Italy
At a glance
Funding trends
- Italy is the tenth-largest Organisation for Economic Cooperation and Development (OECD) Development Assistance Committee (DAC) donor, spending US$4.2 billion (in current prices; US$4.1 billion in constant 2019 prices) on official development assistance (ODA) in 2020.
- Italy’s ODA decreased by 31% from 2017 to 2020, largely due to a decrease in the costs associated with hosting refugees. However, bilateral funding also declined in some sectors.
- Italy’s government previously committed to gradually increasing ODA to 0.7% of its gross national income (GNI) with an intermediate goal of reaching 0.33% in 2019. However, Italy’s ODA has steadily decreased since 2017, setting Italy’s ODA to GNI ratio back to 0.22% in 2019 and 2020.
Strategic priorities
- Italy’s current three-year ‘Programming and Policy Planning Document’ sets out the strategic focus of development cooperation for 2019-2021. The document confirms Italy’s focus on the African continent, mitigating the root causes of migration and displacement, and the sectors of health, education, agriculture, food security, nutrition, and environmental protection.
- Italy is a strong supporter of multilateralism and health multilaterals in particular. In recent years, Italy has increased its contributions to health multilaterals such as Gavi, the Vaccine Alliance (Gavi), and the Global Fund to Fight AIDS, Tuberculosis and Malaria.
- Italy is a strong supporter of the Access to COVID-19 Tools Accelerator (ACT-A) with contributions to Gavi’s COVAX Advanced Market Commitment (AMC) as well as to the Coalition for Epidemic Preparedness Innovations (CEPI).
Outlook
- Despite a prior commitment to increase ODA to 0.4% of GNI in 2021 and 0.7% by 2030, projections by Openpolis suggest that Italy's ODA to GNI ratio will only reach 0.24% in 2021 and decline thereafter to 0.22% in 2022 and 0.21% in 2023.
- Italy's Parliament voted to approve a budget for 2022 - 2026, which guarantees an increasing ODA trajectory from US$6.0 billion in 2021 to US$7.4 billion in 2026.
- Draghi is prioritizing ending the COVID-19 pandemic, improving economies, and building back better in both domestic and international agendas.
- Italy organized the Global Health Summit (GHS) with the EU in 2021, exhibiting leadership with COVAX contributions. Italy also made its first pledge to the Coalition for Epidemic Preparedness Innovations (CEPI) in 2021.
- Under Italian leadership, G20 countries pledged to return US$100 billion in Special Drawing Rights (SDRs) to vulnerable countries. Italy and other G20 countries allocated 20% of their SDRs to vulnerable countries.
- Italy maintains a crucial role in food security and climate change. Italy co-hosted COP26 and the pre-UN Food Systems Summit meeting in 2021. Italy pledged to triple its contribution to fighting climate change by US$1.4 billion per year for the next five years at COP26.
ODA Trends
Italy's Parliament voted to approve a budget for 2022 - 2026 which includes an increase in the international cooperation budget by €99 million (US$113 million) for 2022, €199 million (US$227 million) for 2023, €249 million (US$ 284million) for 2024, €299 million (US$341 million) for 2025, and €349 million (US$398 million) per year starting from 2026.
NGOs are optimistic about the increased international cooperation budget for the next five years. AOI e CINI announced that the members of 'Campaign 070' will present a bill to Parliament in 2022 to integrate the ambitious goal of reaching a 0.5% official development assistance (ODA) / gross national income (GNI) target in 2027 and a 0.7% ODA/GNI target in 2030.
AOI e CINI noted that the 2022 budget will allow Italian ODA to count towards hosting refugees and asylum seekers in their first 12 months in Italy. The unspent part of these funds intended for the reception of refugees and asylum seekers will be redirected from the Ministry of Interior to the Ministry of Foreign Affairs and International Cooperation.
