Analysis of the Multilateral Engagement of German Development Cooperation
Multilateral development cooperation (DC) is essential for achieving the Sustainable Development Goals (SDGs). In this sense, the Federal Ministry for Economic Cooperation and Development (BMZ) strives for strong multilateral development cooperation. However, systematic evidence gaps exist, which is why DEval is evaluating the BMZ's multilateral engagement.
Multilateral development cooperation (DC) accounts for a significant proportion of the BMZ's commitment, at just under 30 per cent of all expenditure. Multilateral DC is implemented by multilateral organisations such as the World Bank, other United Nations (UN) organisations (e.g. UNDP, WFP) and regional development banks. The various funding modalities – core funding and earmarked contributions are of central importance.
The DEval evaluation analyses the BMZ's multilateral engagement, paying particular attention to these financing modalities:
- To what extent is the multilateral portfolio aligned with the BMZ's strategic priorities (relevance)?
- To what extent are bilateral and multilateral development co-operation interlinked (coherence)? What factors facilitate or hinder this interplay?
- Are the financing modalities used efficiently (efficiency)?
In addition, the current state of research on the effectiveness of core funding and earmarked contributions will be analysed.
Results and Recommendations
- The portfolio analysis demonstrates that the relative share of core funding to multilateral organizations declined from 2011 to 2022, while at the same time earmarked contributions increased in both absolute and relative terms.
-
Contributions with particularly tight earmarking (e.g., for a specific project) have disadvantages in that they involve high transaction costs and restrict the ability of multilateral organizations to act. Adequate core funding is essential to ensure that multilateral organizations can fulfill their mandates.
→ DEval recommends that the BMZ (further) reduce tight earmarking.
→ DEval recommends that the BMZ work towards stable core funding, especially for UN organisations. - With regard to the interplay of bilateral and earmarked commitments, the analysis shows that earmarked commitments strengthen the bilateral portfolio geographically.
-
However, BMZ's earmarked contributions are neither reinforcing nor complementary at the thematic level. Overall, it is not sufficiently clear at the portfolio level what strategic role the earmarked portfolio should play in relation to the bilateral portfolio.
→ DEval recommends that the BMZ define the strategic role of the earmarked portfolio in relation to the bilateral portfolio. - The BMZ's earmarked contributions are largely complementary to the disbursements of multilateral organisations, but should be geared towards strengthening their capacity to act in accordance with their mandates by playing a reinforcing role.
-
→ DEval recommends that the BMZ align its earmarked contributions more closely with the thematic portfolio of multilateral organisations.
- Interlinking bilateral and multilateral development cooperation is an ongoing strategic goal of the BMZ, but one that is challenging to implement. Various obstacles, such as a lack of information, stand in the way of this interlinkage, despite the willingness of the parties involved.
-
→ DEval recommends that the BMZ and the implementing organizations GIZ and KfW Development Bank identify barriers to bi-multi interplay and gradually reduce them.
Background
Multilateral cooperation is essential to tackle the current major global challenges. In order to achieve the SDGs and protect global public goods, the international community needs to work together. In DC, effective, efficient, and coordinated cooperation at the multilateral level is central in addition to bilateral cooperation.
In this sense, the BMZ formulated the goal of strong multilateral cooperation in its strategy on multilateral development policy published in 2023. One of the key objectives is to make the development policy system more effective; other objectives include interlinking bilateral and multilateral development cooperation and agenda setting at the multilateral level.
Multilateral development cooperation accounts for a significant proportion of the BMZ's commitment, with just under 30 per cent of funds. If earmarked funds are included, the share is as high as 56 per cent.TheBMZ cooperates with many multilateral organisations, such as the UN or the World Bank Group, which are considered important multilateral actors.
Objectives
The overarching aim of the evaluation is to address evidence gaps in multilateral development cooperation and to provide key findings for the implementation of the latest multilateral BMZ strategy of 2023. The evaluation is DEval's first comprehensive analysis of the BMZ's multilateral engagement. Evaluation purposes are transparency, accountability, and learning. Transparency and accountability relate to a structured and systematic analysis of the multilateral portfolio of German development cooperation. Learning is to be facilitated primarily by findings on interplay and the effectiveness of (un)tied funds.
Methods
The evaluation design consists of three components: A portfolio analysis, a literature review and a case study.
- Portfolio analysis:
- Descriptive statistics on the allocation of funds for multilateral engagement
- Strategy assessment: comparison of strategic priorities with empirical evidence
- Portfolio similarity analysis: similarity between the BMZ's bilateral and multilateral portfolio
- Systematic review: structured overview of the current literature and international scientific evidence on the effectiveness of core funding and earmarked contributions
- Case study: qualitative content analysis of documents and interviews
Contact
Dr Angela Heucher
Phone: +49 (0)228 336907-938
E-mail: angela.heucher@DEval.org
Amélie Gräfin zu Eulenburg
Phone: +49 (0)228 336907-930
E-mail: amelie.eulenburg@DEval.org
Related Documents
Publications
- Policy Brief: The BMZ's Multilateral Engagement: Financing and Interplay
- Policy Brief: Das multilaterale Engagement des BMZ: Finanzierung und Verzahnung
- The BMZ's Multilateral Engagement. Financing and Interplay
- The Effectiveness of Core and Earmarked Funding in Multilateral Development Cooperation – Systematic Review
- Das multilaterale Engagement des BMZ. Finanzierung und Verzahnung