New OECD report: Multilateral Development Finance 2026

“The OECD recently announced a historic decline in official development assistance (ODA) in 2025, marking the sharpest drop in foreign aid by members of the Development Assistance Committee (DAC) ever. Beyond its immediate impact on bilateral aid programmes, this contraction will reverberate across the multilateral development system with more than 200 organisations, including the United Nations agencies, which deliver essential development and humanitarian support worldwide, often in the most fragile and vulnerable contexts.

The new OECD report Multilateral Development Finance 2026 examines how the system is evolving under mounting financial and geopolitical pressure and what this means for the world’s ability to respond collectively to current and future challenges.

Key findings include:

• The multilateral development system has reached a turning point. After two decades of steady growth in government contributions, major donors are beginning to pull back. Multilateral contributions from OECD DAC members fell by around 15% in 2024, marking a decisive break with past trends. Further cuts are expected through at least 2027, reflecting structural reductions in ODA among major providers rather than short-term volatility.
• Funding cuts are exposing deep structural vulnerabilities. Cuts by a limited group of countries have disproportionate effects on a system that relies heavily on a small number of donors. Some organisations are particularly exposed, especially parts of the United Nations Development System (UNDS) that depend largely on grant funding from member states, including humanitarian agencies. The 11 DAC countries that have announced ODA cuts in 2025 account for 73% of contributions to the World Food Programme (WFP), which has warned that millions of people could lose access to emergency food assistance.
• Headline growth in multilateral spending masks growing strain. Total multilateral outflows reached a record USD 296 billion in 2024, driven mainly by expanded lending by multilateral development banks and exceptional support to Ukraine from European Union institutions. But this growth conceals significant pressure elsewhere: activities across the UN Development System declined by 16% between 2022 and 2024, signalling a contraction in grant-based development and humanitarian delivery.
• Aid cuts risk cascading effects—hitting the most vulnerable hardest. Beyond their direct impact, funding reductions create systemic risks in an interconnected multilateral system. Several UN entities already affected by cuts play critical roles in global delivery chains, including UNICEF, UNHCR and UN Women. Low-income, fragile and crisis affected countries are likely to bear the heaviest burden, as they rely most on concessional resources from these institutions.
• Reform and financing choices made now will determine future capacity. Ongoing reform efforts offer an opportunity to strengthen the effectiveness of the multilateral development system but only if they are backed by strategic funding decisions. Protecting core resources, managing reductions deliberately, safeguarding concessional finance for the poorest countries and refocusing mandates around comparative advantage will be essential to preserve the system’s global reach, scale, and specialised expertise”.

Yumico Sugaya, OECD Media.

Download the report, explore the data by donor, and learn more about OECD work on Multilateral Development Finance.