Italy

Introduction

In August 2014, the Italian parliament approved Law 125/2014, the primary legislation that reforms the Italian development co-operation system. The law set out to broaden partnerships, operationalise Italian development policy, and create more accountability and transparency. The primary objectives of Italy’s co-operation are poverty eradication, reducing inequalities and sustainable development; human rights, including gender equality, democracy and rule of law; and conflict prevention and peace-building.

Specifically, the law officially assigned the development co-operation portfolio to a Vice Minister of Foreign Affairs, called for the creation of an Agency for Italian Development Co-operation (AICS) and assigned new financial tools to transform an existing financial institution (CDP) into a development finance institution. The reform coincided with an upward trend in Italy’s official development assistance (ODA) until 2018. The upcoming DAC Peer Review will look at these challenging reforms and how the Ministry of Foreign Affairs and International Co-operation and the Agency have worked pragmatically to deliver them.

Official development assistance

After six years of steady net ODA increases (even when excluding in-donor refugee costs), Italy’s ODA dropped significantly in 2018. Close to half of ODA was multilateral, while bilateral ODA focused primarily on sub-Saharan Africa, the Middle East and North Africa in 2017, but not necessarily on its 22 priority partner countries. Italy still struggles to fulfil its global commitment to invest a higher share of ODA in the least developed countries (LDCs); in 2017, lower middle-income countries received the highest share of bilateral ODA. The share of ODA with a principal or significant objective targeting gender equality, the environment and climate change adaptation increased from 2017 to 2018.

In 2018, Italy provided USD 5.01 billion in total ODA (preliminary data, current prices), using the new “grant-equivalent” methodology (see the methodological notes for further details) adopted by DAC members on their reporting of 2018 data as a more accurate way to count the donor effort in development loans. This represented 0.24% of gross national income (GNI). Under the “cash-flow basis” methodology used in the past, 2018 net ODA was USD 4.90 billion, which represented a fall of 21.3% in real terms from 2017, partly due to lower in-donor refugee costs in Italy.

While in-donor refugees costs declined in 2018, they were USD 1.8 billion in 2017, which was an increase of 5.6% in real terms over 2016 and represented 30.8% of Italy’s total net ODA in 2017.

Italy’s share of untied bilateral ODA (excluding administrative costs and in-donor refugee costs) was 90.9% in 2017 (down from 95.0% in 2016), while the DAC country average was 82.1%. The grant element of total ODA was 98.8% in 2017. Non-grants represented 4.9% of gross ODA.

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In 2017, 53% of gross ODA was provided bilaterally, of which 17% was channelled through multilateral organisations (multi-bi/non-core contributions). Italy allocated 47% of total ODA as core contributions to multilateral organisations. Learn more about multilateral development finance.

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In 2017, country programmable aid was 20% of Italy’s bilateral ODA, compared to the DAC country average of 48% (see the methodological notes for further details on country programmable aid). Project-type interventions accounted for 64.6% of this aid.

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In 2017, Italy channelled 75.3% of gross bilateral ODA through the public sector (down from 80.7% in 2016). The share of bilateral ODA channelled through private sector institutions was 0.2%. In 2017, Italy channelled USD 35 million through universities or other teaching and research institutions, equal to 1.1% of its gross bilateral ODA. See the methodological notes for further details on channels of delivery.

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In 2017, USD 219 million of gross bilateral ODA was channelled to and through civil society organisations (CSOs). Between 2016 and 2017, ODA channelled to and through CSOs decreased as a share of bilateral aid (from 7.7% to 6.8%). Learn more about ODA allocations to and through CSOs and the Civil Society Days.

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In 2017, bilateral ODA was primarily focused on Africa. USD 141.0 million was allocated to North Africa and USD 341.4 million to sub-Saharan Africa. USD 236.3 million was allocated to the Middle East. Bilateral allocations to the Middle East and North Africa increased as a total share of bilateral ODA in 2017. Bilateral ODA to Latin America and the Caribbean also increased as a share of bilateral ODA, but this is due to debt relief operations in Argentina and Cuba.

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In 2017, 23.2% of gross bilateral ODA went to Italy’s top 10 recipients. Italy has 22 priority partner countries; six of them feature on the list of its top 10 recipients. This is explained by commitments at international/European level to address conflict and post-conflict situations, notably in Iraq, Turkey, Libya, and debt cancellation/conversion (e.g. Argentina). Support to fragile contexts reached USD 617 million in 2017 (19.2% of gross bilateral ODA). Learn more about support to fragile contexts.

