Chapter 1.4 looks into official development assistance. Official development assistance (ODA) is provided by governments or multilateral development banks (MDBs) to support economic development in other countries. Key learning includes that

• ODA is critical to achieving the United Nations Sustainable Development Goals (SDGs) in the world’s poorest countries

• The lowest-income countries typically receive less ODA than comparatively wealthier countries due to their limited capacity to absorb additional funds.

• MDB funds are best utilized when they are invested in under resourced areas, such as global or regional public goods, and when they are well-aligned with domestic policies and national goals.

• ODA success (i.e. resources having a meaningful impact on development outcomes) depends on

• – Prioritizing the right long-term development challenges

• – Effective domestic governance and an active role for national-level stakeholders

• – Transparency around ODA activities

• – Continuous assessment, evaluation, learning and improvement.

• ODA and financing institutions must adjust to new challenges such as climate change

• – moving away from a sector-by-sector approach, addressing trends and emerging themes and delivering innovative and agile financing mechanisms.