Redefining ODA: An opportunity for more comprehensive development

The official discussion on widening the definition of official development assistance (ODA) presents an opportunity to recognise formally that development encompasses a broad range of political and societal changes and to incorporate current development narratives which take account of the connection between security and development. While any broader definition brings with it risks of diluting the concept of ODA, and an over-emphasis on ‘hard’ security, moving away from a focus on the technical and economic dimensions of aid delivery has the potential to deliver more comprehensive development outcomes, provided it is accompanied by greater oversight and scrutiny of ODA reporting, particularly around security activities.

Changes to the definition of ODA

Within the aid community there has been a growing emphasis on broadening the definition of aid to include more spending on security and stabilisation[1] activities. As the members of the Development Assistance Committee of the Organisation for Economic Co-operation and Development (OECD DAC) debate the redefinition of ODA, the UK, German and Dutch governments are advocating that further military spending[2] be considered relevant to the official aid measure.[3] Although this push has sparked serious concerns within the development community about the 'securitisation' of aid – i.e. an over-emphasis on hard security spending – this paper seeks to assess the proposed changes from a peacebuilding perspective. While there are certainly risks, this shift also presents an opportunity to deliver more comprehensive development outcomes for long-lasting transition in fragile and conflict-affected situations.

What is ODA?[8]

"ODA is defined as those flows to countries and territories on the DAC List of ODA Recipients and to multilateral development institutions which are:

  • provided by official agencies, including state and local governments, or by their executive agencies; and
  • each transaction of which: is administered with the promotion of the economic development and welfare of developing countries as its main objective, is concessional in character and conveys a grant element of at least 25 percent."

The connections between security and development have had renewed emphasis since the publication of the 2011 World Development Report on Conflict, Security and Development. As the report highlights, at the time of publication no low-income 'fragile state' or conflict-affected country had achieved a single Millennium Development Goal (MDG) and on average, a country that experienced major violence in the period 1981 to 2005 has a poverty rate 21 percentage points higher than a country that saw no violence.[4] Meanwhile, other international processes such as the ongoing development of global Sustainable Development Goals (SDGs) and 2012 agreement of Peacebuilding and Statebuilding Goals (PSGs) demonstrate that development is now seen as embracing a wide and comprehensive agenda. The PSGs, for example, define development in fragile contexts in terms of: legitimate politics; security; justice; sustainable and shared economic growth; and taxation and service delivery. The inextricable link between security and development is widely accepted.

While there are arguments that aid is becoming less influential in a contemporary global context where private investment flows and remittances are rapidly increasing,[5] it remains the case that in fragile and conflict-affected situations, ODA is the biggest financial inflow.[6] A review of the definition of ODA is therefore welcome to better reflect the deep connections between security and development, and the improved understanding of how development happens, especially in fragile and conflict-affected states.

Despite its current limitations, the OECD’s definition of ODA has become the only international benchmark for assessing official financial flows to the developing world;[7] no other globally-agreed shared framework exists. As such the OECD not only determines what is eligible as ODA, it ensures consistency and credibility in the way aid is understood. Any shifting definition of ODA will therefore significantly influence trends in the wider aid community.

What is TOSD?

While a finalised definition for TOSD has yet to be decided, the guiding principles behind the concept are to "provide a more comprehensive measure of donor contributions addressing global challenges and enablers of development (climate change, peace and security) and valorise market-like financial instruments".[11]

The new measure "would seek to encompass all development related spending, including those flows that qualify as ODA. It would complement, rather than replace ODA".[12]

The OECD has announced that a proposal for redefining ODA and also the broader measure of Total Official Support for Development (TOSD) is due at the end of the year, short of a final decision which will be related to the final version of the new SDGs, in 2015.

