Budget Toolkit: Italy

The OECD collects and publishes granular data on DAC donors' ODA. While this data, featured in our Donor Tracker Profiles, provides the most comprehensive view of donor government ODA spending and is crucial for accountability and transparency, it provides only a past perspective. The time taken to collect and verify the information means that preliminary data are published about 3 months after the calendar year ends, and the complete and detailed data on resource flows take more than 12 months to be published.

To get a more up-to-date view on donors’ future plans and to influence ODA budgetary decisions, advocates need to look to donor budgets and their surrounding decision-making processes for insight. The majority of donors publish draft budgets and conduct negotiations in the last quarter of the calendar year before finalizing the next year’s budget. Through this series of Donor Budget Toolkits, the Donor Tracker aims to support advocates in better understanding donor budget timelines, how they translate to ODA spending, and how decision-making processes work, so they can best advocate for development cooperation in donor budgets negotiations. The series will be released over the upcoming months, in line with ongoing budget negotiations in markets tracked by the Donor Tracker.

ODA volume

How much ODA does Italy contribute?

In 2021, Italy spent a total of US$6.1 billion on ODA, making it the 7^th-largest donor country among members of the OECD DAC.

Italy’s ODA only represented 0.29% of the country’s GNI in 2021, putting it below the UN target of 0.7% but almost on par with the DAC average of 0.32%.

ODA sources

What are the main sources of Italy's ODA?

ODA decision-makers

Who decides on the development budget?

Italy has a parliamentary republic with a governmental structure that includes three primary branches: the executive, legislative, and judicial branches.

The Executive Branch:

The President of the Republic: Italy's President is the head of state, with a mainly ceremonial role. The President appoints the Prime Minister and plays a formal role in the government formation process.

The Council of Ministers: The executive power is vested in the Council of Ministers, led by the Prime Minister. The Council proposes the national budget to Parliament.

The Legislative Branch:

The Parliament: Italy's legislative branch is bicameral, consisting of two houses: the Chamber of Deputies (Camera dei Deputati) and the Senate of the Republic (Senato della Repubblica).

The budget process in Italy is bicameral. The government, through the Council of Ministers, prepares the budget proposal, outlining revenue and expenditure plans for the upcoming fiscal year. The proposal is presented to Parliament. Both houses of Parliament play a crucial role in the budget process. Members of the Chamber of Deputies and the Senate review, debate, and potentially amend the budget proposal. The budget must gain approval in both houses to become law.

The Judicial Branch:

Does not directly participate in the budget process.

Key Stakeholders

ODA timeline

When and how are decisions on Italy's budget made?

Parliamentary budget discussions run from October to December and overall ODA levels are set from February to June. The Italian fiscal year corresponds to the calendar year.

Current Budget Impact

What does the current development budget tell us about Italy's ODA?

Following steady decreases between 2018 and 2020 due to a reduction in in-country refugee costs, Italy’s ODA jumped back up sharply in 2021 in response to the COVID-19 pandemic. Italy’s ODA in 2021 equated to US$6.1 billion, bringing development assistance nearly back to 2017 levels (0.3% ODA/GNI).

In-donor refugee costs have also taken up a significant share of Italy’s ODA. In 2022, as preliminary data shows, Italy spent US$1.5 billion or 23% of its total ODA on these costs. In-country refugee costs once again jumped in 2022 to US$1.5 billion based on OECD's preliminary data, following previous increase between 2020 and 2021. The 2022 budget clarified the practice of counting in-donor refugee costs as funds for Italian ODA, in addition to counting the resources for 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/GNI ratio increased from 0.22% in 2020 to 0.29% in 2021. In the country’s 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 been on track to meet. However, in December 2022, Deputy Minister of Foreign Affairs and International Cooperation Edmondo Cirielli, in an interview with the Catholic newspaper Avvenire, reiterated the Italian government’s commitment to the 0.7% ODA to GNI ratio by 2030.

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.

In 2022, Italy's Parliament voted to approve a budget for 2022-2026, which includes an increase in the international cooperation budget by EUR99 million ( US$104 million) for 2022, EUR199 million ( US$210 million) for 2023, EUR249 million ( US$262 million) for 2024, EUR299 million ( US$315 million) for 2025, and EUR349 million ( US$368 million) per year starting from 2026.

Next steps?

Parliamentary budget discussions run from October to December. The full parliament votes on the budget by the end of December. While the key moment for advocates to influence budget allocations is from July-September, there are other developments in the Italian ODA landscape to observe.

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.

On October 29, 2023, it was revealed that Italy's 2024 draft budget established a new "Italian Fund for Horizontal Cooperation for Africa" under the auspices of the Mattei Plan, allocating EUR600 million (US$633 million) to the plan through 2026. Experts noted that the economic endowment to Africa appears limited compared to the ambitions voiced by Italy in the months preceding the draft's release.

Italian Prime Minister Giorgia Meloni previously announced that the Mattei Plan will also be funded by the 70% of the resources allocated to the Italian Climate Fund, equivalent to EUR3 million (US$3 million). Management of the fund will fall under the Presidency of the Council of Ministers. The opposition, notably the Green Party and the Left, opposed diverting Climate Fund resources to the Mattei Plan. The budget draft has been approved by the Council of Ministers and was sent to the Chamber for debate prior to a final vote by the end of 2023.