Italy’s ODA decreased significantly since 2017, largely due to a reduction in in-country refugee costs. In 2020, Italy spent a total of US$4.2 billion (current prices; US$4.1 billion in constant 2019 prices) on official development assistance (ODA), making it the tenth-largest donor country among members of the Organisation for Economic Co-operation and Development’s (OECD) Development Assistance Committee (DAC). In 2020, Italy’s ODA only represented 0.22% of the country’s gross national income (GNI), putting it below the UN target of 0.7% and the DAC average of 0.32%.
Following sharp decreases between 2008 and 2012 resulting from the economic crisis, Italy’s ODA steadily increased, reaching a peak of US$5.9 billion in 2017 (or 0.3% of GNI). In 2018, ODA growth was reversed for the first time since 2012. Since 2017 ODA fell by 31% through 2020. The drop set back the overall ratio of ODA to GNI from 0.3% in 2017 to 0.22% in both 2019 and 2020. In its ‘2018 Update to the Economic and Financial Document’, Italy committed to gradually increasing its ODA to GNI ratio to 0.36% in 2020, to 0.4% in 2021, and 0.7% by 2030; a target Italy has yet to approach meeting. Since 2019, the ‘Economic and Financial Documents’ no longer mention such targets.
For 2021, Italy budgeted €5.4 billion (US$6.0 billion) for ODA, which constitutes a 13% increase compared with 2020. The Italian Think Tank Openpolis and the international NGO Oxfam note that Italy’s ODA projections were significantly overestimated compared with the official OECD figures in previous years, largely due to an over-estimation in the ODA-eligibility regarding spending on the hosting of refugees channeled through the Ministry of the Interior. In 2019, only €397 million (US$444 million) of the €1.7 billion (US$1.9 billion) declared as ODA-eligible in the 2019 budget for the Ministry of the Interior was counted as ODA by the OECD. Though the previous years’ over-estimation of ODA eligibility in Italy’s budget law will likely be repeated and the IMF predicts a slight recovery of 4.2% in GDP growth for Italy in 2021, this budget increase in 2021 may ultimately boost the ODA to GNI ratio to 0.24%. Beyond 2021, ODA is projected to decrease to US$5.9 billion in 2022 and US$5.8 billion in 2023, according to the 2021 budget law. This would translate into an ODA to GNI ratio of 0.22% in 2022 and 0.21% in 2023 according to Think Tank Openpolis and Oxfam.
Due to its geographic location, Italy is the first port-of-call for many refugees reaching Europe by sea. As a result, ODA-reportable costs of hosting refugees in Italy rose significantly within the last decade: In 2012, Italy spent only US$229 million (9% of total ODA) on in-country refugees. In 2017 that number reached US$1.8 billion (31% of total ODA). Starting in 2018, refugee costs began to decrease for the first time since 2012, falling to US$1.1 billion (22%) in 2018 and US$445 million (10%) in 2019. This decrease was the primary driver of Italy’s overall ODA decline, however, even excluding refugee costs, Italy’s ODA decreased by 4% (from US$4.1 billion to US$3.9 billion) between 2017 and 2019.
Unless otherwise indicated, all data in this section is based on the grant-equivalent measurement system. For more information, see our Donor Tracker Codebook.
Policy Priorities
Italy focuses on tackling root causes of migration, particularly on the African continent
Italy’s strategic priorities for development cooperation are spelled out in the three-year ‘Programming and Policy Document and Directions for Italian Development Cooperation’ (‘Documento Triennale di Programmazione e di Indirizzo'), developed by the Ministry of Foreign Affairs and International Cooperation (MAECI). The most recent document for 2019-2021 confirms Italy’s focus on the African continent and on mitigating the root causes of migration and displacement as well as health, education, agriculture, food security, nutrition, and environmental protection. The priority intervention areas center around five strategic pillars, of which three pillars (people, planet, and prosperity) overlap with the global framework of Italy’s G20 presidency:
- ‘People — human development and dignity’, which includes food security; sustainable agriculture; health; education; cultural and natural heritage; promoting sustainable tourism; social, economic, and political inclusion; and migration
- ‘Planet — protection of the environment, management of natural resources and the fight against climate change’, which also includes ensuring access to reliable and sustainable energy
- ‘Prosperity — inclusive and sustainable economic growth and decent work’
- ‘Peace — peaceful and inclusive societies, democracy, effective and responsible institutions, rule of law and human rights for all’
- ‘Partnerships for sustainable development’, supporting the mobilization of domestic resources; debt relief and restructuring; promoting triangular cooperation and public-private partnerships; engaging civil society actors; and strengthening statistical skills.
