Welcome to the latest monthly roundup of news from the world of aid and development transparency. We’re pleased to share the date for the launch of this year’s Aid Transparency Index. Plus, we have details of new research examining USAID’s progress on its local funding goal, an examination of what development finance institutions reveal about their climate finance, an exciting opportunity to join our team, and a look at the International Development Association’s Private Sector Window.

USAID’s measurement approach is undermining its progress on localisation and its goal to diversify local partners

The US Agency for International Development (USAID) has made a bold

commitment to the localisation agenda: it has set a target that 25% of its funding will go directly to local partners by 2025. We congratulate USAID for its ambitious goal and for showing leadership in this area. However, new Publish What You Fund analysis shows that how USAID defines and measures localization is actually undermining its progress.

As we approach USAID’s deadline for reaching its 25% goal, Publish What You Fund is calling on USAID to commit to reviewing its approach to measuring localisation in 2025. We are highlighting two priorities:

• 25% of funding should mean 25% of ALL project funding. USAID excludes billions of dollars from consideration for its localization target – chiefly money going to UN projects. This accounted for $1.5 billion in the 10 countries we analysed. These funds provide a huge opportunity for directing more funding to local organisations.
• USAID’s definition of “local” allows the local offices of international organisations to be counted as local. This sets perverse incentives and is at odds with USAID’s desire to expand the diversity of local actors and amplify local voices.

The analysis is contained in our Metrics Matter II report. The outcome of our analysis illustrates how differences in measurement approaches change the funding amounts USAID will need to provide local organisations to reach the 25% target. It also shows that USAID is a long way from meeting its 25% goal.

Save the date: Launch of the 2024 Aid Transparency Index

Join us on Tuesday 16 July at 9.30 EDT / 2.30 BST for the launch of the 2024 Aid Transparency Index. The event will be hosted by Brookings Center for Sustainable Development in Washington DC and online. It will provide an opportunity to find out which of the 50 major aid and development agencies that we’ve assessed will top this year’s rankings. We’ll also be hearing a range of global perspectives on transparency tools that when joined up can help countries, donors, and citizens focus on which elements of the Sustainable Development Goals are on track, which aren’t and where the effort needs to be. Registration and speaker details will follow shortly.

How transparent is DFI climate finance?

Development finance institutions (DFIs) are increasingly pivotal in the climate finance landscape. As they channel more resources to climate finance, and prepare for a new global goal for low- and middle-income countries, Ryan Anderton investigates what exactly we know about current DFI climate investments. In short, he finds a messy picture. Enhanced transparency is crucial if we want to ensure that climate finance is valid, accountable and, most importantly, effective.

Read the blog here

Vacancy: Research and Project Assistant

£30,000, UK-based

Are you skilled in constructing and analysing large datasets? Do you want to use your research and support skills to improve the transparency of aid and development finance? We are looking for a detail-oriented, numerate Research and Project Assistant to support with data collection and research for our DFI Transparency Initiative. This is a full-time staff position for twelve months.

See more details and apply here

Is IDA’s Private Sector Window mobilising the private sector?

Since the World Bank’s International Development Association (IDA) established the Private Sector Window (PSW), there have been concerns about its structure, use of blended finance, and the inability to measure its progress and impact. With IDA21 replenishment discussions underway, Sally Paxton took a moment to consider whether and how the PSW is mobilising the private sector. In this blog she also asks, in the context of broader MDB reform efforts, how do we scale up private capital mobilisation to close the significant financial gaps needed to meet the Sustainable Development Goals?

Read the blog here

DFI Transparency Index: Methodology review and consultation

The DFI Transparency Index is a comparative measure of the transparency of the world’s leading development finance institutions. In preparation for its second edition, planned for July 2025, we are conducting a methodology review – to improve the rigour of the Index while maintaining comparability with the previous edition (published in January 2023). The proposed changes are a result of an in-depth internal review of the Index, in addition to consideration of feedback from stakeholders including civil society, the private sector, and DFIs. The changes we propose include introducing climate finance indicators and adjusting existing indicators, including private capital mobilisation, assurance of community disclosure, and instrument-specific disclosure.

