Aid extended by local and state governments

This report examines aid extended by local and state governments. It attempts to give a clear picture of the coverage of DAC statistics in relation to aid provided by local governments: which members report and how much? Which members do not report and why not? How much ODA may not be reflected in DAC statistics?

The authors consider the characteristics of aid extended by local governments and co-financing schemes, describing the characteristics of both. The document provides an overview of the institutional and judicial framework for the participation of local governments in development co-operation.

Conclusions include:

• proliferation of aid activities financed by local governments generally does not add to the administrative burden of partner countries’ central governments, as local governments are usually only permitted to provide aid to their counterparts in developing countries
• aid extended by local governments consists of a wide range of activities varying from small projects through cultural co-operation to imputed students’ costs. Only rarely do the activities result from strategic planning or country/sector programming. A few members have recently started to elaborate policy papers aiming at better integration of local government contributions within their overall aid programmes.