Over the last decade, Official Development Assistance (ODA) experienced a hidden transformation. Since the late 1990s, traditional multilateral aid has been on the decline while
non-core multilateral aid has been rising steadily.

Non-core multilateral aid, which includes trust
funds, global programs, and joint programming, enjoys considerable popularity among bilateral donors: it allows them to earmark their contributions for specific development objectives, which provides them with more influence on aid allocation and makes ODA more visible to their national constituencies.

However, non-core multilateral aid may pose
severe risks for aid effectiveness.

It may replace the core contributions to multilateral aid institutions (MAIs), complicate the budgeting of these organisations, inflate administrative costs and governance structures due to additional reporting, relinquish the expert knowledge of experienced MAI staff, and attract their attention for shopping for funds.

From the perspective of recipients, non-core multilateral aid undermines developing country ownership and tends to make aid flows less predictable. The rise of non-core multilateral aid
may threaten aid effectiveness through an increased fragmentation and proliferation of funds. This would contradict the international commitments laid down in the Paris Declaration and the Accra Agenda for Action.

The rise of non-core multilateral aid over the last years hence constitutes a research puzzle that needs to be addressed. Clarifying the concept of non-core multilateral aid and exploring recent trends, the project seeks to identify the motivations of the key actors from MAIs and bilateral donor ministries, as well as to assess the consequences with respect to aid effectiveness.

It will be the first systematic and comprehensive analysis of the new multilateral financing mechanisms. The results should help raise awareness among both international organisations and bilateral donors, of the associated problems
and opportunities and help MAIs to take a strategic approach towards these contributions.