Development aid (or development cooperation) is a type of aid given by governments and other agencies to support the economic, environmental, social, and political development of developing countries, as well as least developed, low-income or poor countries. It is distinguished from humanitarian aid by aiming at a sustained improvement in the conditions in developing countries, as well as least-developed, poor of low-income countries, rather than short-term relief. The overarching term is foreign aid (or just aid). The amount of foreign aid is measured though official development assistance (ODA). This is a category used by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) to measure foreign aid.
Aid may be bilateral: given from one country directly to another; or it may be multilateral: given by the donor country to an international organisation such as the World Bank or the United Nations Agencies (UNDP, UNICEF, UNAIDS, etc.) which then distributes it among the developing countries. The proportion is currently about 70% bilateral 30% multilateral.
About 80% of the aid measured by the OECD comes from government sources as official development assistance (ODA). The remaining 20% or so comes from individuals, businesses, charitable foundations or NGOs (e.g., Oxfam).OECD, DAC1 Official and Private Flows (op. cit.). The calculation is Net Private Grants / ODA. Most development aid comes from the Western industrialised countries but some poorer countries also contribute aid. Development aid is not usually understood as including remittances received from migrants working or living in diaspora—even though these form a significant amount of international transfer—as the recipients of remittances are usually individuals and families rather than formal projects and programmes.
Negative side effects of development aid can include an unbalanced appreciation of the recipient's currency, increasing corruption, and adverse political effects such as postponements of necessary economic and democratic reforms.Rahnama, M. & Fawaz, F. & Gittings, K. (2017). The effects of foreign aid on economic growth in developing countries. The Journal of Developing Areas 51(3), 153-171. Tennessee State University College of Business.
Related concepts
There are various terms that used interchangeably with development aid in some contexts but possess different meanings in others.
Development cooperation: In the early 21st century, development cooperation has become a key term in a discourse associated with the Global Partnership for Effective Development Cooperation. In this context it encompasses activities that may not be directly related to aid, such as domestic and global policy changes, co-ordination with profit-making and civil society entities, and exchanges between less-developed countries. Despite suggesting a wider range of co-ordinated action, the term is often used synonymously with development aid. Development assistance: is a synonym of development aid often used in international forums such as the UN and the OECD. Official development assistance (ODA) is aid given by OECD-member governments that specifically targets the economic development and welfare of countries with the lowest per capita incomes. It includes humanitarian aid as well as development aid in the strict sense. Aid: is a more general concept which can include humanitarian aid (emergency relief) and other voluntary transfers not specifically aimed at development. Other expressions that relate to aid in general include foreign aid, international aid, and overseas aid.
Types
Bilateral and multilateral official development assistance
Analyses of development aid often focus on Official development assistance (ODA), as ODA is measured systematically and appears to cover most of what people regard as development aid. ODA may be bilateral: given from one country directly to another; or it may be multilateral: given by the donor country to pooled funds administered by an international organisation such as the World Bank or a UN Agency (UNDP, UNICEF, UNAIDS, etc.) which then uses its funds for work in developing countries. To qualify as multilateral, the funding must lose its identity as originating from a particular source. The proportion of multilateral aid in ODA was 28% in 2019.
Trilateral Trilateral development cooperation (also called triangular development cooperation) is a type of development cooperation, wherein OECD DAC member states or multilateral institutions provide development assistance to emergent development actors, with the aim of assisting them in carrying out development projects in other developing countries.United Nations Economic and Social Council (2008), page 8. Trends in South-South and Triangular Development Cooperation. url: http://www.un.org/en/ecosoc/docs/pdfs/south-south_cooperation.pdf.
The purpose of trilateral development cooperation is to combine the strengths of both OECD DAC member states and the new development actors in delivering more effective aid to recipient countries.OECD (2016), page 9. Dispelling the myths of triangular co-operation - Evidence from the 2015 OECD survey on triangular co-operation. url: https://www.oecd.org/dac/dacglobal-relations/OECD_Triangular_co-operation_survey_report_2016.pdf. The OECD DAC member states and multilateral institutions participate in trilateral development cooperation with the aimed goal of increasing aid effectiveness and efficiency, phasing out bilateral aid, transferring good practices, and capacity building.Ashoff, Guido (2010). Triangular Cooperation: Opportunities, risks, and conditions for effectiveness. Tech. rep. January 2010, pp. 22–24. url: https://openknowledge.worldbank.org/server/api/core/bitstreams/8917388a-5ef3-5a1c-9412-6aacae567900/content
Over 2019–2022, the Americas received one third of the global resources provided through triangular co-operation. The second largest recipient region was Africa, followed by Asia-Pacific. Multi-regional projects accounted from approximately one quarter of reported disbursements.OECD (2025) Triangular Co-operation url: https://www.oecd.org/en/topics/sub-issues/development-co-operation-in-practice/triangular-co-operation.html
Non-ODA development aid There are 4 categories of development aid that fall outside ODA, notably: private aid, remittances, aid to less-poor countries and aid from other donor states.