Realigning the ODA definition to fit with the post-2015 agenda of sustainable development would provide scope for including 'enablers of development' or 'global public goods' rather than the current definition of transactions administered for the 'economic development and welfare of developing countries'.[9]. This far broader remit, it is felt, will reduce the frequency of "regular requests from members to clarify the eligibility of activities that establish the preconditions for development in fragile post-conflict societies, such as peace and security and human rights, and the reporting on contributions to international organisations that work in these areas".[10]

The current definition of ODA with reference to security spending

Currently, the decisive criterion for whether something is ODA eligible is intention. If its main objective is assessed as economic development and welfare, it is deemed to be ODA eligible.[13] Certain aspects of security spending are therefore already included in the current definition of ODA:

  • the cost of using donor's armed forces to deliver aid or perform humanitarian services[14]
  • the net bilateral cost to donors of the following specific activities within UN-mandated peace operations:
    • human rights activities
    • election monitoring
    • repatriation and demobilisation of soldiers
    • rehabilitation of demobilised soldiers and of national infrastructure
    • monitoring and training of administrators, including customs and police officers
    • advice on economic stabilisation
    • weapons disposal and mine removal by civilians
  • Police training expenditure – unless it relates to paramilitary functions such as counter-insurgency work or intelligence gathering on terrorism
  • 7% of DAC members' multilateral assessed contributions to UN peacekeeping.[15]

Proposed changes to the ODA definition

There are two simultaneous pushes from DAC members on security:

  1. To include a larger portion of UN Department of Peacekeeping Operations (UN DPKO) and other UN-mandated peace and security spending within definitions of ODA, which would involve an update of the current eligibility criteria by increasing the 7% coefficient for multilateral contributions to UN peacekeeping, possibly to include all spending. This is on the basis that the UN DPKO would make available more detailed programmatic information on expenditures under the military component of its missions.[16]
  2. To expand the portion of security related costs that could be included in the definition, which would signal a more significant shift in the criteria. The latest round of discussions has considered including bilateral participation (i.e. personnel and equipment) in UN-mandated peacekeeping operations, police training in developing countries to 'combat violence by political groups'[17] and peace, security and justice expenditures 'with a clear developmental motivation'[18].

Global trends and the push towards redefinition: The G7, UK and EU

These proposed changes to the ODA definition are a part of a wider trend reflected in a realignment of the aid policies and behaviour of other institutions as well as of individual member states.

The G7 states, for instance, at a recent meeting in Brussels reiterated a focus on security and stabilisation with respect to fragile and conflict affected states in Africa. "Security and development are the prerequisite of a lasting peace in regions affected by the scourge of war, terrorism, organized crime, corruption, instability and poverty, notably the Sahel region, Somalia, Nigeria, South Sudan and Central African Republic. We welcome efforts by African partners and the African Union, supported by the international community, aimed at building their capacities to respond to crises and support stabilization."[19]

Within the UK’s aid strategy, significant changes are also underway. The government’s new Conflict, Security and Stability Fund (CSSF) – which will replace the existing Conflict Pool in April 2015 – looks to align aid policies more closely with national interests: "pooling new and existing resources across government to prevent conflict and tackle threats to UK interests that arise from instability overseas".[20] The ownership of the CSSF will also shift from the current partnership between the FCO, MoD and DFID to the National Security Council (NSC), with new actors who can bid for funds including the Home Office and security agencies. The CSSF will allocate approximately £1.3bn of funding in 2015–2016.

The priorities for the new CSSF will be set by the NSC: "to ensure a strengthened cross-departmental approach that draws on the most effective combination of defence, diplomacy, development assistance, security and intelligence".[21] This change means that FCO officers responsible for Conflict Pool funding who currently report to the Building Stability Overseas Strategy (BSOS) board, will report directly to the NSC under the new CSSF.

Share of ODA expenditure by UK government department (2013)[22]

DFID: 87.8%; DECC: 3.6%; FCO: 2.5%; CDC, Gift Aid and Colonial Pensions: 1.7%; Conflict Pool (non-DFID): 1.7%; EC attribution (non-DFID): 1.2%; BIS: 0.4%; Other government departments: 0.3%; ECGD: 0.3%; DEFRA: 0.3%; Home Office: 0.3%.

DFID's share of the total £12.22bn aid budget in 20152016 will be £10.6bn (86.7%), despite the chancellor’s autumn statement estimating that the share would hit 90% by 2014. The remaining funds are split between a number of other government departments as shown above.

Similarly a move to bring together security, trade and development in EU foreign policy has been observed, an important development in light of the EU institutions' position as the second biggest ODA donor. This is reflected in the EU’s comprehensive approach to external conflict and crises, which sets out increased coordination between EU agencies and Common Security and Defence Policy operations, and identifies a connection between external policies and internal security priorities.[23] In addition, there is still some speculation over the newly appointed High Representative for Foreign Affairs and Security Policy Federica Mogherini's stance on implementing the proposals of the comprehensive approach.

