29 November 2018: The Organisation for Economic Co-operation and Development (OECD) examines the importance of multilateralism to development finance and SDG achievement, in a report launched at UN Headquarters. The report calls for a new “pact” on multilateralism, founded on the mutual responsibility of sovereign states and multilateral institutions.

The report titled, ‘Multilateral Development Finance: Towards a New Pact on Multilateralism to Achieve the 2030 Agenda Together’ was launched at an event hosted by the permanent missions of Switzerland and Indonesia, alongside OECD Development Co-operation Directorate Director Jorge Moreira da Silva.

The report provides an overview of official development assistance (ODA) spending through the multilateral system, and introduces three “innovations”: the growing role of China, other states, philanthropy and the private sector as funders of multilateral organizations; concessional and non-concessional spending by multilateral institutions; and a new set of metrics intended to measure the quality of multilateral funding.

Simply increasing funding volumes is not enough to deliver the 2030 Agenda.

Reviewing global trends to and from the multilateral development cooperation system, the report finds that resources for multilateral development cooperation are growing, but simply increasing the volumes of funding is not enough to deliver the 2030 Agenda. It points to the range of special reporting requirements demanded by funders as potentially hampering the performance of development partners. Such requirements, especially in a context of scattered, piecemeal funding, can lead to project-based or otherwise siloed interventions that jeopardize multilateral organizations’ ability to provide holistic, integrated solutions, the authors assert.

Acknowledging that multilateral development cooperation is evolving, the report outlines six principles and policy recommendations for “good multilateral donorship” in an increasingly complex field of actors and institutions:

1. Adopt whole-of-government approaches to define expected outcomes of multilateral partnerships and establish adequate coordination mechanisms;
2. Strengthen collective initiatives to assess performance, such as multilateral organizations’ evaluation units and the Multilateral Organization Performance Assessment Network (MOPAN);
3. Promote harmonized working practices of multilateral organizations and encourage discussions on systemic gaps and division of labor;
4. Fill gaps in underfunded areas by contributing to thematic windows and “softly” earmarking funds, rather than strictly earmarking them at project level;
5. Increase predictability of funding by making multi-annual commitments linked to the strategic plans of multilateral organizations; and
6. Use evidence to make decisions on earmarked funding and ensure alignment with the mandate and priorities of multilateral organizations.

In addition to the policy recommendations, the OECD presents a multi-dimensional index on good multilateral donorship, based on several recurrent dimensions identified in the report: programme budget financing, predictability, alignment, flexibility, reduced vulnerability/fragmentation, and transparency and accountability. These metrics, the report notes in Chapter 6, represent an attempt to quantify elements of “good” funding. While “there is no “good” or “bad” funding per se,” the metrics can help develop a new evidence base for effective multilateral development cooperation by assessing the performance of both donors and recipient multilateral organizations, and enabling a constructive dialogue amongst each.

The new metrics featured in the report were developed from a World Health Organization (WHO) case study that assessed the quality of funds provided to WHO by ten bilateral donors, the European Commission, and the Bill and Melinda Gates Foundation. [Publication: Multilateral Development Finance: Towards a New Pact on Multilateralism to Achieve the 2030 Agenda Together]