Results – Periodic review Multilateral Cooperation

The core of Dutch policy efforts was to exploit the benefits of multilateral cooperation through regional development banks and UN organisations to achieve the objectives.

The research team found that the supported organisations offered several benefits and made a significant contribution to eradicating extreme poverty, addressing the root causes of poverty, strengthening a resilient global economy, and advancing climate mitigation.

The UN organisations and regional development banks complemented each other well in this respect:

• With their neutrality, expertise and crisis preparedness, UN organisations made a major contribution to emergency aid and structural solutions on themes such as health, education, and good governance.
• At the same time, development banks were able to implement large-scale projects due to their financing model and their regional legitimacy, especially in green energy supply and infrastructure - in areas such as regional integration (international connecting roads), energy (electricity transport), water (civil works) and agricultural development (rural roads).

These included the areas of climate adaptation and migration, partly due to the lack of a mandate and a lack of expertise on these themes.

The regional development banks were only partially effective in promoting good governance and private sector development, while the UN agencies were less effective in economic areas, for example. However, it should be noted that it was not always possible to make a robust assessment of effectiveness, which was dependent on the quality and quantity of available evaluations.

Key benefits of multilateral cooperation include economies of scale and lower administrative costs, for example, because the Netherlands does not need to be actively involved in the implementation and supervision of projects.

Multilateral organisations were also able to set up large programmes, which kept the implementation costs per euro spent relatively low. The support for multilateral organisations also indirectly contributed to creating earning opportunities for Dutch businesses.

Nevertheless, the synthesis study also identified some vulnerabilities that could undermine efficiency in the long term, particularly in the area of financial stability.

For development banks, unearmarked (multi-year) funding made it possible to mobilise a multitude of private funds, thereby strengthening their economies of scale. For UN organisations, the funding provided an opportunity to build a permanent regional and country presence, and expand their networks, allowing them to act quickly in case of crisis. The financial contributions also made it possible to implement important reforms with the aim of making the organisations more effective and efficient.

Finally, during the COVID-19 crisis, unearmarked contributions proved to offer the necessary flexibility to enhance health related interventions. However, this did create a risk of fragmentation, i.e. a possible unnecessary broadening of activities to areas outside the organisations’ core mandate.

In sectors where both development banks and UN organisations were active and were delivering results, they were largely complementary and overlap was avoided. The multilateral organisations were also thematically complementary to other BHOS instruments.

Finally, because of their broad geographical mandate, the organisations also achieved results outside the ‘focus countries’ of Dutch bilateral aid. This was in line with the Dutch policy commitment to deploy multilateral organisations for this very purpose.

This can be done by systematically assessing which BHOS goals can be better achieved through other budget articles and organisations. This should also be linked to an overview of comparative advantages per organisation and the results should be anchored in the Policy Coherence for Development Action Plan and the policy framework ‘Global Multilateralism’

This can be done by closely monitoring expansions to the organisation's track record, possible overlap with other multilateral organisations, and alignment with BHOS priorities. Encourage co-financing as an alternative to mandate broadening, so that economies of scale are maintained without loss of focus. The Netherlands can do this by actively forging coalitions within executive boards and working groups with countries that pursue similar priorities.

Through working groups and executive boards, the Dutch representation can encourage the organisations concerned to make more targeted use of instruments for strengthening good governance that are in line with their core mandate. These include, for example, sector-specific support, stricter conditionality, technical assistance, and capacity building. It is advisable to work in broad coalitions within working groups and executive boards, in which regional member countries are also involved, so that organisations retain their legitimacy.

In addition, there is a need for follow-up research in the field of good governance, as meta-evaluations of the organisations still provide limited insights into the optimal mix of instruments and themes.

Encourage them to carry out thematic meta-evaluations and impact studies more frequently and more systematically, explicitly distinguishing between results in vulnerable and middle-income countries, and including side effects.

In addition, ensure that results are presented in a comparable and accessible way to improve the results measurement of the organisations.

During the evaluation period, the Netherlands committed its contributions to UN organisations on a multi-annual basis, in contrast to many other donors who usually only pledged year on year. Actively put this theme on the agenda in the WEOG working group and work together with like-minded donors in the UN Funding Compact, so that agreements are also sustainably secured in other member states.

In doing so, emphasise the promotion of financial stability and transparency. This is relevant for the Netherlands as one of the few creditworthy donors and guarantors, precisely because there is a risk that the Netherlands will be called upon more often if these problems are not resolved.

Use findings from MOPAN reports and scorecards to systematically put these weaknesses on the agendas of board meetings and policy discussions.

This can be done by systematically publishing information on the revenues achieved by Dutch companies through assignments and projects commissioned by multilateral organisations. Make this transparent in scorecards and reports, and link it to concrete examples of how the Netherlands exerts influence within these organisations.

In addition, map out the coherence between bilateral and multilateral cooperation more systematically, by explicitly including multilateral efforts in the Policy Coherence for Development Action Plan.