Seizing the opportunity to redefine ODA through a peacebuilding lens

The risks associated with extending the parameters of the definition of ODA have been much rehearsed by others. They include:

  • An increase in a member state’s ODA without any action: Increasing the coefficient used to calculate the developmental aspect of UN DPKO operations could mean no additional resourcing required from some members, to reach the 0.7% GNI target.[24]
  • Increased risk that aid budgets will be used to fund military action: Since UN DPKO financial reporting is not sufficiently transparent, an increase in the multilateral coefficient creates the risk that ODA would fund purely military components of interventions.
  • The pursuit of global priorities ahead of local priorities: The line between the global and local security and development intentions of ODA would be further blurred.
  • Crisis spending prioritised over long-term peacebuilding: Reactive and short-term crisis spending could dominate over longer-term peacebuilding and conflict prevention spending unless the notion of 'stability' at the heart of BSOS[26] is reaffirmed in UK aid reforms.
  • Military encroachment on peacebuilding and statebuilding activities: The trend towards stabilisation missions could lead to increased military involvement in development and peacebuilding activities.

But while these risks must be acknowledged, they can be mitigated by careful drafting of any new ODA criteria, and by improvements in transparency and scrutiny. As a peacebuilding agency, our main focus is on the opportunity to incorporate up-to-date development narratives which take account of peace and security, into how aid is defined and understood. That the OECD – a guardian of how governments label their spending – is revisiting definitions of ODA and paying greater attention to the interconnectedness of peace, security and development, presents a vital opportunity to move the traditional notion of development forward. The SDGs and the Peacebuilding and Statebuilding Goals (PSGs) offer a legitimate and comprehensive framework for conflict-sensitive development rather than simply 'aid', which must surely be reflected in the changing criteria of ODA.

Recommendations

We welcome the opportunity to broaden the definition of ODA to reflect an up-to-date understanding of development, and therefore of development assistance, provided any changes are accompanied by mitigation of risks, and especially enhanced parliamentary scrutiny. Since any redefinition of ODA is an opportunity to better respond to the connections between security and development and to promote long-term peaceful development, we recommend that:

  1. The focus on 'intention' within the original ODA definition should remain; the motivation and goal of activities rather than the instrument through which they are delivered should determine their eligibility.
  2. Because of the risks outlined above, parliamentary scrutiny of ODA reporting should be enhanced.
  3. If the percentage of multilateral contributions to DPKO that are ODA eligible is increased, this should be coupled with more comprehensive and transparent reporting from UN DPKO. This in turn should be accompanied by an increase in investment in peacebuilding initiatives within integrated missions, for example greater participation of civilian personnel with specific expertise in peacebuilding and mediation.[25] Most importantly, improved accountability about ODA would encourage clearer mandates and strategies for integrated missions, with more coherence and cooperation between peacekeeping and longer-term peacebuilding.
  4. In the UK, greater transparency in NSC decision-making regarding engagement in conflict contexts is needed. Decisions regarding the use of ODA should evidence how the safety and security of vulnerable populations in fragile and conflict-affected situations will be increased, in line with BSOS. A rigorous analytical and context-specific evidence base is needed to inform NSC decisions, and greater transparency will enable full parliamentary oversight.
  5. More broadly, the narrative of development enshrined in any redefinition of ODA should move away from its focus on the economic and technical aspects of aid delivery and towards the new broader understanding of development which includes the political and social dimensions of peacebuilding and statebuilding, in order to deliver a more comprehensive and wide ranging set of development outcomes.

[1] Defined by the UK government as an approach used in situations of violent conflict "to protect and promote legitimate political authority, using a combination of integrated civilian and military actions to reduce violence, re-establish security and prepare for longer-term recovery by building an enabling environment for structural stability". See: http://www.stabilisationunit.gov.uk/about-us/what-is-stabilisation.html

[2] Taking the Stockholm International Peace Research Institute (SIPRI) definition, this refers to expenditure on: the armed forces, including peacekeeping forces; defence ministries and other government agencies engaged in defence projects; paramilitary forces, when judged to be trained and equipped for military operations; and military space activities. It includes all current and capital expenditure on: military and civil personnel, including retirement pensions of military personnel and social services for personnel; operations and maintenance; procurement; military research and development; and military aid.

