Bilateral Versus Multilateral Funds

Bilateral Versus Multilateral Funds

The terms bilateral and multilateral are technically used to distinguish flows of Official Development Assistance (ODA). The OECD defines bilateral transactions as those undertaken by a donor country directly with a developing country. They also include transactions with NGOs active in development and other, internal development-related transactions like debt relief, administrative costs and spending on development awareness. A multilateral contribution, in contrast, can be delivered only by an international institution conducting all or part of its activities in favor of development. Moreover, the flow itself must lose its identity and become an integral part of the recipient institution’s assets such that donors cannot track and pre-define its uses.

Multilateral aid tends to be less tied to the political self-interest of individual donor countries. Multilateral organizations obtain their funding from multiple governments and spend it on projects in various countries. They normally require job-seekers to have specialized training in relevant fields such as public health, economics, business and social or behavioral sciences, as well as prior experience.
Bilateral organizations receive funding from the government in their home countries and use the funding to aid developing countries. Job requirements are similar to those of international organizations, though there are more opportunities for internships and entry-level positions.

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Source: Bilateral versus multilateral aid channels by Nilima Gulrajani;  Module 5: Multilateral & Bilateral Organizations


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