The OECD report "Reshaping Decentralised Development Co-operation in Germany" was presented at the "6th OECD Roundtable on Cities and Regions for the SDGs" in Brussels on 20 April 2023. It assesses decentralised development cooperation (DDC) policies, strategies, programmes and financing in Germany, as well as the challenges they face, and provides concrete recommendations on how to increase the effectiveness and impact of DDC policies and programmes.

It is the result of an 18-month policy dialogue with more than 100 stakeholders from all levels of government in Germany. The OECD conducted two surveys: one with the federal states and one with the municipalities. The OECD survey of the federal states, conducted between November 2021 and January 2022, was targeted to the development cooperation focal points in the 16 German federal states. The survey was answered by the departments responsible for development cooperation in the Land ministries of 14 of the 16 federal states, as well as by representatives of the Federal Government (BMZ) and the implementing organisations. A similar survey was extended to the German municipalities and addressed to the respective persons responsible for development cooperation on the ground. This second survey was conducted between April and June 2022.

Since the 1950s, the DDC has become increasingly important within German development cooperation. Compared to other members of the OECD's Development Assistance Committee, German municipalities and regions provide by far the highest Official Development Assistance (ODA) in absolute terms, totalling approximately €1538 million in 2020 followed by Spain with €369 million. Most federal states and municipalities focus their development cooperation on technical cooperation, advisory services and peer-to-peer learning as well as networking, especially in the policy areas of education, environment and health.

Results at the municipal level

At the municipal level, building and promoting networks and peer-to-peer learning are the two most used types of technical assistance for municipal DDC activities. About 75% of municipalities responding to the OECD survey engaged in building and promoting networks in 2018, 2020, or both. Peer-to-peer learning is the second most important type of technical assistance for municipalities' DDC projects. About two-thirds of municipalities used collegial advice in their DDC programs. Roundtables and platforms that bring together actors from different sectors are tools used by municipalities that can improve communication and knowledge sharing, especially during crises and emergencies.

The special role of municipal utilities is also explicitly highlighted: “Municipal companies can support development co-operation activities through the provision of technical expertise. Municipal companies are closely linked to the municipal administration. Depending on their legal form, they may be directly integrated into the organisational structure of a municipal administration, a district or, in the case of city-states, a federal state. The focus of their activities is usually on utilities (water, energy) and waste disposal (wastewater, garbage). A study by the DIE highlighted that 42% of German municipalities active in development co-operation are working together with at least one municipal company, mostly in the field of utilities. To foster the engagement of municipal companies in development co-operation, the BMZ in co-operation with GIZ and SKEW has established the pilot project Utility Platform for Strengthening Partnerships of Municipal Utilities Worldwide. In its pilot phase that is running until 2023, municipal water providers from Germany, Jordan, South Africa, Tanzania, Ukraine and Zambia are working together in pilot partnerships to achieve a more sustainable water supply and wastewater disposal in their respective cities.”

Technology and know-how transfer, which is also central to utility partnerships, plays a similarly important role as peer-to-peer learning: around 60% of municipalities used it as part of their DDC activities in 2018 and/or 2020. Other relevant types of technical assistance that are important for municipalities' DDC activities include, in particular, vocational training, advisory services, organisational development and change management.

Other important policy areas for German municipalities are governance and democracy. Nearly 30 % have been active in the areas of local governance, democracy and decentralisation in the last five years. Around 27 % have focused on social inclusion in their development cooperation activities in both 2018 and 2020. Other relevant areas of municipalities participating in the survey include urban development (20%), health, especially since the outbreak of the COVID 19 pandemic (22% active municipalities under SDC), and economic development, water, gender and culture. In general, it is important to find a common understanding of the objective of an DDC project in order to avoid a mismatch in priorities.

Criticism and recommendations

However, the report also sees weaknesses in the German DDC system: most of the states would coordinate their policies with the federal government through the Federal States Programme (BLP). However, there is hardly any policy coordination between the states and the municipalities. This could lead to scattered small projects, unused synergy potential in the partner countries and duplication of work. In addition, the DDC still has room for improvement, especially at the country level.

Furthermore, there is no uniform definition of decentralised development cooperation and insufficient data for impact monitoring. Appropriate evidence of impact could increase the overall attractiveness of DDC. Another point of criticism was the bureaucratic hurdles associated with financial support, which is often limited to one financial year.

The resulting policy recommendations are therefore in brief:

• Strengthening cooperation between federal states and municipalities on DDC.
• Strengthen DDC at the state level by promoting more direct cooperation with local and regional governments in partner countries.
• Clarify the definition and boundaries of DDC in Germany to promote action and strengthen existing DDC guidelines.
• Enhance policy dialogue on the results and mutual benefits of cross-border DDC projects for federal states, municipalities and implementing organisations.
• Establish a more flexible framework to expand co-financing of DDC projects and address the challenge of one-year funding agreements.
• Simplify the bureaucratic and application procedures for funding programmes and strengthen the capacity of staff to manage development assistance at the municipal level.
• Develop a harmonised approach to monitoring and evaluating DDC results in all countries and municipalities.

Despite all the criticism in detail, however, the effectiveness of DDC is not called into question; on the contrary, its potential for implementing the 2030 Agenda is highlighted and further expansion is recommended.

To the study: OECD: Reshaping Decentralised Development Co-operation in Germany