Official Flows: basic principles for transparent measurement and reporting by providers
Increasing transparency of reporting by the providers of cross border official finance (‘official flows’) can help increase the accountability of those providers to their citizens and those recipients to whom they have made promises. However, it should not be a substitute, nor detract from efforts to improve collection of information by recipients through their systems of national accounts. Classifying provider flows by purpose can help to improve this accountability, and three main provider purposes can be identified: commercial; foreign policy; and development.
In order to improve the transparency of official flows, this paper sets out ten basic principles that should be observed by all providers. These principles include: counting official costs only (ensuring flows measured as ‘official flows’ do in fact come from official sources, not eg. subsidised private sources); counting disbursements rather than commitments; counting net flows over the lifetime of a project, ie. accounting for return flows such as repayment on loans or income earned from the initial investment; and ensuring that flows with dual purposes including commercial or foreign policy objectives are not categorized as developmental.
These principles should form the basis for efforts by international organisations to standardise reporting and information collection from providers.
Read the discussion paper here