copy the linklink copied!3. Italy’s financing for development

This chapter considers how international and national commitments drive the volume and allocations of Italy’s official development assistance (ODA). It also explores Italy’s other financing efforts in support of the 2030 Agenda.

Italy’s ODA saw a sharp increase from 2012 to 2017, even when excluding in-donor refugee costs. However, this positive trend is not likely to continue, as ODA decreased in 2018, and Italy is not meeting its commitments for mobilising 0.7% of gross national income (GNI) as total ODA and allocating 0.15% of GNI as ODA to least developed countries. Geographic, thematic and multilateral allocations mostly match Italy’s priorities, but some mismatches warrant further reflection. Italy stands out for its high share of core contributions to multilateral organisations. Its international engagement on tax crime and vaccine development financing are commendable, but financing to mobilise domestic resources and private-sector engagement is still limited.


copy the linklink copied!Overall ODA volume

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Peer review indicator:

The member makes every effort to meet ODA domestic and international targets

Although it has still not met its domestic or international ODA-to-GNI commitments, Italy’s ODA saw a sharp increase from 2012 to 2017, even when not considering in-donor refugee costs. This positive trend is not likely to continue, however, as ODA decreased in 2018 and is projected to decrease further in the near future.

Law and policy are clear – Italy‘s ambition must be moving towards respecting its international commitments

Law 125/2014 commits Italy to increasing ODA in line with its international commitments. The Programming and Policy Planning Document 2017-2019 set the target of allocating 0.30% of gross national income (GNI) as ODA by 2020 (Government of Italy, 2018[1]). While this was revised upwards in the September 2018 update of the Economy and Finance Document: from 0.30% in 2020 to 0.36% in 2020 and 0.40% in 2021, (Ministry of Economy and Finance, 2018[2]) it was not referred to again in the April 2019 Economy and Finance Document (Ministry of Economy and Finance, 2019[3]).

After significant increases, Italy reduced its ODA in 2018 with further decreases planned until 2021

Italy increased its ODA substantially since 2012, even when not considering in-donor refugee costs (Figure 3.1). In 2012, the ODA to GNI ratio fell to 0.14%, the lowest share since 2000 (see Table B.1 in Annex B). Since then, Italy has managed a large increase, more than doubling its ODA to USD 5.9 billion in 2017, bringing it to 0.30% of GNI. Roughly half of the increase expanded the budget for development co-operation, while the other half resulted from higher in-donor refugee costs allocated by the Ministry of Interior. In 2017, in-donor refugee costs constituted USD 1.8 billion, or 30.8% of all ODA.

ODA growth began to stall in 2018. According to the new “grant-equivalent” methodology1 (OECD, 2019[4]), ODA totalled USD 5.0 billion in 2018 or 0.24% of GNI. To compare with ODA in 2017, it is necessary to use the previous methodology on a “cash-flow basis”. It shows that ODA dropped significantly, from USD 5.9 billion in 2017 to USD 4.6 billion in 2018 (constant 2017 prices). This is in large part due to fewer refugees and asylum seekers in Italy, lowering the associated costs (accounting for USD 1.1 billion or 23.0% of total net ODA). However, when in-donor refugee costs are excluded, ODA in 2018 still shrank by 12.3%, explained by Italy’s reduced spending on upper middle-income countries. The projections included in the December 2018 budget law foresee a decrease of EUR 375 million (7.4%) from 2019 to 2021, of which EUR 250 million (4.9%) are due to lower in-donor refugee costs (Ministry of Economy and Finance, 2018[5]).2 These reductions might curb Italy’s very positive ODA trajectory despite the ambition set out in Law 125/2014.

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Figure 3.1 Italy’s ODA increased every year until 2017
Italy’s ODA evolution in net flows and as a percentage of GNI, in billion USD, 2017 constant prices
Figure 3.1 Italy’s ODA increased every year until 2017

Note: GNI: gross national income; (p) = data for 2018 is provisional.