Italy’s development priorities
- Migration: Tackling root causes of displacement, particularly on the African continent, is a key priority of Italy’s development assistance. The latest strategic guidelines outline Ivory Coast, Eritrea, Ghana and Nigeria as priority countries.
- Health: Italy has recently shown leadership in the health sector and increased its contributions to health multilaterals such as Gavi, the Vaccine Alliance, the Global Fund to Fight AIDS, Tuberculosis and Malaria, and the Coalition for Epidemic Preparedness Innovations (CEPI). It further co-convened the Coronavirus Global Response Conference in May 2020, put Global Health on top of its G20 agenda and co-hosts the G20 Global Health Summit in May 2021.
The Italian Agency for Development Cooperation (AICS), which manages Italy’s bilateral development cooperation, focuses development cooperation in five thematic areas:
- Economic development and opportunities;
- Human development (including health and education, gender equality and disabilities);
- Environment and use of natural resources;
- Rural development and food security; and,
- Conflict-affected and fragile states.
Due to Italy’s geographic location as the first port-of-call for many refugees entering Europe, the country’s development priorities include a strong emphasis on tackling the root causes of migration, particularly on the African continent. Former Italian Prime Minister, Giuseppe Conte, has called for greater European cooperation and investment to address the ‘mass migration crisis’ and to reduce migrant deaths in the Mediterranean Sea. Nonetheless, Italy has so far not adopted the Global Compact on Migration, an intergovernmentally negotiated agreement that lays out objectives to facilitate legal migration prepared by the UN.
Food security is another priority for Italy in light of the COVID-19 crisis; Italy is now promoting the ‘One Health’ approach, which puts forth that human and animal health are interdependent and linked to the health of entire ecosystems.
ODA Breakdown
Italy traditionally disburses most of its ODA multilaterally
On average Italy directed 62% of its official development assistance (ODA) to multilateral institutions between 2010 and 2019; however, between 2012 and 2017 Italy’s share of bilateral contributions increased due to the high costs associated with hosting refugees. While this had brought Italy’s bilateral and multilateral contributions more in line, the trend has reverted to greater multilateral spending in recent years; in 2019, Italy channeled 68% of its ODA multilaterally, well above the average of all members of the Organisation for Economic Development and Cooperation (OECD) Development Assistance Committee (DAC) of 41%.
Bilateral contributions significantly decreased in 2018 and 2019; education is the largest sector of bilateral spending abroad
Italy’s bilateral contributions increased by 382% between 2012 and 2017, reaching a peak of US$3.2 billion in 2017 but decreased significantly thereafter to US$2.1 billion in 2018 and US$1.4 billion in 2019. These substantial changes were primarily driven by the changing costs of hosting refugees. In-country refugee costs fell by 76% from US$1.8 billion in 2017 to US$455 million in 2019. Despite this significant decrease the costs associated with the hosting of refugees still made up the largest share of Italy’s bilateral ODA in 2019 (31%). However, even excluding such costs, Italy’s bilateral ODA to other sectors still decreased by 30% between 2017 and 2019.
The recent cuts in bilateral ODA affected various sectors. Bilateral contributions to humanitarian assistance — traditionally Italy’s most highly funded sector — declined by 57% from US$268 million in 2017 to US$116 million in 2019. Contributions to government and civil society dropped by 37% from US$156 million in 2017 to US$98 million in 2019 and contributions to agriculture went down by 30% from US$103 million in 2017 to US$72 million in 2019.
