Concept of Public Development Aid
Public Development Aid (PDA) consists of assistance provided by public bodies to developing countries, seeking to promote development and human rights indicators in the country of destination.
These bodies may either be national governments, nongovernmental organizations or international and intergovernmental institutions. Official Development Assistance can be channelled bilaterally – when it comes to direct aid to a program or a country – or multilaterally – when it comes to contributions to budgets of international organizations, such as the United Nations United Nations (UN).
This concept has become central in measuring and assessing the contribution that more developed countries make to supporting the efforts of developing countries to improve their economic and social conditions.
Formation and origin of Public Development Aid
Public development aid was the product of post-World War II and international order that was created with independence in Asia and Africa, the main rules of the concept of Official Development Assistance were defined in the late 1960s, after the establishment of the Development Assistance Committee (DAC) by the Organization for Economic Co-operation and Development (OECD) in 1961.
Over the decades, commitments have been made to increase Official Development Assistance (ODA), the main goal of which is to give each donor 0.7% of GNI in Official Development Assistance (ODA). Although this commitment dates back to the 1970s, only in the 2000s, with the adoption of the Millennium Development Goals (MDGs) and the signing of the Monterrey Consensus in 2002, has the goal been recognized within the main international organizations and assumed by most donors.
Types of transactions considering Public Development Aid
According to the Development Assistance Committee, public development aid is the «pool of resources – whether credits, donations or capital transactions – made available by so-called Donor Countries or International Organizations to Developing Countries and Territories through public bodies at a local level , central or agencies, with the aim of promoting the development of these countries».
Among the criteria for its definition are (i) the requirement that these flows contribute to the economic development and well-being of the recipient countries; (ii) which are effectively earmarked for developing countries (SDCs) on the list drawn up by the Development Assistance Committee; and that (iii) this transfer of resources is made by means of a donation or concessional loans, having a donation element of at least 25%.
The concept of Official Development Assistance covers only funds channeled by the public sector, either bilaterally (directly to the beneficiary country) or multilateral (via international organizations), thus not encompassing the full range of other flows making up aid to global development, such as private flows or donations through Non-Governmental Organizations (NGOs).
Public Development Aid also includes the administrative costs of donor agencies (since 1979), as scholarships (since 1984), or costs of the donor country with refugees in its territory during the first year (since 1991). The inclusion of such costs, as well as debt rescheduling and forgiveness operations, or even pensions paid to former colonial officials, has been criticized for being an influx of Public Development Aid statistics and not being reflected in actual transfer resources for developing countries.
In the early 1990s, it was also accepted to include some limited cost types with global issues such as environment, peacekeeping and narcotics control.
One of the most recent updates is the accounting as public development aid of 6% of the multilateral contributions of Development Assistance Committee members to United Nations peace missions.