Source: (OECD, 2019[6]) “International Development Statistics” (database), (accessed 30 April 2019)


Italy complies with DAC recommendations on aid, but reporting could improve

While Italy provides loans through the Revolving Fund, including to least developed countries (LDCs), these are highly concessional. The grant element of total ODA commitments stood at 98.8% in 2017 (Table B.6). Loans constitute a small though growing part of gross ODA (5.7% from 2014-2017). Iraq, Argentina3 and one priority country, Tunisia, were the main beneficiaries of loans from 2014 to 20174. Italy’s share of untied aid is also high. However, in 2017 it dropped to 90.9%, from 95.0% in 2016 (Table B.6)5. In 2017, for the first time since 2004, Italy reported ex-ante notifications of untied aid, which is a welcome development (OECD, 2018[7]).Law 125/2014 also improved transparency on ODA6, but the quality of data reporting to the DAC needs to improve7 (OECD, 2019[8])

copy the linklink copied!Bilateral ODA allocations

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Peer review indicator:

Aid is allocated according to the statement of intent and international commitments

Italy’s bilateral allocations are less well matched to its geographic priorities than to its thematic priorities.

Priority countries do not always receive the highest allocations

Although Italy’s bilateral aid is concentrated, it is not necessarily concentrated on its priority countries. As a positive sign of concentration, the share allocated to Italy’s top 20 recipients of country allocable aid has increased, from 69% in 2012-13 to 77% in 2016-17, and most of these are priority countries (Table B.4).8 However, four out of the top five recipients in 2016-17 were not priority countries: Turkey, Iraq, Guinea-Bissau and Argentina. While this relates mainly to humanitarian assistance and debt operations, even when considering country programmable aid (CPA) from 2014 to 2017 (which amongst other items does not include these types of aid), the same discrepancy between priority and non-priority countries persists. Libya and Iraq9 are two non-priority countries, yet Italy’s share of CPA is higher in these two countries than in any priority country. In effect, in 17 of its 22 priority countries, Italy provides less than 2% of overall CPA (Figure 3.2). Italy does not meet the ODA to GNI target (0.15-0.20%) to least developed countries (LDCs) – in 2017, it stood at 0.06%, up from 0.05% in 2016 (Table B.7). However, Italy’s share of its country allocable aid to LDCs is similar to the DAC average (Table B.3).10

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Figure 3.2. Programmable aid does not match Italy’s country priorities
Italy’s volume of country programmable aid (CPA) 2014-17, as well as its share of all donors’ combined CPA and donor rank in each country
Figure 3.2. Programmable aid does not match Italy’s country priorities

Source: (OECD, 2019[6]) “International Development Statistics” (database), (accessed 30 April 2019)


Bilateral disbursements match Italy’s main thematic priorities and cross-cutting issues

Italy’s ODA spending on emergency response, support to government and civil society, debt operations, education, health and agriculture all reflect the fact that these are its priorities (Table B.5). As a strong multilateral donor and in line with the PPPD,11 Italy’s bilateral sectoral engagement should be viewed in conjunction with its multilateral funding, which is well matched to Italy’s priorities (Chapter 3). Italy has also made progress in addressing gender equality in a higher share of its programmes, from 38% in 2016 to 57% in 201712 (Chapter 2). However, high fluctuations and even better performance in previous years indicate the need for greater consistency in screening and advice for gender equality in design and implementation. Italy has significantly increased the share of projects that target or mainstream the environment, from 34% in 2016, to 43% in 2017. 13 Allocations addressing climate change increased from 12% in 2016 to 20% in 2017, but are still below the DAC average of 25%.

While AICS is successfully increasing the average project size,14 sectoral fragmentation is still high. Despite its commitment to concentration and the PPPD commitment to limit interventions to three sectors, Italy still engages in five or more sectors in 15 out of 24 countries.15 Less fragmentation could help Italy use its limited resources more efficiently.

Italy consistently allocates a high share of aid for civil society organisations (CSOs) as core support and CSOs are an important implementing channel for bilateral aid. Italy’s allocations to CSOs are larger than through CSOs, indicating its appreciation of CSOs as independent actors of development co-operation rather than solely project implementers (Wood and Fällman, 2019[9]). This sets Italy apart from most DAC members. However, total allocations for CSOs have not kept pace with bilateral ODA growth (OECD, 2019[10]). If in-donor refugee costs are excluded from the ODA total, the share of CSOs as an implementing channel for bilateral ODA was 16% in 2017, which is a decrease from 23% in 2016.

