Italy
At a glance
Funding trends
- Italy is the seventh-largest Organisation for Economic Cooperation and Development (OECD) Development Assistance Committee (DAC) donor in absolute terms, spending US$6 billion (in current prices; US$5.7 billion in constant 2020 prices) on official development assistance (ODA) in 2021.
- Italy’s ODA increased by 35% from US$4.2 billion in 2020 to US$5.7 billion in 2021, largely due to Italy’s global response to the COVID-19 pandemic. Funding in 2022 is expected to equate to US$6.3 billion (2020 prices).
- In 2021, Italy’s ratio of ODA compared to its gross national income (GNI) was 0.28%, up from 0.22% in 2020.
- Italy’s government previously committed to gradually increasing ODA to 0.7% of its GNI with an intermediate goal of reaching 0.36% in 2020, as outlined in its 2018 ‘Update to the Economic and Financial Document.’ However, Italy remains below the DAC average of 0.33% ODA/GNI in 2020, and its stated goal of 0.36%.
Strategic priorities
- Italy’s current three-year ‘Programming and Policy Planning Document’ sets out the strategic focus of development cooperation for 2021-2023. 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, in particular health multilaterals. 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 (Global Fund).
- 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
- Italy's Parliament voted to approve a budget for 2022-2026, which inscribed an increasing ODA trajectory, from US$6 billion in 2021 to US$7.4 billion in 2026.
- Draghi put COVID-19 response at the center of his national and international political agenda, with a focus on restarting economies and building back better.
- In 2021, Italy organized the Global Health Summit with the EU, signaling an increased focus on global health as a development priority. Italy also took on a leadership role in COVAX.
- Under Italian leadership, G20 countries pledged to redistribute US$100 billion of the US$650 billion in Special Drawing Rights (SDRs) returned in 2021 to low-income countries in response to the COVID-19 pandemic. Italy and other G20 countries announced that they would channel 20% of their SDR allocation to vulnerable countries.
- Italy maintains a crucial role in food security and climate change. Italy co-hosted COP26 and a pre-summit on food systems. At the G20, Italy pledged to triple its contribution to climate finance by US$1.4 billion per year for the next five years.
ODA Trends
Italy’s ODA in 2021 increased by 35%, compared to 2020, due to Italy’s COVID-19 response
In 2021, Italy spent a total of US$6 billion (current prices; US$5.7 billion in constant 2020 prices) on official development assistance (ODA), making it the seventh-largest donor country among members of the Organisation for Economic Co-operation and Development’s (OECD) Development Assistance Committee (DAC). In 2021, Italy’s ODA only represented 0.28% of the country’s gross national income (GNI), putting it below the UN target of 0.7% and the DAC average of 0.32%.
In 2018, ODA growth was reversed for the first time since 2012. Following steady decreases between 2017 and 2020, resulting from a reduction in in-country refugee costs, Italy’s ODA jumped sharply in 2021 due to the COVID-19 pandemic and Italy’s global health response. Italy’s ODA in 2021 equated to US$5.7 billion, bringing Italy’s ODA nearly back to 2017 levels (US$6.1 billion, or 0.30% ODA/GNI). 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 - targets Italy has not met. Since 2019, the ‘Economic and Financial Documents’ no longer mention such targets.
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$284 million) 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. 'Campaign 070' presented a bill to Parliament in 2022 to integrate the ambitious goal of reaching a 0.5% ODA/GNI target in 2027 and a 0.7% ODA/GNI target in 2030, though these may not come to fruition as a result of elections in September 2022.
AOI and CINI, two Italian NGO development umbrella networks, 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.
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$237 million (9% of total ODA) on in-country refugees. In 2017, that number reached US$1.9 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, US$458 million (10%) in 2019, and US$229 million (5%) in 2020. This decrease was the primary driver of Italy’s overall ODA decline between 2017-2020; however, even excluding refugee costs, Italy’s ODA decreased by 6% (from US$4.2 billion to US$4.0 billion) between 2017 and 2019. Net ODA, excluding refugee costs, rose to US$4.2 billion in 2020.
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 2021-2023 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;’ and
- ‘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, 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 intergovernmental 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 61% of its official development assistance (ODA) to multilateral institutions between 2011 and 2020; however, between 2012 and 2017, Italy’s share of bilateral contributions increased due to the high costs associated with hosting refugees. While this brought Italy’s bilateral and multilateral contributions more in line with the DAC average, Italy has tended to revert to greater multilateral spending in recent years. In 2020, Italy channeled 69% of its ODA multilaterally, well above the 42% average of all members of the Organisation for Economic Development and Cooperation (OECD) Development Assistance Committee (DAC).
