Who’s funding the multilateral system?
With over $100 billion in annual funding available, the multilateral system serves as the primary implementer of the global development goals.
The multilateral system plays a pivotal part in the attainment of the global development agenda. Some, such as development banks, provide funding, while others, mainly the United Nations agencies, implement development and humanitarian activities. But regardless of their role, most multilateral organizations rely largely on funding provided by Development Assistance Committee member countries. In this analysis, we look into how exactly the world’s largest bilateral donors funded the multilateral system in 2023, which is the latest period to have final data from the Organisation for Economic Co-operation and Development. This predates the dismantling of the U.S. Agency for International Development and the U.S. government’s decision to cut its overall aid spending, the effects of which we expect to see reported in OECD data in the coming years. This analysis will provide an overview both of how other bilateral donors funded the multilateral system, and who among them spent the most, and where the impact of U.S. spending cuts is most likely to fall. All figures from OECD are in 2023 U.S. dollar prices. How do donors fund the multilateral system? In a nutshell, official development assistance, or ODA, is disbursed either as bilateral or multilateral aid. Bilateral aid flows directly from donors to recipient countries, while multilateral aid funds the programs and operations of multilateral institutions. A portion of bilateral aid also goes through multilaterals, when donors ask them to implement projects on their behalf. This is called bi-multi aid or contributions through multilateral. Although the projects are managed by multilaterals, this form of assistance is still considered as bilateral aid since it is earmarked for specific purposes identified by the bilateral donors — meaning that the multilaterals can’t dispense it at their discretion. How did the bilateral donors spend on multilateral aid? Of the $226.3 billion total ODA in 2023, $61.3 billion — or 27.1% — was spent as core multilateral aid. Another $46.3 billion, or 20.5% of the total ODA, was disbursed as bi-multi aid. The U.S. is the largest overall donor in the DAC, with $27.5 billion — $5.2 billion in core contributions and $22.3 billion in bi-multi aid. Germany ranked next, with $21.2 billion. Of this $16.2 billion was disbursed as core contributions, while the remaining $5 billion was bi-multi aid. The United Kingdom followed, with $8.8 billion — $6.7 billion in core contributions and $2.1 billion in bi-multi aid. The other top donors who spent the most on core contributions and bi-multi aid were: France, with $7.2 billion; Japan, with $6.7 billion; and Canada, with $5.5 billion. <div class='tableauPlaceholder' id='viz1748844404633' style='position: relative'><noscript><a href='#'><img alt='Dashboard 1 ' src='https://public.tableau.com/static/images/DA/DACmembercountriestotalmultilateralaidin2023/Dashboard1/1_rss.png' style='border: none' /></a></noscript><object class='tableauViz' style='display:none;'><param name='host_url' value='https%3A%2F%2Fpublic.tableau.com%2F' /> <param name='embed_code_version' value='3' /> <param name='site_root' value='' /><param name='name' value='DACmembercountriestotalmultilateralaidin2023/Dashboard1' /><param name='tabs' value='no' /><param name='toolbar' value='yes' /><param name='static_image' value='https://public.tableau.com/static/images/DA/DACmembercountriestotalmultilateralaidin2023/Dashboard1/1.png' /> <param name='animate_transition' value='yes' /><param name='display_static_image' value='yes' /><param name='display_spinner' value='yes' /><param name='display_overlay' value='yes' /><param name='display_count' value='yes' /><param name='language' value='en-US' /><param name='showShareOptions' value='false' /></object></div> <script type='text/javascript'> var divElement = document.getElementById('viz1748844404633'); var vizElement = divElement.getElementsByTagName('object')[0]; if ( divElement.offsetWidth > 800 ) { vizElement.style.width='600px';vizElement.style.height='627px';} else if ( divElement.offsetWidth > 500 ) { vizElement.style.width='600px';vizElement.style.height='627px';} else { vizElement.style.width='100%';vizElement.style.height='727px';} var scriptElement = document.createElement('script'); scriptElement.src = 'https://public.tableau.com/javascripts/api/viz_v1.js'; vizElement.parentNode.insertBefore(scriptElement, vizElement); </script> <i style=font-style: georgia;”>DAC’s total core multilateral aid and bi-multi aid in 2023, based on OECD.</i> Which among the multilaterals got the largest funding? The OECD data has seven primary categories for multilateral aid: the U.N. system, the European Union institutions, the World Bank Group, the International Monetary Fund, other multilaterals, other regional development banks, and all others that do not fall into any of the aforementioned classifications. Among the nearly 200 multilateral agencies and funds, the following received the largest total aid, counting both core contributions and bi-multi aid in 2023: EU development share of budget Core contributions: $16,249,606,016 Bi-multi aid: $104,361,109 The development share of budget refers to the EU’s overall allocation for its development work, which is funded primarily through its seven-year financing framework, Global Europe. The entire ODA came from European donors, with Germany providing the largest, worth $4.4 billion, all of which was given as core contributions. The other top donors were France, with $2.7 billion in core contributions and $22.1 million in bi-multi aid; Italy, with nearly $2 billion in core contributions and $16.2 million in bi-multi aid; Spain, with $1.4 billion in core contributions; and the Netherlands, with $933.2 million in core contributions. International Development Association Core contributions: $11,381,100,665 Bi-multi aid: $144,271,063 IDA is the World Bank institution that provides concessional loans and grants to low-income countries. The U.K. is IDA’s overall largest provider, with $2.1 billion in core contributions and $1.2 million in bi-multi aid. Then Japan, with $1.7 billion in core contributions; the U.S., with $1.4 billion in core contributions and $1 million in bi-multi aid; Germany, with $1.2 billion in core contributions and $16.2 million in bi-multi aid; and France, with $992.9 million in core contributions. IMF’s Resilience and Sustainability Trust Core contributions: $6,953,597,601 Bi-multi aid: No bi-multi contributions RST is IMF’s financing instrument for low-income and vulnerable middle-income countries, aimed at promoting long-term growth through building resilience to externalities. Currently, there are 23 countries with RST arrangements with the IMF. Four donors contributed core contributions to RST in 2023: Germany, with $6.8 billion; France, with $67 million; the U.K., with $54.8 million; and South Korea, with $19.5 million. World Food Programme Core contributions: $552,816,956 Bi-multi aid: $6,061,567,257 WFP — which dubs itself as the world’s largest humanitarian organization — relies mostly on voluntary contributions from donors. The U.S. was its top donor in 2023, with $3.6 billion, all in bi-multi aid. Germany followed, with $1.1 billion in bi-multi aid and $84.4 million in core contributions; Canada, with $261.6 in bi-multi aid and $18.5 million in core contributions; the U.K., with $162 million in bi-multi aid and $49.7 million in core contributions, and Norway, with $155.7 million in bi-multi aid and $40.7 million core contributions. The Global Fund to Fight AIDS, Tuberculosis and Malaria Core contributions: $4,023,606,021 Bi-multi aid: $74,433,387 The Global Fund is a global partnership that invests over $5 billion annually to address HIV, TB, and malaria. Among its top contributors were: the U.K., with $1.2 billion in core contributions; the U.S., with $811.5 million in core contributions; France, with $533.9 million in core contributions and $310,000 in bi-multi aid; Germany, with $448.7 million in core contributions; and Canada, with $298.8 million in core contributions and $74.1 million in bi-multi aid. <div class='tableauPlaceholder' id='viz1748844342758' style='position: relative'><noscript><a href='#'><img alt='Dashboard 1 ' src='https://public.tableau.com/static/images/Mu/Multilateralaidin2023byrecipientagencies/Dashboard1/1_rss.png' style='border: none' /></a></noscript><object class='tableauViz' style='display:none;'><param name='host_url' value='https%3A%2F%2Fpublic.tableau.com%2F' /> <param name='embed_code_version' value='3' /> <param name='site_root' value='' /><param name='name' value='Multilateralaidin2023byrecipientagencies/Dashboard1' /><param name='tabs' value='no' /><param name='toolbar' value='yes' /><param name='static_image' value='https://public.tableau.com/static/images/Mu/Multilateralaidin2023byrecipientagencies/Dashboard1/1.png' /> <param name='animate_transition' value='yes' /><param name='display_static_image' value='yes' /><param name='display_spinner' value='yes' /><param name='display_overlay' value='yes' /><param name='display_count' value='yes' /><param name='language' value='en-US' /><param name='filter' value='publish=yes' /><param name='showShareOptions' value='false' /></object></div> <script type='text/javascript'> var divElement = document.getElementById('viz1748844342758'); var vizElement = divElement.getElementsByTagName('object')[0]; if ( divElement.offsetWidth > 800 ) { vizElement.style.width='600px';vizElement.style.height='1227px';} else if ( divElement.offsetWidth > 500 ) { vizElement.style.width='600px';vizElement.style.height='1227px';} else { vizElement.style.width='100%';vizElement.style.height='977px';} var scriptElement = document.createElement('script'); scriptElement.src = 'https://public.tableau.com/javascripts/api/viz_v1.js'; vizElement.parentNode.insertBefore(scriptElement, vizElement); </script> <i style=font-style: georgia;”>Recipients of core multilateral aid and bi-multi aid in 2023, based on OECD.</i>
The multilateral system plays a pivotal part in the attainment of the global development agenda. Some, such as development banks, provide funding, while others, mainly the United Nations agencies, implement development and humanitarian activities.
But regardless of their role, most multilateral organizations rely largely on funding provided by Development Assistance Committee member countries.
In this analysis, we look into how exactly the world’s largest bilateral donors funded the multilateral system in 2023, which is the latest period to have final data from the Organisation for Economic Co-operation and Development.
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Miguel Tamonan is a Senior Development Analyst at Devex, where he analyzes data from public and private donors to produce content and special reports for Pro and Pro Funding readers. He has a bachelor’s degree in Political Science with a Major in International Relations from the Polytechnic University of the Philippines.
