Data Snapshot: How Do Donors Support Citizen Engagement in Tax Policy?

Written by Andrew Wainer, Director, Policy Research

This summer’s Addis Tax Initiative (ATI) conference in Berlin demonstrated that the ATI is increasingly open to civil society participation. It was a forum where donors and revenue authorities discussed how to better harness tax for development, but local and global NGOs also asserted the importance of accountability and equity in tax policy and administration.

The elevated voice of civil society on tax follows an increase in donor domestic resource mobilization (DRM) assistance to civil society, according to our analysis of OECD data[i].  For example, among ATI donors, the percentage of DRM assistance to civil society rose from 4% ($6 million) in 2015 to 10% ($21 million) in 2017 – an increase of 252%, the largest increase of any category of assistance (see Table 1).

Table 1: Percent Change DRM Disbursements Channel, 2015 to 2017

Channel Change (%)
Public Sector -20
NGOs & Civil Society 252
Public-Private Partnerships (PPP) 186
Multilateral Organizations 42
Teaching Institutions, Research Institutions, Think-Tanks 61
Private Sector Institutions 77*
Other -86

 * OECD CRS values reported only for years 2016 and 2017. Percent change calculated from these two years.

Nevertheless, donor investment in civil society on tax issues remains small within the bigger picture of DRM funding.  And even as the role of civil society in tax policy and administration increases, much more needs to be learned about the impacts of civil society participation

Norway Provides Half Its DRM Assistance to Civil Society
Analysis of the OECD’s Creditor Reporting System data reveals that, for 2017, the top five ATI DRM donors to civil society (by amount of US dollars) provided 95% of total DRM assistance to civil society among all ATI donors (see Table 2 below).

The UK provided the largest amount of funding for civil society – $9 million, or about a quarter of its total $37 million DRM budget for 2017. And the US – while providing the largest total amount of DRM assistance – provided the second largest amount to civil society – $5 million. But Norway is particularly notable for providing fully half of its total DRM budget to civil society – a far larger percentage than any of the other top 5 donors.

Table 2: Top 5 ATI Donors Providing DRM Assistance Channeled Through Civil Society, 2017

ATI Donor Country DRM Assistance to Civil Society (millions of USD)* Total DRM Assistance (millions of USD)* % of Total DRM Assistance Channeled through Civil Society
United Kingdom 9 37 24
United States 5 49 10
Norway 4 8 50
Denmark 1 5 20
EU Institutions 1 14 4

*USD Figures are rounded to the nearest million

 

Assistance Split Between Local and International NGOs
ATI assistance to civil society is clustered among five major donors, but what type of civil society organizations receive this assistance?

As Table 3 demonstrates, it’s split: In 2017, 40% of all ATI DRM assistance to civil society went to developing country-based NGOs, defined as: “An NGO organized at the national level, based and operated in a developing [country].”

While developing country NGOs received a substantial minority of the assistance, the same amount was disbursed to NGOs based in donor countries. These are defined as national-level NGOs based and operated in donor counties. Such organizations would include, for example, Oxfam America and Save the Children USA.

 Finally, almost 20% of this assistance to civil society was delivered to international NGOs, defined as, “an NGO organized on the international level. Some INGOs may act as umbrella organisations with affiliations in several donor and/or recipient countries.” Examples in this category include Doctors Without Borders and the Society for International Development.

Table 3: DRM Civil Society Assistance Delivery Channel, 2017

Delivery Channel Amount (millions of USD)* % of Civil Society DRM Assistance Received Through this Channel
International NGOs 4 19
Donor-county based NGOs 9 40
Developing-country based NGOs 9 40

*USD figures are rounded to the nearest million

 

Africa Receives More Than Half of All DRM Assistance to Civil Society
What part of the world is this donor assistance going to? In 2017, more than half ($11 million) went to Africa (See Table 4). Western Hemisphere nations were the second largest recipients – receiving almost a quarter ($5 million) of all ATI DRM civil society assistance. Asia, Europe, and  Oceana received very small percentages of this type of assistance totaling a combined 6% of all assistance to civil for tax work.

Table 4: DRM Civil Society Assistance to Recipient Regions, 2017

Recipient Region Amount (millions of USD)* % of Civil Society DRM Assistance Received by Region
Africa 11 53
Americas 5 23
Developing Countries, Unspecified 4 18
Europe 1 4
Asia <1 2
Oceania <1 0

 

How is DRM Assistance to Civil Society Used?
As Table 5 demonstrates, almost half of all assistance is directed toward capacity building. Tax advocacy is a complex and contested space, so civil society organizations often need help building the capacity to credibly engage on fiscal issues – particularly at the national level – so this large allocation makes sense. 

Table 5: Civil Society Uses for DRM Assistance, 2017

Function Amount (millions of USD)* % of Total Civil Society ATI DRM Assistance Spent on Function
Transparency 3 14
Technical Assistance and Support 2 10
Research 1 5
Capacity Building 9 43
Other 1 5
Unspecified 5 24

*USD Figures are rounded to the nearest million

 

Taxation and Gender Equity
Ensuring that tax policy and administration is gender-responsive is also an important component of ensuring tax equity. The OECD “tags” foreign assistance for gender equality by assigning activities as ones where gender equality is a “principal objective”, a “significant objective”, or where gender equality is not an objective. As illustrated in Table 6, according to the OECD data, only 13% of civil society DRM assistance in 2017 contained a gender equality component – activities where gender equality were either a principal or significant objective.

Table 6: Support for Gender Equality and Women’s Empowerment for Tax, 2017

DAC Gender Marker Score Amount (millions of USD)* % of Total Civil Society ATI DRM Assistance Dedicated to Gender Equality
(Gender is the principal objective) 0.6 3%
(Gender is a significant objective) 2 10%
Total:   13%

*USD Figures are rounded to the nearest million

 

Based on this analysis of the OECD data, we have a clearer – but still incomplete – picture of how ATI’s increasing DRM assistance to civil society is being used. We have little understanding of the impact of these funds.   

We need to continue to assess the impact of civil society in making tax policy and administration more accountable, participatory, and transparent. Data is key – donors and the OECD must ensure that data on donor assistance to civil society for DRM is reported and labeled accurately and that data is disaggregated, especially by age and sex. The analysis in this blog is a first step to outline the trends and contours of donor assistance for civil society engaging in DRM.  

As the Addis Tax Initiative develops its vision for 2020 and beyond, Save the Children continues to emphasize the role of local citizens in shaping tax policy and administration.  

In coming years, we hope that donor agencies will improve investments in country-based NGOs to strengthen local self-reliance, promote fairer tax allocations, and finance pro-development public expenditure. 

[i] Because the OECD continually updates the historical data in the CRS and these analysis were carried out over a period of months, calculations may vary. Like all large datasets, the CRS may also contain labeling and reporting errors that impact accuracy. Our analysis is based on an analysis of the OECD data as presented.