[3] Morazán, P., Niewerth, F. and Behrens, A. (2014). Modernising ODA in the framework of the Post-MDG Agenda: Challenges and Opportunities. Directorate General for External Policies, European Parliament. Brussels.

[4] World Bank (2011). World Development Report: Conflict, Security and Development. Washington.

[5] Severino, J-M. and Ray, O. (2009). The End of ODA: Death and Rebirth of a Global Public Policy. Centre for Global Development Working Paper 167. Wasington DC: Centre for Global Development.

[6] OECD (2012). Fragile States 2013: Resource Flows and Trends in a Shifting World. DAC International Network on Conflict and Fragility. Paris.

[7] Hynes, W. and Scott, S. (2013). The Evolution of Official Development Assistance: Achievements, Criticisms and a Way Forward. Discussion Paper 437. Dublin: IIIS.

[8] OECD (2008). Factsheet: Is it ODA? Paris.

[9] OECD (2013a). A New Measure of Total Official Support for Development: Issues and Options. DCD/DAC(2013)36. Paris.

[10] Ibid.

[11] OECD (2014a). Scoping the new measure of Total Support for Development (TOSD). DCD/DAC(2014)35. Paris.

[12] OECD (2013b). 'Measuring and Monitoring External Development Finance', Element 11, Paper 1. Paris.

[13] OECD (2008). Op. cit. Examples of specific assessments of security spending can be found in OECD (2007). ODA Casebook on Conflict, Peace and Security Activities. DCD/DAC(2007)20/REV1. Paris.

[14] This is context variable, but can include logistical support to enable access for humanitarian personnel or medical operations for instance. It does not include regular salaries and expenses of personnel performing these tasks. See: OECD (2008). Op. cit.

[15] This is based on a coefficient, since the UN accounts are not sufficiently detailed to ascertain which activities are ODA eligible or not. See: OECD (2008). Op. cit.

[16] OECD (2014b). Possible New Measure of Total Support for Development: Options Regarding Peace and Security, Climate Change and Global Programmes. DCD/DAC (2014)7. Paris.

[17] This refers to people trafficking, extortion, kidnap for ransom, child prostitution, etc. There is no direct mention of terrorism within this definition, but neither is it ruled out.

[18] OECD (2014b). Op. cit.

[19] European Commission (2014). The Brussels G7 Summit Declaration. Brussels.

[20] HM Treasury (2013). Spending Round 2013. London.

[21] Ibid.

[22] DECC: Department of Energy and Climate Change; FCO: Foreign and Commonwealth Office; CDC: DFID Investment Arm; EC: European Commission; BIS: Department of Business, Innovation and Skills; ECGD: Export Credits Guarantee Department; DEFRA: Department of Environment, Food and Rural Affairs. DFID (2013). Statistical Release: Provisional UK Official Development Assistance as a proportion of Gross National Income. Available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/300084/Prov-ODA-GNI-2013a.pdf

[23] European Commission (2013). Joint Communication to the European Parliament and the Council: The EU’s comprehensive approach to external conflict and crises. Brussels.

[24] Currently only Luxembourg, Sweden, Norway, Denmark, Netherlands and UK have reached the 0.7% target.

[25] The BSOS stability definition "can be characterised in terms of political systems which are representative and legitimate, capable of managing conflict and change peacefully, and societies in which human rights and rule of law are respected, basic needs are met, security established and opportunities for social and economic development are open to all. This type of “structural stability”, which is built on the consent of the population, is resilient and flexible in the face of shocks, and can evolve over time as the context changes". See: DFID, FCO and MoD (2011). Building Stability Overseas Strategy. London.

[26] Currently about 18% of paid mission staff are civilians. See: http://www.un.org/en/peacekeeping/resources/statistics/factsheet.shtml

Additional sources

DPKO/DFS (2012). United Nations Department of Peacekeeping Operations and Department of Field Support Civil Affairs Handbook. New York: UN.

OECD (2014c). Assessing the Boundary between ODA and Total Official Support for Development (TOSD) in the field of Peace Security and Justice. DCD/DAC (2014)34. Paris.

UNGA (2012). 67th Session: Scale of assessments for the apportionment of the expenses of the United Nations peacekeeping operations. Paris: OECD.