Five things we learned about development finance while building Aid Atlas

Finance for development is a crucial building block for many of the world’s poorest countries. The scale of development aid has been growing over the past decade. According to the OECD’s Creditor Reporting System (CRS), aid commitments grew from US$ 169 billion in 2007 to around US$ 314 billion in 2017. Roughly 40% of the funding over this period was provided as grants, while most of the rest consists of ODA loans (22%) and Other Official Flows (35%). Not all Other Official Flows have been reported in the OECD CRS, this figure includes only those that are. Private development finance (mainly from large philanthropies) makes up around 2.5% of total reported flows.

To assess the effectiveness of this finance it is imperative to first understand where and how it is being used. But the aid landscape involves a lot of different actors and funding streams, so compiling this picture has never been straightforward. Hence, a lot of effort is today spent tracking development finance, trying to see how much is being provided, where it is spent, and what use it is being put to.

The most comprehensive data set is that compiled by the OECD’s Development Assistance Committee (DAC). The DAC’s CRS database houses large volumes of data reported to the DAC by “donor” countries, some multilateral finance institutions, development- and climate-focused funds, and some large private philanthropies. Although the data is publicly available, it is not easy to use. The database itself has been developed over time and was never originally designed for publicly tracking development finance. But it is the most comprehensive data set available, and it can provide valuable insights into trends in aid over extended periods.

Smaller countries can and often do struggle to put together a coherent overview of the support they are receiving, or of how donor countries are accounting for this support. All of this makes it difficult not only to see what is happening, but also to evaluate whether the funding is generating lasting positive impacts for those who need it most, which should be the whole point of development finance.

For this reason, SEI developed Aid Atlas. The Atlas is an interactive platform that allows easy analysis of extensive data about development finance. Aid Atlas can be especially useful for decision makers in developing countries, where finance data can be leanest. It is simple, intuitive to use, and enables a range of analyses that helps users to better understand where aid is coming from, where it’s going, and what it’s being used for. It allows users to tailor data to their specific interests.

By making detailed analysis possible in an instant, one of the main aims of the tool is to free up resources so that those interested in aid effectiveness can move beyond spending so much effort tracking financial flows, and instead start interrogating whether aid is having a meaningful impact on the ground in developing countries.

Aid Atlas is freely available to use at aid-atlas.org.

Five lessons

While building Aid Atlas, the authors spent time analysing the OECD’s CRS data set in order to find ways of turning the data into useful analyses. Watching financial data come to life so quickly, and visually, sheds light on some fascinating patterns about the aid landscape.

The five key lessons – discussed in more detail in the brief – are as follows:

• A global environmental crisis is not translating into large volumes of finance
• The refugee crisis in Europe was an additional burden on some large aid providers
• Finance for critical agendas like sustainable oceans cannot be assessed properly
• Some donors do not disaggregate their data to individual recipients, sectors or policy objectives
• There are implementation problems with climate finance