Similarly, while an OECD report noted the relevance of decentralised co-operation (between 1 and 3% of bilateral co-operation until 2015) and highlighted good practices by the Tuscany region (OECD, 2018[11]), aid channelled through local authorities dropped by more than half from 2016 to 2017 to its lowest value in more than ten years.16

copy the linklink copied!Multilateral ODA allocations

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Peer review indicator:

The member uses the multilateral aid channel effectively

Italy stands out for its high share of core contributions, which enable multilaterals to do their job. Aid allocations match priorities well, but Italy could reassess its strategies where it is a small donor in a priority organisation or a large donor in a non-priority organisation.

Working with the multilateral system is central to Italian co-operation

Italy allocates substantial resources to the multilateral system, mostly as core support (Figure 3.3). More than half of Italy’s ODA consistently goes to multilaterals. In 2018, this amounted to USD 3.0 billion, around 60% of total ODA. From 2011 to 2017, Italy’s engagement represented around 5% of all DAC country commitments to/through the multilateral system. Italy gives a much higher share of core support than other DAC donors. In peer review exchanges, Italy expressed its commitment to core funding in order to give the multilateral system the flexibility that it needs to fulfil its mandate. While Italy’s share of non-core funding has increased over recent years,17 at 15.6% of its total use of the multilateral system, it is still well below the DAC average of 35.2% in 2017.

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Figure 3.3. Italy provides significant core resources to the multilateral system
Italy’s gross disbursements to and through multilateral institutions
Figure 3.3. Italy provides significant core resources to the multilateral system

Source: (OECD, 2019[6]), “Creditor Reporting System” (database), (accessed 30 April 2019)


Multilateral support matches priorities, although levels of support vary significantly

With few exceptions, Italy’s multilateral support matches its priorities. By far the largest recipient of multilateral support is the European Union (roughly 60%), followed by the World Bank and regional development banks. Almost 80% of Italy’s multilateral spending in 2014-17 went to these organisations. In a number of priority organisations, Italy is a leading DAC donor, accounting for at least 9% (and sometimes more than 35%) of the organisation’s core and non-core contributions received by DAC countries (Table 3.1, top left quadrant). In many other priority organisations, Italy is still a sizeable donor with at least 2.5% (top right quadrant).

In some cases, Italy might want to review whether it should better match its strategies with its allocations. On the one hand, this relates to a few of its priority organisations where it is currently a small donor (bottom left quadrant). Prominent examples include organisations with very substantial budgets, where increasing Italy’s weight would require funding akin to its contributions to the MDBs, notably WFP, UNHCR, UNDP and the Global Fund. On the other hand, there are also a few organisations where Italy makes a large contribution even though the organisations do not feature in its co-operation strategy (bottom right quadrant).

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Table 3.1. In most priority organisations, Italy is a sizeable or even key donor
Italy’s contributions to and through select multilateral organisations, 2014-17

Priority organisations where Italy is a key donor

Priority organisations where Italy is a sizeable donor

Italy’s share of all DAC countries


Italy’s share of all DAC countries


> 35%


> 5%

Montreal Protocol Fund, UNEP

> 13%


> 4%

AfDF, AsDF, FAO, GEF, IADB Investment Fund, UNESCO

> 9%


> 2.5%

Adaptation Fund, GCF, UN Mine Action Service, World Bank Group

! Priority organisations where Italy is a small donor

? Other organisations where Italy is a key donor

Italy’s share of all DAC countries


Italy’s share of all DAC countries


< 1.5%

Global Fund, UNDP, UN Women, UNRWA, WHO core voluntary contributions

> 25%

Council of Europe Development Bank, EBRD technical co-operation and special funds, UN System Staff College in Turin

< 1.0 %


> 6%

Caribbean Community Secretariat, Council of Europe, OSCE, World Tourism Organization