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In 2017, 10.7% of Italy’s gross bilateral ODA (USD 343 million) was allocated to the least developed countries (LDCs). This is up from 12.5% in 2016 (USD 312.6 million). The DAC country average for 2017 was 23.5%. Lower middle-income countries received the highest share of bilateral ODA in 2017 (17.6%), noting that 29.3% was unallocated by income group.

At 0.06% of GNI in 2017, total ODA to the LDCs (including imputed multilateral flows) was lower than the UN target of 0.15-0.20% of GNI.

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In 2017, 19.7% of bilateral ODA commitments (USD 674 million), was allocated to social infrastructure and services, with a focus on health and population policies (USD 191 million), support to government and civil society (USD 190 million), and education (USD 176 million). Humanitarian aid amounted to USD 266 million. In 2017, Italy committed USD 268 000 of ODA to support developing countries to raise domestic revenue, amounting to 0.02% of bilateral allocable aid. Italy also committed USD 352 million (23.8% of bilateral allocable aid) to promote aid for trade and improve developing countries’ trade performance and integration into the world economy in 2017.

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USD 655 million of gross bilateral allocable ODA supported gender equality. In 2017, 57% of Italy’s bilateral sector-allocable aid had gender equality and women’s empowerment as a principal or significant objective (up from 38% in 2016), compared with the DAC country average of 36%. Italy applies a twin-track approach via: 1) specific investments that target women and their specific needs; and 2) mainstreaming gender equality and women’s empowerment across all programming. Italy’s aid to water and sanitation is almost all (96%) in support of gender equality. Learn more about ODA focused on gender equality and the DAC Network on Gender Equality.

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USD 632 million of bilateral ODA commitments supported the environment. In 2017, 42.7% of its gross bilateral allocable aid supported the environment and 19.7% (USD 291 million) focused on climate change, compared with the respective DAC country averages of 33% and 25%. Allocations supporting the environment and climate change increased from 33.8% and 11.9% in 2016, respectively. The proportion of bilateral allocable ODA focusing specifically on adaptation increased from 9.5% in 2016 to 19.3% in 2017, and the proportion focusing specifically on mitigation also increased, from 10.5% to 18.7%. Learn more about climate-related development finance.

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Other financial flows

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Institutional set-up

The Ministry of Foreign Affairs and International Co-operation (MAECI) is responsible for development co-operation oversight, decision making and co-ordination and political representation internationally in the broader context of Italy’s support of sustainable development. The Foreign Minister delegates development co-operation related matters to the Vice Minister for Development Co-operation. The Ministry of Economy and Finance (MEF) is responsible, in co-ordination with Foreign Affairs, for relations with multilateral development banks and funds and for debt relief operations. The Ministry of Environment and the Ministry of Interior play an increasingly important role in allocating ODA to multilateral entities and in-donor refugee costs, respectively.

The Directorate General for Development Co-operation (DGCS) within the MAECI is in charge of planning and policy making, country programming, multilateral policy, humanitarian assistance, and provision of loans. The Italian Agency for Development Co-operation (AICS) is mandated to perform technical and operational activities related to formulation, appraisal, financing, implementation, monitoring and evaluation of programmes and projects. It operates at the country level through its field offices.

The Cassa Depositi e Prestiti (CDP) is Italy’s development finance institution.

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Evaluation system

Italy’s new Law on International Development Cooperation emphasises the importance of evaluation. The Directorate General for Development Co-operation is responsible for impact evaluation of development co-operation activities. In 2017, the DGCS reorganised the evaluation office into two units that work closely with the new Aid Agency - AICS.

Evaluations are guided by a rolling three-year evaluation plan and new guidelines for evaluation. Italy systematically relies on external, independent evaluators that feature on a new electronic roster for service providers. Develop the evaluation function across the development co-operation programme continues to be a work-in-progress. Read more about Italy’s evaluation system.

Read Italy’s evaluation plan (in Italian ).

Visit the DAC Evaluation Resource Centre website for evaluations of Italian development co-operation.

Performance against the commitments for effective development co-operation

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Explore the Monitoring Dashboard of the Global Partnership for Effective Development Co-operation.

Additional resources

2014 DAC Peer Review of Italy: http://www.oecd.org/dac/peer-reviews/peer-review-italy.htm

Agency for International Development Co-operation (AICS): https://www.aics.gov.it

Ministry of Foreign Affairs and International Co-operation: https://www.esteri.it/mae/it/cooperaz_sviluppo

Member of the OECD Development Assistance Committee (DAC) since 1960.

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