OECD distinguishes between development aid that is governmental ("official") on the one hand, and private (originating from individuals, businesses and the investments of charitable foundations, and channeled through religious organisations and other NGOs) on the other. Official aid may be government-to-government, or it may be channeled through intermediary bodies such as UN agencies, international financial institutions, NGOs or other contractors. NGOs thus commonly handle both official and private aid. Of aid reported to the OECD, about 80% is official and 20% private.
Development aid is not usually understood as including remittances received from migrants working or living in diaspora—even though these form a significant amount of international transfer—as the recipients of remittances are usually individuals and families rather than formal projects and programmes. World Bank estimates for remittance flows to "developing countries" in 2016 totalled $422 billion, which was far greater than total ODA. The exact nature and effects of remittance money remain contested.Are Immigrant Remittance Flows a Source of Capital for Development? - WP/03/189 The International Monetary Fund has reported that private remittances may have a negative impact on economic growth, as they are often used for private consumption of individuals and families, not for economic development of the region or country.
ODA only includes aid to countries which are on the DAC List of ODA Recipients which includes most countries classified by the World Bank as of low and middle income.
Loans from one state to another may be counted as ODA only if their terms are substantially more favourable than market terms. The exact rules for this have varied from time to time. Less-concessional loans therefore would not be counted as ODA but might be considered as including an element of development aid.
Some states provide development aid without reporting to the OECD using standard definitions, categories and systems. Notable examples are China and India. For 2018, the OECD estimated that, while total ODA was about $150 billion, an additional six to seven billion dollars of ODA-like development aid was given by ten other states. (These amounts include aid that is humanitarian in character as well as purely developmental aid.)
Recognizing that ODA does not capture all the expenditures that promote development, the OECD in 2014 started establishing a wider statistical framework called TOSSD (Total Official Support for Sustainable Development) that would count spending on "international public goods". In March 2022, TOSSD was adopted as a data source for indicator 17.3.1 of the SDGs global indicator framework to measure development support. The TOSSD data for 2020 shows more than US$355 billion disbursed to support for sustainable development, from almost 100 provider countries and institutions. The Commitment to Development Index published annually by the Center for Global Development is another attempt to look at broader donor country policies toward the developing world. These types of activity could be formulated and understood as a kind of development aid although commonly they are not.
Output-based aid (OBA)
Extent
Most development aid is counted as part of the official development assistance (ODA) reported by governments to the OECD. The total amount of ODA in 2018 was about $150 billion. For the same year, the OECD estimated that six to seven billion dollars of aid was given by ten other states, including China and India. However, these amounts include aid that is humanitarian in character as well as purely developmental aid. The proportion of development aid within ODA was about 80%.
The OECD classifies ODA development aid by sector, the main sectors being: education, health (including population policies, water supply and sanitation), government & civil society, economic infrastructure (including transport and energy), and production (including agriculture). Additionally, there are "cross-cutting" aims; for instance, environmental protection, gender equality, urban and rural development concerns.
Some governments include military assistance in the notion of foreign aid, although the international community does not usually regard military aid as development aid.
Development aid is widely seen as a major way to meet Sustainable Development Goal 1 (to end poverty in all its forms everywhere) for the developing nations.
Top recipient countries
+ ODA received, total for nine years, 2010-2018 Country US$, billions 37.6 18.1 17.6 17.4 15.8 15.6 14.7 14.3 13.9 13.3
Top donor countries
+ Total ODA disbursed in decade 2010-2019 Country US$, billions 323 188 171 115 107 56 56 47 46 42
The OECD also lists countries by the amount of ODA they give as a percentage of their gross national income. The top 10 DAC countries in 2020 were as follows. Six countries met the longstanding UN target for an ODA/GNI ratio of 0.7% in 2020:
– 1.14% – 1.11% – 1.02% and – 0.73% – 0.7% – 0.59% – 0.53% – 0.48% and – 0.47% , and – 0.31%
European Union countries that are members of the Development Assistance Committee gave 0.42% of GNI (excluding the US$19.4 billion given by EU Institutions).
By type of project
Favourable impacts