Note: AIIB = Asian Infrastructure Investment Bank; AfDF = African Development Fund; AMC (GAVI) = Advance Market Commitments; AsDF = Asian Development Fund; CERF = Central Emergency Response Fund; CIHEAM = International Centre for Advanced Mediterranean Agronomic Studies; EBRD technical co-operation and special funds = European Bank for Reconstruction and Development – technical co-operation and special funds (ODA-eligible countries only); EU = European Union Institutions; FAO = Food and Agricultural Organisation; GCF = Green Climate Fund; GEF = Global Environment Facility Trust Fund; Global Fund = Global Fund to Fight AIDS, Tuberculosis and Malaria; IADB Investment Fund = Inter-American Development Bank, Inter-American Investment Corporation and Multilateral Investment Fund; IDLO = International Development Law Organisation; IFAD = International Fund for Agricultural Development; IFFIm (GAVI) = International Finance Facility for Immunisation; ILO RBSA = International Labour Organisation - Regular Budget Supplementary Account; Montreal Protocol Fund = Multilateral Fund for the Implementation of the Montreal Protocol; OCHA = United Nations Office of Co-ordination of Humanitarian Affairs; OSCE = Organization for Security and Co-operation in Europe; UN = United Nations; UNDP = United Nations Development Programme; UNESCO = UNEP = United Nations Environment Programme; United Nations Educational, Scientific and Cultural Organisation; UNHCR = United Nations Office of the United Nations High Commissioner for Refugees; UNIDO = United Nations Industrial Development Organisation; UNRWA = United Nations Relief and Works Agency for Palestine Refugees in the Near East; UN Women = United Nations Entity for Gender Equality and the Empowerment of Women; WFP = World Food Programme; WHO = World Health Organization; WTO-ITC = World Trade Organisation - International Trade Centre.

Source: OECD (2019), “Creditor Reporting System” (database),

copy the linklink copied!Financing for development

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Peer review indicator:

The member promotes and catalyses development finance additional to ODA

Italy’s international engagement on tax crime and vaccine development financing are commendable, but its support for mobilising domestic resources and private-sector engagement is still limited

On domestic resource mobilisation, Italy provides expertise on tax crime and debt management but little financing

Italy shows leadership in debt management and the fight against tax crime, and is the sole financial supporter of the Public Debt Management Network initiative fostered by the OECD, the Italian Treasury, and the World Bank. Italy facilitated the G7 Bari Declaration on Fighting Tax Crimes and other Illicit Financial Flows, hosts the OECD International Academy for Tax Crime Investigation, and supports, with other donors, the Africa Academy Programme for Tax and Financial Crime Investigations.

Although it is a member of the Addis Tax Initiative, its limited support to domestic resource mobilisation as reported by Italy to the Creditor Reporting System was lower in 2017 than in the baseline year 2015. At 0.02% of bilateral allocable ODA (USD 274 000), Italy now ranks 18th among DAC members. According to data reported directly to the Addis Tax Initiative by Italy shows a significant increase in its support to domestic resource mobilisation over the same period, which highlights a lack of coherent reporting by Italy in this area. Unlike some other donors and organisations, Italy has not moved away from requesting tax exemptions for its co-operation in partner countries.

The cost of sending remittances from Italy is lower than the global and G8 average (The World Bank, 2019[12]), but Italy has not clearly outlined how to achieve further reductions in line with the SDG target of less than 3%. According to its 2017 G20/Global Partnership for Financial Inclusion action plan, average remittance costs are 4.7%, and 7.9% for a number of corridors (Government of Italy, 2017[13]). The plan outlines financial education and inclusion activities for migrants in Italy, and Italy’s significant efforts to mobilise the diaspora for sustainable development in their countries of origin can be seen in this context (Chapter 1). However, the plan does not indicate specific activities that would help drive down the cost of remittances, which could be included in future plans.

