This study defines the concept of ‘strategic ODA,’ which has recently gained attention, and proposes ways to improve the Korean ODA system to promote strategic ODA. Strategic ODA is defined based on a literature review of related academic fields. Elements for promoting strategic ODA are derived for different stages of the ODA process – planning, implementation, and performance management. Policy recommendations are drawn based on an evaluation of the Korean ODA system, an analysis of major donor countries, and interviews with international development cooperation experts from a strategic ODA perspective.

Chapter 2 reviews the academic literature in business administration, public administration, and political science to define the concepts of strategy and the term ‘strategic’. This study defines strategic ODA as “ODA as a means to achieve foreign policy goals, with differentiated competitiveness, and clear goals and action plans to achieve desired results.” An analytical framework for pursuing strategic ODA was derived to determine factors to consider at each stage of planning, implementation, and performance management. First, it is essential to have planning capabilities that encompass the vision, strategic goals, targets, and performance indicators. Coordination and cooperation between relevant ministries is a given. After that, it is necessary to decompose the strategic objectives into executable units, form the required organization, and establish a budget plan and periodic performance review process. For result management, the main elements are setting performance targets and indicators, and disclosing performance-related information.

Based on the strategic ODA concept and analytical framework developed in the previous chapter, chapter 3 presents case studies of the leading bilateral ODA donors for benchmarking. The United States implements the strategic ODA considerations proposed in this study throughout the planning, implementation, and performance management phases based on the principle of Managing for Results (MfR) framework. The U.S. Agency for International Development (USAID) plays a central role in ODA implementation, working closely with the Department of State. While Germany stands out as the only country among the OECD Development Assistance Committee (DAC) members with a ministry dedicated to international development cooperation, Germany’s development cooperation also involves a variety of actors, such as local governments and the private sector. Therefore, Germany invests incoordinating among implementing actors towards unified development cooperation goals. Japan’s ODA Charter explicitly states national interest as a goal, and this factor is considered in evaluating its ODA performance from a national interest or diplomatic perspective. In some cases, different ministries or agencies play specialized roles according to their development cooperation objectives. For example, FinDev, a Canadian development finance institution provides various instruments to support private sector development in developing countries, which also helps to promote the entry of Canadian companies into these markets. The Netherlands has a mechanism for international trade linkage that considers development cooperation and overseas expansion of Dutch companies. The Netherlands’ performance framework and information disclosure system are the most noteworthy among the donor countries we analyzed. Finally, as Denmark strives to consolidate its position as a leaderin the action against climate change, the country also shows coherency in development cooperation. It systematically strives for results by setting a specific strategy and allocating the budget accordingly.

Chapter 4 reviews Korea’s ODA system from the strategic ODA perspective. First, the chapter explains the legal and institutional system of Korea’s international development cooperation and then summarizes the implementation procedures of grant and concessional loan projects, respectively. Although Korea’s ODA system has improved since the enactment of the Framework Act on International Development Cooperation in 2010, there is still work to be done. In particular, to promote strategic ODA as defined in this study, further efforts are needed to better align ODA with foreign policy goals, promote competitiveness in the local context, and pursue systematic goals and action plans to achieve results. Based on the analysis of government policy documents and institutions, this chapter identifies areas for improvement for each phase of planning, implementation, and performance management. The Comprehensive Strategy, a top-level implementation strategy published every five years, should contribute to the achievement of the objectives set out in the Framework Act. There are various levels of thematic or sector policies and strategies, national or regional strategies, which need to be complementary. International development cooperation policies should also be consistent with other relevant policies and strategies, such as the foreign policy and the national security strategy. The criteria for approving individual ODA projects should be clear, be transparent, and align with the overarching strategy. By ensuring that each project is aligned with the strategic objectives, the project would effectively achieve the intended results of the Korean government.

The case studies of the five donor countries provide valuable insights and lessons for Korea's strategic ODA implementation. By carefully examining the strengths and weaknesses of each country’s system, Korea can identify best practices and adapt them to its own context to enhance the effectiveness and efficiency of its ODA programs.

Chapter 5 presents the survey results on strategic ODA. The purpose of the survey was to verify the understanding of strategic ODA among the academics and practitioners in international development cooperation and to identify areas for improvement in promoting strategic ODA. The experts agreed that the planning phase most critical in promoting strategic ODA. However, under the current system, there is some question as to who is responsible for planning strategic ODA. There was a consensus that a unified approach involving more than 40 implementing ministries is urgently needed to implement strategic ODA in the planning stage. The experts also argued that it is essential to set clear targets for strategic ODA. At the same time, a regular performance management plan is needed to monitor the achievement of targets.

The study suggests the following to improve Korea’s strategic ODA system:


1. Deepen expert engagement in high-hevel decision-making:
Recognizing ODA as an essential instrument of economic cooperation abroad, expertise in international development cooperation should be integrated into national-level decision-making processes regarding foreign policy and economic partnerships. This integration can be achieved through designated positions within relevant top-level decision-making structures.

2. Improve the roles of the Committee on International Development Cooperation (CIDC):
Strengthen the CIDC’s capacity to develop unified development cooperation programs that are consistent with national foreign policy aspirations. This could include expanding its expertise to enable comprehensive program planning and coordination.

3. Prioritize resource allocation and streamline processes:
Allocate dedicated budgets to strategic ODA priority programs to ensure flexibility and agility in resource allocation. Consider alternative budgeting mechanisms that bypass traditional annual review processes for individual projects within a priority program while maintaining accountability and transparency.

4. Implement blended finance for greater impact:
Utilize a mix of financial instruments, including grants, concessional loans, and innovative development finance solutions, to maximize the effectiveness of strategic ODA programs.

5. Strengthen results monitoring and measurement:
Establish robust performance measurement frameworks for strategic ODA, using measurable indicators aligned with program objectives and overall ODA goals. Ensure that individual program targets are clearly defined, quantifiable, and contribute to the broader strategic vision.