Despite the overall decrease in bilateral ODA, funding to education increased by 36% from 2017 to 2019, overtaking humanitarian assistance as the biggest sector for bilateral ODA abroad with US$137 million in 2019. Health, education, and agriculture — the key priority areas defined in the Italian Agency for Development Cooperation (AICS) guidelines (for the 2019 to 2021 period) — together represent 23% of Italy’s bilateral spending in 2019. Excluding the cost of hosting refugees, they make up 33% of Italy’s bilateral spending in 2019.
Italy currently provides almost all bilateral ODA in the form of grants (92%) in line with the DAC average. The share of ODA provided as loans and equity investments is expected to rise as Italy’s development bank is increasingly engaging in innovative financing mechanisms.
The majority of Italy’s bilateral ODA is disbursed through the public sector (57% in 2019) although this figure stood at 75% in 2017. Bilateral funding through multilateral organizations also declined in absolute terms from US$538 million in 2017 to US$347 million in 2019, although its share of total bilateral ODA slightly increased from 17% in 2017 to 24% in 2019. Bilateral funding through NGOs grew both in absolute terms (from US$221 million in 2017 to US$237 million in 2019) and as a percentage of total bilateral ODA (from 7% in 2017 to 17% in 2019).
Italy’s ODA recipients are primarily in ‘sub-Saharan Africa’ and the MENA region
‘Sub-Saharan Africa’ (SSA; meaning the countries of Eastern, Western, Central, and Southern Africa, according to the African Union’s designations) and the Middle East and North Africa (MENA) region (receiving US$279 million and US$237 million in 2019, respectively) are priority regions for Italy’s bilateral development cooperation. A large share of Italy’s bilateral funding is unallocated by country and region. When excluding these funds, Italy provided 36% of its bilateral ODA to SSA and 31% to the MENA region in 2019. These regions are expected to remain Italy’s primary focus in the coming years.
Italy provided 18% of its bilateral ODA to low-income countries (LICs) in 2019, in line with the DAC average. However, most of Italy’s bilateral ODA is not allocated by income (52% in 2019; DAC average 40%): when excluding unallocated funding, LICs received 37% of Italy’s bilateral ODA in 2019. In 2019, the West Bank and the Gaza Strip (US$49 million), Tunisia (US$45 million), Afghanistan (US$39 million), Ethiopia (US$36 million), and Lebanon (US$32 million) were the largest recipients of bilateral ODA.
Multilateral contributions primarily go to EU institutions
Core contributions to multilateral organizations made up 68% of Italy’s ODA in 2019 (DAC average: 41%). A large proportion is channeled to European Union (EU) Institutions, which received US$1.9 billion of Italy’s ODA in 2019, amounting to 63% of the country’s total contributions to the multilateral system. Most of the ODA Italy channels through the EU has been used to fund the EU’s response to the unprecedented number of asylum seekers reaching Europe in recent years.
Other recipients of Italy’s multilateral ODA in 2019 included the World Bank Group (US$423 million or 14% of multilateral ODA), regional development banks (US$271 million or 9%), and UN agencies (US$194 million or 7%).
Unless otherwise indicated, all data in this section is based on the cash-flow basis measurement system. For more information, see our Donor Tracker Codebook.
For more granular and up-to-date development finance data on Italy, including information on where and in which sectors it is spending both ODA and non-ODA funds, please consult the IATI d-portal. IATI is a reporting standard and platform on which organizations and governments voluntarily publish data on their development cooperation.
