makes it challenging for Austria to ensure that ODA programming and allocation decisions match development policy priorities. A set of strategic guidelines support the Ministry of Finance’s engagement with international financial institutions, and link this to poverty reduction. Given that Austria prioritises working with multilateral organisations, capturing all of Austria’s multilateral engagements in a single strategy would enable it to identify opportunities for synergies across government and help to increase its influence. Following withdrawal from MOPAN membership, it is not clear how Austria is working with other DAC members to contribute to performance assessments of multilateral institutions to inform its multilateral funding decisions.

Financing for development. Austria is not meeting its commitments to allocate 0.7% of its gross national income (GNI) to ODA, or to allocate 0.15% of GNI as ODA to least developed countries. Total ODA has declined since the last review and as a share of GNI, ODA is now at its lowest level since 2004. While Austria has increased allocations in certain areas, current projections in the three-year programme show a decline up until 2022. In accordance with the DAC Recommendation on Untying ODA, Austria also needs to reduce the high and fluctuating share of its ODA that is tied to Austrian businesses. Core contributions to multilateral institutions comprise over 50% of its ODA budget and additional bilateral funding is channelled through multilateral organisations that meet its priorities. Austria’s approach to private sector development has also improved, offering more support to the enabling environment for private sector growth, and greater efforts to ensure a development perspective across its initiatives. Greater co-ordination of the various actors’ support for private sector development would enhance impact. Austria’s support for taxation programmes in Eastern Europe is another strength of its development finance approach.

Structure and systems. ADA continues to strengthen its systems and processes, including its approach to priority cross-cutting issues, environment and gender. These efforts position it well to implement quality Austrian development assistance as well as delegated co-operation on behalf of the European Union. Yet the fragmented nature of Austria’s development co-operation system presents challenges for co-ordination and a more coherent whole-of-government approach in priority countries and territories is needed. ADA’s lack of empowerment to act as the primary implementing agency for Austria’s ODA activities is a missed opportunity for achieving well-co-ordinated and effective development co-operation. Austria has clear processes and quality assurance checks in place for the bilateral ODA managed by ADA and the Development Bank of Austria (OeEB). Federal ministries tend to rely on multilateral institutions’ own systems and procedures to ensure the quality of multilateral co-operation. Austria has a strong focus on internal and fiduciary risks and ADA is enhancing risk management in its programming. However, a better understanding and assessment of risks in specific sectors and programmes would strengthen the overall approach to risk management. While ADA, the Ministry of Finance and OeEB have increased their staffing levels since the last review, ADA’s human resources are under pressure, particularly in co-ordination offices which would benefit from greater devolution. Further investments in staff training are also needed.

Delivery and partnerships. Austria places strong emphasis on country ownership and is seen as a consistent and effective partner in its priority partner countries and territories. The quality and commitment of staff in Vienna and co-ordination offices boost Austria’s reputation as a reliable development partner. Including all Austrian contributions in country strategies would help ensure a more coherent and co-ordinated approach, and enhance predictability and transparency for partners. Austria also places value on mutual accountability and inclusion in its development partnerships. Nevertheless, Austria’s approach to partnering with civil society could be strengthened by increasing direct support for local civil society organisations and improving their enabling environment.

Results, evaluation and learning. ADA and OeEB have improved their results-based management since the last review, including by linking results to the SDGs. Yet greater transparency and accountability are needed over the contributions of the various Austrian development actors. While ADA and OeEB provide information online and the MFA produces an annual ODA report, more comprehensive information on Austria’s ODA activities and their results would ensure greater accountability for the use of taxpayer funds and increase public understanding of development co-operation. Austria has strengthened its evaluation approach, including developing a comprehensive, inter-ministerial evaluation policy that applies to five key development actors. ADA could be more selective about what is evaluated and make better use of the results of monitoring by implementing partners. The fragmented nature of Austria’s development co-operation system makes institutional learning a challenge. Sharing and disseminating lessons more formally and systematically would improve this.

Fragility, crises and humanitarian aid. Austria increasingly values the role of development co-operation in supporting its long-standing commitment to conflict prevention. However, in practice Austria has few mechanisms available to respond to emerging crises. A dedicated conflict prevention mechanism could help Austria to better link its commitments to peace and development. Austria’s outdated humanitarian strategy does not reflect the current reality of its assistance. In addition, Austria’s humanitarian assistance – which follows a needs-based approach – would be more fit-for-purpose and nimble if decisions on individual projects were made at the appropriate working level. Evaluating Austria’s humanitarian system would be a good first step in updating its humanitarian strategy and making humanitarian assistance coherent with development co-operation and peace building.

copy the linklink copied!The DAC’s Recommendations to Austria

  1. 1. Austria should mandate the Ministry of Foreign Affairs to:

    1. a. lead the development of an overarching vision for Austria’s development co-operation within its three-year programme, including a framework of joint strategic goals, indicators and timelines

    2. b. set out in future three-year programmes the respective contributions and roles of all ODA-contributing actors, and clearly link projected budget allocations to policy priorities

    3. c. subsequently lead implementation of a coherent and co-ordinated approach to its total development co-operation effort.

  2. 2. Austria should include its total contribution to sustainable development in its country strategies, including relevant bilateral, regional and multilateral efforts.

  3. 3. Austria should increase the share of its bilateral budget that is programmable at the country and regional level, while focusing on those sectors and themes where it can add value.

  4. 4. Austria should ensure ADA is adequately resourced to fulfil the role envisaged for it in the Act on Development Cooperation, and to manage its growing responsibilities.

  5. 5. Austria’s public communication should go beyond project details to tell the full story of how its ODA contributes to sustainable development; this would build awareness, transparency and accountability.

  6. 6. Austria should reinforce its focus on conflict prevention by establishing a mechanism to facilitate rapid, flexible financing in fragile states and crisis situations.

  7. 7. Austria should further assess risks of corruption in its programmes, particularly contextual and sector-specific risks in partner countries, to strengthen its overall corruption risk management approach.

  8. 8. Each Austrian actor should consider the staff capability needed to deliver development co-operation effectively and efficiently, and put in place a human resources action plan to achieve this.

  9. 9. Austria should develop a plan to increase its ODA in line with its commitment to allocate 0.7% of gross national income by:

    1. a. setting interim targets

    2. b. prioritising increases in ODA that are untied and have development as the primary objective.

  10. 10. Austria should empower and resource a focal point or institution to lead on policy coherence for development, including responsibility for developing an action plan to address key areas of incoherence.

  11. 11. Austria should update its humanitarian policy to better reflect a pragmatic and coherent approach to engaging in protracted crises.


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