The landscape of international development cooperation is changing. Two decades ago, Northern donors – member countries of the DAC OECD and the Bretton Woods Institutions – were the overwhelming source of international development assistance. Aid was a government-to-government affair, and to set the agenda, control implementation, and attach conditions on their aid. By and large, these features of the aid system endure. Yet some things are different, owing to changing economic conditions, as well as to efforts to rethink and reform the practice of development assistance:
- Northern aid is losing (some) ground. DAC OECD donors remain the main source of official development finance. However, the pursuit of fiscal austerity has led to declining aid budgets in some donor countries. Furthermore, many developing countries aim to reduce their aid dependence, impelled not least by dissatisfaction with how Northern donors practice development cooperation. They are helped by greater access to a wider range of instruments and sources to promote development outcomes.
- Alternative sources and actors are taking hold. Though still dwarfed by traditional ones in terms of magnitude, these new sources and actors are gaining ground. Non-traditional sources and actors include philanthropic organizations, global vertical funds, developing countries, the private sector, and civil society organizations (CSOs). The 4th High-Level Forum on Aid Effectiveness (HLF-4) in Busan formalized the inclusion of these actors and their forms of cooperation into the global dialogue for development cooperation, the Global Partnership for Effective Development Cooperation (GPEDC). Particularly important is the recognition and inclusion of CSOs and South-South cooperation (SSC), mindful of their distinct roles in the development process.
- There is wider consensus around inclusive partnerships and the centrality of country ownership. Busan has built a consensus around a set of principles, chief among them, a commitment to developing country ownership and inclusive development partnerships. In contrast to Paris, these principles apply to a wider constituency of actors and more diverse forms of development cooperation.
Among the new actors that now come under the aid architecture’s expanded mandate, none have drawn more attention than the “emerging” developing country donors. South-South cooperation is by no means new. South-South cooperation has a long history, with some Southern institutions and developing countries contributing development assistance for almost half a century. The Kuwait Fund for Arab Economic Development (KFAED), for example, was set-up in 1961. China has also been providing assistance to African countries since the 1960s