We have published consultation papers on our

general methodology review and climate finance transparency indicators. We welcome comments on these proposals – which can be made in writing or by signing up for one of the following consultation sessions:

• Tuesday 25 June at 3pm BST / 4pm CEST / 10am EDT A 90-minute session focusing on the proposed climate indicators
• Wednesday 26 June at 3pm BST / 4pm CEST / 10am EDT A 90-minute session focusing on the general changes to the methodology
• Thursday 27 June at 1pm China Standard Time A 2-hour combined consultation session on the general changes and the climate indicators

Other news

Here’s a quick roundup of other news and publications we’ve been reading over the last few weeks:

An article in The Review of International Organizations explores a study by Bernhard Reinsberg, Mirko Heinzel and Christian Siauwijaya on earmarked funding for international organisations. The researchers built the Earmarked Funding Dataset, containing 342,812 earmarked aid activities from nearly 50 donors with over 340 international organisations with a mandate in international development from 1990 to 2020. Combining the data with newly available performance data, the researchers found a significantly positive relationship between outcome performance and earmarked contributions. In contrast, the research finds that performance does not seem to affect core resources. These patterns suggest that donors reward well-performing multilaterals with more funding, albeit based on development outcomes which are not easily contractible.

An article in the New Humanitarian explores ‘non-traditional’ aid donors and uses the UN’s Financial Tracking Service to examine how humanitarian funding is changing. It reports that non-traditional donors (particularly a handful of Gulf states) are already important to the humanitarian system – with around one in every eight dollars of humanitarian funding coming from non-DAC members. But it says the relative significance of non-traditional donors has decreased over the last ten years.

The #ShiftThePower movement has published an open letter to the OECD DAC calling for an end to discriminatory funding against Global South CSOs. It has produced related analysis of DAC member aid flows, showing systemic imbalances in the distribution of official development assistance.

The International Budget Partnership has released the latest Open Budget Survey, an assessment of national budget transparency, oversight and public participation in 125 countries. It shows that global budget transparency has increased by 24% since 2008, but it is still well below what is considered sufficient (a score at or above 61 out of 100) to allow for meaningful public engagement. Legislative oversight is also well below sufficient levels, and public participation is rare. In terms of regional transparency, since 2012, East Asia & the Pacific and Sub-Saharan Africa have had the steepest increases over time. Their progress, along with that of Eastern Europe & Central Asia and Latin America & the Caribbean, contrast with a significant fall over time in South Asia, stagnation in Western Europe, US, and Canada, and continued low performance in the Middle East & North Africa (albeit with improvements).

Unlock Aid has announced plans to launch a ‘Glassdoor for Primes’ platform, to allow local organisations to publicly review major international NGOs, contractors, and agencies on their accountability and treatment of subgrantees. This Devex story (£) outlines how the platform could bring greater transparency to the aid industry.

This article from the Lowy Institute looks at the 2024-2025 Australian foreign aid budget and the growing shift away from traditional grant-based aid spending. It warns that increased scale could be at the cost of transparency and development outcomes.

As the IMF reviews its transparency policy, this Eye on Global Transparency piece highlights the IMF’s current policy which does not allow the public to request documents and criticises the ‘opaqueness’ of the transparency review process.

A Bond blog explores the findings of a University of Leuven study comparing the trends in government funding of development CSOs in the UK with five other European countries (the Netherlands, Germany, Sweden, France and Belgium) over the period 2018-2023.

The National Democratic Institute, in collaboration with Transparency International, has developed a new Debt Transparency and Accountability Checklist. Covering 13 transparency and accountability principles and 59 good practices in debt management, the checklist offers civil society organisations a simple way to assess how transparent their country’s public debt is and offer recommendations on how to strengthen the public debt legal and institutional framework.

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