Main Actors
MAECI leads on strategy; AICS, implements bilateral programs; embassies play a key role in partner countries
MAECI leads on strategy; AICS, implements bilateral programs; embassies play a key role in partner countries
Prime Minister Mario Draghi, the former head of the European Central Bank, has led the Italian government since February of 2021 after Giuseppe Conte’s center-left coalition collapsed. Draghi’s government is supported by a large, multi-partisan majority in the Italian Parliament. The Prime Minister plays a role in determining the focus of Italy’s development cooperation.
- The Ministry of Foreign Affairs and International Cooperation (MAECI), headed by Luigi Di Maio (M5S) since September of 2019, is responsible for defining the strategic direction of Italy’s development policy. Marina Sereni is the Vice Minister of Foreign Affairs and International Cooperation holding the cooperation portfolio. Within MAECI, the Vice-Minister of Foreign Affairs and International Cooperation plays a key role, overseeing the development of the official development assistance (ODA) budget as well as the development of the three-annual programming guidelines, which define the country’s overarching development objectives and priorities. The Directorate-General for Development Cooperation (DGCS), supports the Vice-Minister in defining the strategic direction of development programs. Leonardo Bencini and Eugenia Palagi are the Head and the Deputy Head of the Unit ‘Strategy, Global Processes and International Organizations’.
- The Ministry of Economy and Finance (MEF), led by Daniele Franco, has joint control over the cooperation with and contributions to development banks and funds together with MAECI. MEF collaborates with MAECI on the ODA budget. The Directorate III on International Financial Relations is an important part of MEF, which consists of 10 specific offices that participate in informal government groups (including the G7 and the G20) and deal with development-related initiatives. The Director-General of Directorate III is Gelsomina Vigliotti, whose team coordinates the partnership with MAECI as well as the organization of the G20’s Development Minister meeting.
- The Interministerial Committee for Development Cooperation (CICS) usually meets twice a year to approve the three-year Programming Guidelines and ODA budget. CICS is chaired by the Prime Minister and is composed of the Minister and Deputy Minister of Foreign Affairs, as well as representatives from other ministries, including finance and the environment.
- The Joint Development Cooperation Committee decides on operational issues, including all projects worth over €2 million (US$2.2 million). It is chaired by MAECI and composed of the heads of MAECI’s DGCS and AICS.
- The Italian Agency for Development Cooperation (AICS) is led by Luca Maestripieri. AICS develops, supervises, and implements Italy’s development programs. Following criticism from civil society organizations (CSOs) about inadequate staffing —echoed in the OECD Development Co-operation Peer Review of Italy published in November of 2019 —the Italian Parliament agreed in 2020 to increase the number of AICS staff by more than 50%.
- The Ministry of Health plays a crucial role in preparing Italy’s positioning around health in the G7 and G20. The development finance institution, Cassa Depositi e Prestiti (CDP), is a joint-stock company under public control, which provides technical and financial support to MAECI and AICS. It acts as the administrative manager of development financing, by signing agreements with the governments of partner countries or by managing Italian, European, international, and private sector funds. CDP itself can also finance development projects, using its own resources or private/public blending instruments. Giovanni Gorno Tempini is the Chairman of CDP and Dario Scannapieco the CEO. Embassies play a key role in programming bilateral funds on the ground. Allocations to partner countries are based on multi-year country programs developed by DGCS in consultation with Local Technical Units and embassies. At a country level, regional departments at DGCS’ headquarters then develop and approve projects after consultation with the embassies.
Budget Structure
Foreign Ministry manages main ODA budget line; Ministry of Interior covers costs of hosting refugees
Italy’s budget documents indicate that the country will spend €5.4 billion (US$6 billion) on ODA in 2021. This marks an overall increase of 13% compared to the ODA component in the 2020 budget (€4.8 billion or US$5.4 billion).
The Ministry of Economy and Finance (MEF) manages the largest part of Italy’s ODA budget (45%) in 2021: €2.4 billion (US$2.7 billion). The MEF mainly contributes to Italy’s development funding through contributions to the EU's general budget, which includes the Development Cooperation Instrument (DCI).
