This policy paper addresses the current debates on the Official Development Assistance (ODA) definition highlighting he current measure of intent in ODA reporting is too broad and allows for flows with questionable relevance to its core objectives – development and poverty eradication and calls for any reform of ODA to pass the test of development effectiveness.

ODA resources captured in quantity reporting should complement and enhance development effectiveness. In addition, new reporting measurements should not undermine the effectiveness of ODA. Lastly, donors should turn political will into action so as to implement and integrate into their development agenda the agreements endorsed at successive conferences on development effectiveness.
Key messages:
Aid has a unique role to play in the fight against poverty and inequality that cannot be replaced by other sources of finance and therefore any reform of ODA must ensure that:
1. The central objectives of ODA continue to be development and poverty eradication.
2. Any reform of the ODA definition is in line with development effectiveness principles. In particular, ODA flows must be transparent and accountable, strengthen democratic ownership, and focus on development results.
3. ODA reporting only counts the net flows in terms of actual disbursements.
4. ODA reflects genuine flows rather than inflated elements such as imputed student costs, in-donor refugee costs, debt relief, tied aid and the interest payments on loans.
5. Concessional loans reported as ODA should reflect accurately both the effort of the donor and the cost to the recipient. Resources reported as ODA should not undermine recipient countries debt sustainability.
6. Climate finance, and finance for global public goods, which are crucial for ending extreme poverty and tackling inequality, should be new and additional to ODA.