Bilateral contributions continue to decrease; refugee costs remain top sector for spending
Italy’s bilateral contributions increased by 302% between 2012 and 2017, reaching a peak of US$2.8 billion in 2017, but decreased significantly thereafter to US$1.8 billion in 2018, US$1.1 billion in 2019, and US$928 million in 2020. These substantial changes were primarily driven by the changing costs of hosting refugees. In-country refugee costs fell by 88%, from US$1.8 billion in 2017 to US$229 million in 2020. Despite this significant decrease, the costs associated with the hosting of refugees still made up the largest share of Italy’s bilateral ODA in 2020 (16%).
The recent cuts in bilateral ODA affected various sectors. Bilateral contributions to humanitarian assistance—Italy’s second-most highly funded sector—declined by 38% from US$277 million in 2017 to US$173 million in 2020, but rose US$13 million from US$160 million in 2019.
Despite the overall decrease in bilateral ODA, funding for education increased by 31% from 2017 to 2020, and by 9% from 2019 levels. Health, education, and agriculture—the key priority areas defined in the ‘Italian Agency for Development Cooperation (AICS) guidelines’ (for the 2021 - 2023 period)—together represent 28% of Italy’s bilateral spending in 2020.
Italy currently provides the majority of bilateral ODA in the form of grants (74%), which is much lower than the DAC average of 89%. 2020 is the first year in which Italy did not provide more than 90% of bilateral ODA as grants. 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 (49% in 2020), followed by multilateral organizations (33%; as earmarked funding). Bilateral funding through multilateral organizations increased in absolute terms from US$388 million in 2019 to US$463 million in 2020, most likely due to increased COVID-19 support. Bilateral funding through NGOs declined in both absolute terms (from US$240 million in 2019 to US$203 million in 2020) and as a percentage of total bilateral ODA (from 16% in 2019 to 14% in 2020).
Italy’s ODA recipients are primarily in the MENA region and ‘sub-Saharan Africa’
The Middle East and North Africa (MENA) region and ‘Sub-Saharan Africa’ (SSA; meaning the countries of Eastern, Western, Central, and Southern Africa, according to the African Union’s designations) (receiving US$293 million and US$261 million in 2020, respectively) are priority regions for Italy’s bilateral development cooperation. A large share of Italy’s bilateral funding is unallocated by country and region (US$407 million). Italy provided 21% of its bilateral ODA to MENA and 19% to the SSA region in 2020. These regions are expected to remain Italy’s primary focus in the coming years, according to the current ‘Programming and Policy Document.’
Italy provided 15% of its bilateral ODA to low-income countries (LICs) in 2020, slightly less than the DAC average of 18%. However, most of Italy’s bilateral ODA is not allocated by income (45% in 2020; DAC average 40%). Lower-middle-income countries (LMICs) received 25% of bilateral ODA in 2020, while upper-middle-income countries (UMICs) received 15%. In 2020, Tunisia was the largest recipient of bilateral ODA (US$90 million), with US$15 million in grant support and US$75 million in loans. Libya (US$39 million), Turkey (US$39 million), Lebanon (US$36 million), and Ethiopia (US$31 million) followed, receiving mostly grant support.
Multilateral contributions primarily go to EU institutions
Core contributions to multilateral organizations made up 69% of Italy’s ODA in 2020 (DAC average: 42%). A large proportion is channeled to European Union (EU) Institutions, which received US$2 billion of Italy’s ODA in 2020, amounting to 65% of the country’s total contributions to the multilateral system.
Other recipients of Italy’s multilateral ODA in 2020 included the World Bank Group (US$432 million, or 14% of multilateral ODA), UN agencies (US$209 million, or 7%), and regional development banks (US$152 million, or 5%).
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
Prime Minister Mario Draghi, the former head of the European Central Bank, has led the Italian government since February 2021 after Giuseppe Conte’s center-left coalition collapsed. Draghi’s government was supported by a large, multi-partisan majority in the Italian Parliament; however, elections for a new government will take place on September 25, 2022, because the so-called unity coalition fell apart in June 2022. The Prime Minister plays a role in determining the focus of Italy’s development cooperation. Draghi and his cabinet will remain in their positions as caretakers until a new government is formed.
