Development Assistance Committee

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Development Assistance Committee

The OECD's Development Assistance Committee (DAC) is a forum for its member states to discuss issues surrounding development and poverty reduction in developing countries.

Members

There are currently 23 members of DAC, including the European Commission, which acts as a full member of the committee, although it is not a member state in the judicial meaning of the term. The World Bank, the IMF and UNDP also participate as observers.

Founding members (1961):

European Commission

* (Joined in 1961, withdrew in 1974 and re-joined in 1991.)

Joined later (listed alphabetically with year of admission):

(1966)
(1965)
(1963)
(1975)
(1999)
(1985)

* (1992)

* (1973)

* (1962)

* (1991)

* (1965)

* (1968)

History

Formerly known as the Development Assistance Group, the DAC was created by Ministerial Resolution of 23 July 1960. Its first mandate reads:

This institutionalization of development aid also marks the emergence of the national aid agencies of the member states. Canada created an "External Aid Office" in 1960, which in 1968 became the Canadian International Development Agency (CIDA). France was the first country to establish a Ministry for Co-operation to be responsible for assistance to independent, mainly African, developing countries in 1961, the predecessor to French Development Agency Agence Française de Développement (AFD). Enactment in the United States in 1961 of the Foreign Assistance Act as the basic economic assistance legislation, established the United States Agency for International Development (USAID).

Later the rest of the member states followed, either establishing an aid agency under the command of its Foreign ministry or as a separate entity.

Functions

The work of the committee concentrates on

how international development cooperation contributes to the capacity of developing countries to participate in the global economy, and
the capacity of people to overcome poverty and participate fully in their societies.

To this end, the committee holds an annual High Level Meeting where the ministers or heads of the national aid agencies meet to discuss issues related to development and adopt recommendations and resolutions. It is also attended by senior officials of the World Bank, the IMF and UNDP.

The member states are expected to have certain common objectives concerning the conduct of their aid programmes. The committee therefore issues guidelines on the management of development aid. It also publishes a wide range of reports, among them the annual OECD Journal on Development and the Development Co-operation Report. In addition, as OECD countries recognise the need for greater coherence in policies across sectors that affect developing countries, an initiative on Policy Coherence for Development explores ways to ensure that government policies are mutually supportive of the countries' development goals.

The subsidiary bodies of DAC are:

Working Party on Statistics
Working Party on Aid effectiveness
Network on Development Evaluation
Network on Gender Equality
Network on Environment and Development Co-operation
Network on Poverty Reduction
Network on Governance
Network on Conflict, Peace and Development Co-operation
Fragile States Group

Since 2008 its chair has been Mr. Eckhard Deutscher.

Achievements

As already noted, the DAC is a forum for the bilateral donors where they coordinate their aid efforts. One of the principal questions that emerged was how to ensure that its member states contributed equal shares of development aid. In the early 1960s, some member states contributed a significantly larger share of their GNP than others. To encourage that the aid effort was equally divided, DAC quickly recognized the UNCTAD recommendation on having an International Aid Target, proposed in 1964. The issue of the aid burden-sharing eventually lead to the first report on “Total Official Contributions as Per Cent of National Income” in 1967, something that was accompanied by closely negotiated explanations.

Another early question was what a donor could include when it reported its aid efforts to the committee. It was necessary to make the distinction between official transactions that were made with the main objective of promoting the economic and social development of developing countries, as opposed to other official flows (OOF) like military assistance. To that end, the committee adopted the concept of Official Development Assistance (ODA) in 1969. The definition had to be renegotiated in 1972, but has remained unchanged since then. At the DAC High Level Meeting in May 2008, members agreed to untie their aid to the 39 highly indebted poor countries (HIPCs) and to promote buying goods and services locally in these countries, rather than in donor countries.

As a forum for and by the bilateral donors, each donor’s aid efforts are evaluated in peer reviews where major findings and recommendations are presented. Each DAC member country is reviewed once every four years.

More recently DAC, in collaboration with the World Bank, has been involved in questions related to aid effectiveness. This collaboration lead to the adoption of the Paris Declaration on Aid Effectiveness at the DAC High Level Meeting in 2005. Progress in implementing the Paris Declaration commitments will be reviewed at the third High Level Forum on Aid Effectiveness in September 2008, an event co-ordinated by the DAC's Working Party on Aid Effectiveness, the government of Ghana and the World Bank. The UNCTAD has noted that since the turn of the century, DAC has become one of the dominant institutions with regards to development aid.