![]() Whatever the causes, the “new ODA” is not fit for purpose. And there has also been a tendency to push technical decisions up to a political level where the necessary specialist expertise is lacking. Another was the intrusion of the idea of providing incentives to favoured forms of aid, especially those that offered financial returns to donors. One was increasing pressures from finance ministries to award more ODA credit for less real outlay. My view is that numerous factors drove this evolution. You may wish to form your own opinion by examining the key chronological references in the Annex below. It may seem incredible that the international statistical standard on such a sensitive issue as foreign aid spending could become so distorted and contradictory. I have therefore posted on the Brookings site here a summary of current problems with the “new ODA” as a statistical measure. Given my long association with DAC statistics, I feel obliged to alert users – including DAC members – to these issues. They fail to meet UN requirements for measuring performance against internationally agreed aid targets. They double-count the risk involved in lending to developing country governments. They allow some transactions to be reported in fundamentally different ways, ad libitum. They record different amounts for the same transactions, depending only on the counterpart. ![]() Among other problems, they mix statistical quantities, effectively adding up apples and pears. The new “headline” ODA figures break fundamental rules of statistical coherence and comparability. Yet so far, I do not believe that DAC members are fully aware of the scale of the anomalies and inconsistencies created by the combination of decisions, non-decisions, and renounced or abandoned decisions taken on the ODA measure since 2014. The result is, to put it bluntly, a mess. These rules have been the subject of almost constant tinkering over the past five years. In the months leading up to my retirement from the OECD in July this year, I became increasingly concerned about developments in the ODA reporting rules. I worked on the ODA reporting system for over 20 years, both as a reporter in two DAC member countries, and as an OECD official, and I headed the relevant OECD division from 2007 to 2015. As you know, one of the DAC’s major roles over the past 50 years has been as custodian of the ODA measure. ![]() I write to alert you to major problems with the current definition and reporting rules for official development assistance (ODA). Brookings Senior Fellow Tony Pipa adds his thoughts on what the fuss is all about. In this correspondence with Susanna Moorhead (the DAC’s chair since February of this year), Simon Scott, a former lead statistician at the OECD, warns that recent evolutions in the method of calculating ODA are undermining its usefulness and will ultimately jeopardize the DAC’s credibility. It is an important and ongoing debate and we are pleased to provide an open platform for its continuation. We have covered the topic of the reform of the definition of ODA before ( here and here). Its measure of donor effort underpins the DAC’s influence and reputation. The concept of Official Development Assistance (ODA) has served as its cornerstone. For most of its history, the OECD’s Development Assistance Committee (DAC) has been the premier multilateral forum for the world’s major donors to coordinate policies, encourage burden-sharing, and push each other to give more-and more effectively-to developing countries.
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