Beyond its substantial support for private sector vaccine development, Italy’s private sector mobilisation is still small scale

Italy was instrumental in encouraging private sector research and production of a pneumococcal vaccine through a long-term and substantial contribution by the MEF. Italy is the largest donor for the Gavi (the Vaccine Alliance) Advance Market Commitment mechanism, financing more than 42% of a total of USD 1.5 billion in contributions. Also, as the third largest donor for the International Finance Facility for Immunisation (IFFIm), Italy’s commitments over 20 years have been particularly valuable in supporting Gavi’s negotiations with pharmaceutical companies. At a much smaller scale but with a similar logic of rewarding success, Italy is one of the donors to support the International Committee of the Red Cross and Red Crescent’s (ICRC) innovative Program for Humanitarian Impact Investment. The programme enables the ICRC to mobilise private social investment for its activities, with the risk of underperformance borne by investors and the ICRC (Chapter 7).

Although hampered by its rating18 in its capacity to take risks and mobilise capital, Italy’s new development finance institution Cassa Depositi e Prestiti S.p.A. (CDP) is increasingly building the capacity to fulfil its role as Italy’s financial institution for international development co-operation. At present, it focuses on partnering with MDBs and development finance institutions (DFIs)19 to identify opportunities for blending, including in the framework of the European External Investment Plan (Cassa Depositi e Presiti, 2019[14]) (see also Chapter 4). The CDP subsidiary, Società Italiana per le Imprese all’Estero (SIMEST) supports Italian companies’ engagement abroad with non-ODA financing. This includes a small amount of other official flows (USD 38.2 million in 2017) in common equity and interest subsidies in middle-income countries, notably People’s Republic of China and Brazil. Italy is setting up an internal system to track private finance mobilised by activities of SIMEST and other official agencies, and aims to start reporting to the OECD on 2018 flows. Italy is also publishing a pilot study on private finance mobilised for climate action in developing countries to track progress under the UN Framework Convention for Climate Change (UNFCCC).20


[14] Cassa Depositi e Presiti (2019), Relazione Finanziaria Annuale 2018, Cassa Depositi e Prestiti, Rome, (accessed on 7 May 2019).

[15] CDP (2019), CDP Rating.

[1] Government of Italy (2018), International Development Cooperation: Three-year Programming and Policy Planning Document 2017-2019, Ministry of Foreign Affairs and International Cooperation, Rome, (accessed on 12 April 2019).

[13] Government of Italy (2017), G20 National Remittance Plan - Italy, Global Partnership for Financial Inclusion,, (accessed on 12 April 2019).

[3] Ministry of Economy and Finance (2019), Documento di Economia e Finanza 2019: Sezione I - Programma di Stabilità dell’Italia (Economy and Finance Document 2019: Session I - Italy’s Stability Programme) (in Italian), Ministry of Economy and Finance, Rome, (accessed on 7 May 2019).

[5] Ministry of Economy and Finance (2018), Legge di Bilancio Integrato - previsioni di competenza e di cassa - 2019-2021: Stanziamenti destinati al finanziamento di interventi a sostegno di politiche di cooperazione allo sviluppo (Integrated Budget Law - forecasts of competence and cash - 2019-21), Ministry of Economy and Finance, Rome, (accessed on 7 May 2019).

[2] Ministry of Economy and Finance (2018), Nota di Aggiornamento del Documento di Economia e Finanza 2018 (Note to update the Economy and Finance Document 2018), Ministry of Economy and Finance, Rome, (accessed on 7 May 2019).

[10] OECD (2019), Aid for Civil Society Organisations, OECD, Paris, (accessed on 6 June 2019).

[8] OECD (2019), DAC Working Party on Development Finance Statistics, DAC Statistical Reporting Issues in 2018 on flows in 2017, Not published.

[6] OECD (2019), International Development Statistics,

[4] OECD (2019), “Official Development Assistance (ODA): What is ODA?”, OECD, Paris, (accessed on 2 July 2019).

[7] OECD (2018), 2018 Report on the DAC Untying Recommendation, OECD, Paris, (accessed on 22 May 2019).

[11] OECD (2018), Reshaping Decentralised Development Co-operation: The Key Role of Cities and Regions for the 2030 Agenda, OECD Publishing, Paris,

[12] The World Bank (2019), Remittance Prices Worldwide: Issue 29, March 2019, The World Bank, Washington D.C., (accessed on 27 June 2019).