Development cooperation is defined as an ‘integral and qualifying part’ of Italian foreign policy and builds on the following architecture:
- The Ministry of Foreign Affairs and International Cooperation (MAECI), headed by Luigi Di Maio (Five Star Movement; M5S) since September 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 in 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), Fabio Cassese, supports the Vice-Minister in defining the strategic direction of development programs. Eugenia Palagi is the Deputy Head of the Unit ‘Strategy, Global Processes and International Organizations.’ Leonardo Bencini left the Unit in April 2022, and the leading role for the ‘Strategy, Global Processes, and International Organizations’ unit is currently vacant.
- 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 Francesca Utili, 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 2019—the Italian Parliament agreed to increase the number of AICS staff by more than 50% in 2020.
- The Ministry of Health plays a crucial role in preparing Italy’s positioning around health in the G7 and G20, as well as in other international fora. David La Cecilia is the Minister of Health's diplomatic advisor. Giovanni Leonardi is the Secretary-General of the Ministry of Health, and Sergio Iavicoli is Director General of Communication and European and International Relations. Gianni Rezza is the Director-General of Health Prevention; pandemic preparedness and response are within his purview.
- 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. Massimo Di Carlo is CDP’s Deputy General Manager and Business Director, and Pasquale Salzano is the European and International Affairs Director.
- 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 the country level, regional departments at DGCS’ headquarters develop and approve projects after consultation with the embassies.
- Civil society is involved in the policy-making process mainly through the National Council for Development Cooperation (CNCS). It is a consultative body bringing together 50 members of different backgrounds, including private-sector organizations, CSOs, and public authorities, to provide feedback on the government’s development policies. The CNCS divides its work between three groups (‘Agenda 2030,’ ‘private sector,’ and ‘migration and development’). Each is supposed to meet every two months, but there has been public criticism that the Council remains largely inactive.
- The Parliament plays an important role in the budget process. The Italian Parliament has two chambers: The Chamber of Deputies and the Senate. They examine, amend, and vote on the draft budget developed by the government. The Foreign Affairs committees of both chambers give recommendations on ODA budget amendments, while the budget committees of both chambers make final decisions.
Italy is in the early stages of developing an evaluation system following ‘Law 125,’ which calls for results-based management of Italian development cooperation. Italy has therefore established an ‘Evaluation Advisory Committee.’ Despite these recent efforts, the ‘OECD Development Co-operation Italy Peer Review’ in 2020 recommended that Italy should strengthen evaluation to inform future program design, strategic direction, and oversight of its development initiatives.
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 €5.6 billion (US$6.3 billion) on ODA in 2022.
The Ministry of Economy and Finance (MEF) manages the largest part of Italy’s ODA budget (46%) in 2022: €2.5 billion (US$2.9 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, €1.5 billion (US$1.8 billion, 28%) is budgeted for the Ministry of the Interior.
The Ministry of Foreign Affairs and International Cooperation (MAECI) manages €1.3 billion (US$1.5, 24%) of the ODA budget in 2022. The main ODA-related budget envelope within the MAECI’s budget is program 4.2 ‘Development Cooperation’. It comprises ‘chapters’ of funding to Italy’s development agency, AICS (€617 million, or US$703 million in 2022), and contributions to the European Development Fund. It also includes several ‘chapters’ of contributions to the UN and other multilaterals.
Overview: Italy's 2022 budgetary sources |
millions
|
millions
|
| Ministry of Economy and Finance (MEF) | 2,549 | 2,905 |
|---|
| Ministry of Foreign Affairs (MAECI) | 1,307 | 1,489 |
|---|---|---|
| Transfers to AICS | 617 | 703 |
| Multilateral and European cooperation | 405 | 462 |
| Other | 285 | 325 |
| Ministry of Interior | 1543 | 1,758 |
|---|---|---|
| Other ministries | 153 | 174 |
| Ministry of Health | 15 | 17 |
| Ministry of Ecological Transition | 53 | 60 |
| Ministry of Education an Research | 19 | 22 |
| Ministry of Economic Development | 1 | 1 |
| Ministry of Infrastructure and Sustainable Mobility | 68 | 77 |
| Total | 5,557 | 6,332 |
|---|
Budget Process
Parliamentary budget discussions run from October to December; Overall ODA levels are set in March and April
While the following section outlines the standard budgetary process, Italy is set to hold elections on September 25, 2022. Elections so late in the year could prevent the ‘Budget Law 2023’ from being approved in December, something which has not happened since the 1980s.
- 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 the Ministry of Foreign Affairs and Development Cooperation (MAECI) staff are frequently consulted by interest groups who hope to advocate for certain priorities within the budget during this period.
- Parliament examines, amends, and votes on the 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.