The world has seen unprecedented welfare gains in the last 50 years. The OECD’s Development Assistance Committee (DAC), the world’s principal donor forum, has contributed to these gains. It was a major force behind the Millennium Development Goals (MDGs), which continue to guide the development community. It enshrined the ownership principle as a central tenet of donor policy, allowing developing countries to take the lead in defining and implementing their own development strategies. It has successfully encouraged donor countries to provide more, and more effective aid. Thanks to these efforts, official development assistance reached a record level of USD 120.5 billion in 2008.

The combined acute effects of the food, energy and economic crises are a major challenge to the development community, raising searching questions about the real impacts of development, how to demonstrate them, what really underlies them, and our ability to control and account for them.

What do the global economic downturn and the commitments most donors have made to increase both the volume and effectiveness of aid mean, in practice, for managing aid? This chapter summarises the practical implications, focusing on three main aspects: dealing with major changes (either increases or decreases) in aid volumes; improving accountability; and building more effective organisations. It shares some of the practical steps taken in 2009 by individual DAC members to rise to these challenges.

Many developing countries consider trade to be a key component of their growth and poverty reduction strategies. However, trade flows are estimated to have declined by around 10% in 2009 as a consequence of the economic crisis, undermining confidence in trade’s role as an engine for growth and poverty reduction. Despite this, turning away from trade is not the answer. On the contrary, this chapter argues that it is all the more important to ensure that the right conditions are in place for integrating developing countries into regional and global markets.

While the developed world is working out the best mitigation strategies for reducing greenhouse gas emissions, the developing world needs help to adapt to the impacts of an already changing climate. “Development as usual” will not be adequate to climate-proof vulnerable populations and countries. Adaptation needs to be built into planning at all levels, from projects to national and sectoral strategies. This chapter outlines the DAC members’ role in this process and the challenges ahead.

The prevailing world economic crisis will only increase the level of scrutiny over the use of public funds. This chapter explores how the development community is making increased efforts to tackle corruption, whilst maintaining its commitment to the aid effectiveness agenda. The chapter draws on knowledge and lessons from the field, and research by the Development Assistance Committee’s Network on Governance to show how donors are increasingly working together in partner countries to understand and deal with corruption. Donor spending on a variety of initiatives aimed at strengthening governance is steadily increasing. In addition, international agreements like the UN Convention against Corruption (UNCAC) are helping to support coherent donor approaches. The chapter concludes by listing some further actions needed in today’s crisis environment to respond better to public concerns about corruption in the overall delivery of international aid.

We, Ministers of developed and developing countries responsible for promoting development and Heads of multilateral and bilateral development institutions, meeting in Paris on 2 March 2005, resolve to take far-reaching and monitorable actions to reform the ways we deliver and manage aid as we look ahead to the UN five-year review of the Millennium Declaration and the Millennium Development Goals (MDGs) later this year. As in Monterrey, we recognise that while the volumes of aid and other development resources must increase to achieve these goals, aid effectiveness must increase significantly as well to support partner country efforts to strengthen governance and improve development performance. This will be all the more important if existing and new bilateral and multilateral initiatives lead to significant further increases in aid.

This report incorporates data submitted up to 20 November 2009. All data in this publication refer to calendar years, unless otherwise stated. The data presented in this report reflect the DAC List as it was in 2008 (for a complete list of countries, please refer to the end of this volume).

The Query Wizard for International Development Statistics (QWIDS) was developed in 2007 by the Development Assistance Committee (DAC) to improve the accessibility and user-friendliness of its databases.* QWIDS provides easy access to statistics on aid flows. It is an intuitive system, designed to enable a novice user to easily navigate the system, search for and extract data.