[9] Wood, J. and K. Fällman (2019), “Enabling Civil Society: Select survey findings”, OECD Development Co-operation Working Papers, No. 57, OECD Publishing, Paris,



← 1. The grant-equivalent method for calculating ODA replaces the flow method, whereby grants and loans were valued in the same way. This did not reflect actual efforts by donor countries, since grants represent a bigger effort than a loan. The new grant-equivalent of loans provides a more realistic comparison of loans and grants, and provides a higher grant equivalent for highly concessional loans with a very low interest rate and a long repayment period.

← 2. The projections do not include ODA mobilised outside the Budget law through special decrees under law 145/2016, linked to Italy’s participation in international peace and stabilisation missions.

← 3. In Argentina, this does not relate to a new loan but the capitalised part of a debt operation, which had been agreed in the framework of the Paris Club.

← 4. In Argentina, loans related to debt rescheduling, in Iraq to projects on energy and agriculture, and in Tunisia mainly to projects on waste management and small and medium-sized enterprise development.

← 5. This is due to two large and partially tied operations in Argentina and Tunisia.

← 6. Law 125/2014 obliges the government to “[indicate] the mode to gradually adjust annual international development cooperation appropriations in such a way as to enable Italy to be in line with [international] commitments” (article 30).

← 7. Italy’s data submissions were timely, but it could improve the quality of reporting on short descriptions, purpose codes, channel codes, and tying status.

← 8. These ratios relate to gross disbursements of bilateral ODA that are allocated to a specific recipient country and do not reflect the significant share of unallocated ODA, notably costs for refugees in the donor country.

← 9. The new PPPD (2019-21) adds Iraq to the list of priority countries.

← 10. From 2014-16, between 41% and 49% of gross disbursements of Italian country allocable aid went to LDCs, with a drop in 2017 to only 30%. For the period 2014-17, the averages for both Italy and the DAC countries were 39%.

← 11. Thematic chapters of the Three-Year Programming and Policy Planning Document 2016-2018 indicate “Reference International Bodies”, i.e. those multilateral organisations with which Italy aims to co-operate in addition to its bilateral co-operation to achieve its objectives.

← 12. The DAC average for 2016 was 38%, for 39% for 2017.

← 13. In 2017, the DAC member average share of total bilateral allocable ODA supporting the environment stood at 33%.

← 14. Based on 2016-17 Creditor Reporting System (CRS) data, commitments for project-type interventions managed by AICS increased from an average of USD 0.8 million to USD 1.6 million.

← 15. Based on 2016-17 CRS data in 22 priority countries as well as Libya and Iraq, using the sub-sectoral breakdown of CRS data without humanitarian assistance, debt-related action and administrative or in-donor refugee costs.

← 16. From USD 16.8 million in 2016 to just USD 6.4 million in 2017. The next call for proposals launched in 2017 selected 22 development projects for a total co-financing of EUR 12.5 million to be channelled to Italian Regions and local governments.

← 17. The largest recipients of Italy’s non-core funding are the United Nations agencies, funds and programmes, notably the United Nations Development Programme (UNDP), United Nations Children's Fund (UNICEF), World Food Programme (WFP), Office of the United Nations High Commissioner for Refugees (UNHCR) and now also the International Organization for Migration (IOM), as a Related Organisation of the UN. The large increase is in particular due to significantly higher contributions through the European Union.

← 18. As an example, Standard & Poor’s long-term rating (set on 30 October 2018) for CDP is BBB (one grade above non-investment grade) with a negative outlook (CDP, 2019[15]). Ratings by Moody’s and Fitch are similar.

← 19. CDP’s legal framework provides for mandatory co-financing with European, international and multilateral financial institutions of development co-operation initiatives in support of private recipients or targeted at Least Developed Countries or Other Low Income Countries.

← 20. Italy receives support from the OECD Research Collaborative on Tracking Finance for Climate Action and will also report related data to the DAC.

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3. Italy’s financing for development