The Ministry of Interior controls the portion of the ODA budget allocated for spending on refugees and migration-related issues. In 2021, €1.6 billion (US$1.8 billion, 29%) is budgeted for the Ministry of the Interior. According to OECD data, in 2019, refugee costs accounted for 10% of overall ODA, down from 31% in 2017 and 22% in 2018. In 2021, Italy budgeted €1.6 billion (US$1.8 billion) for the Ministry of Interior associated with the cost of hosting refugees. This represents 29% of the total budgeted ODA in 2021 compared with 33% in 2020. However, according to Italian CSOs, this figure is not easily comparable with the official ODA numbers of the Organization for Economic Co-operation and Development (OECD). Openpolis and Oxfam note that a significant share of ODA that Italy budgeted for the Ministry of Interior has traditionally not been counted as ODA by the OECD.
The Ministry of Foreign Affairs and International Cooperation (MAECI) manages €1.2 billion (US$1.4, 23%) of the ODA budget in 2021. The main ODA-related budget envelope within the MAECI’s budget is the program 4.2 ‘Development Cooperation’. It comprises ‘chapters’ of funding to Italy’s development agency, AICS (€527 million or US$590 million in 2021), and contributions to the European Development Fund. It also includes several ‘chapters’ of contributions to the UN and other multilaterals.
Overview: Italy's 2021 budgetary sources |
millions
|
millions
|
| Ministry of Economy and Finance (MEF) | 2,397 | 2,683 |
|---|
| Ministry of Foreign Affairs (MAECI) | 1,242 | 1,390 |
|---|---|---|
| Transfers to AICS | 527 | 590 |
| Multilateral and European cooperation | 556 | 622 |
| Staff+ monitoring evaluation | 9 | 10 |
| Cooperation on migration | 52 | 58 |
| Other | 98 | 110 |
| Ministry of Interior | 1,563 | 1,750 |
|---|---|---|
| Other ministries | 153 | 171 |
| Ministry of Health | 15 | 17 |
| Ministry of Environment | 50 | 56 |
| Ministry of Education an Research | 19 | 21 |
| Ministry of Economic Development | 1 | 1 |
| Ministry of Infrastructure and Transport | 68 | 76 |
| Total | 5,355 | 5,994 |
|---|
Budget Process
Parliamentary budget discussions run from October to December; Overall ODA levels are set in March and April
- Ministry of Economy and Finance (MEF) develops three-year budgetary guidelines: From February to April each year, the government develops the Economic and Financial Document (DEF), which sets a three-year framework for economic and budgetary planning. Key decision-makers in this process are the Prime Minister, the Minister of Finance, the Minister of Foreign Affairs and International Cooperation, and the Vice Minister of Foreign Affairs. The DEF is presented to the parliament by April 10 each year for approval from both houses.
- Government develops the budget draft: From July to September, the Cabinet develops the budget draft. The draft budget is presented to Parliament in mid-October. Key stakeholders include the Vice Minister of Foreign Affairs, the Minister of Foreign Affairs, the Minister of Finance, and the Prime Minister. As budget negotiations between the government and Parliament start before the presentation of the draft budget, Members of Parliament and Ministry of Foreign Affairs and Development Cooperation (MAECI) staff are frequently consulted by interest groups during that period.
- Parliament examines, amends, and votes on budget draft: Parliamentary budget discussions run from October to December. The Budget committees of the Chamber of Deputies and the Senate set the final budget levels, and the Foreign Affairs committees of both houses give recommendations on amendments to the bill. Members of these committees are key stakeholders in the budget allocation. The full parliament votes on the budget by the end of December.
In addition to the regular budget process, the government usually issues a decree known as the ‘one thousand extension decree’ (‘milleproroghe’) at the end of December. It uses this decree to finance additional measures in the next budget year, relating to any budgetary issue. Parliament examines and may amend the decree from January to February. This usually provides an additional opportunity for interest groups to influence the ODA budget.