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Aid Architecture - Focus on Vertical Funds

In Focus: Vertical Funds

Global Programs or “vertical funds” focus “vertically” on specific issues or themes, in contrast with the “horizontal” approach of the country-based model of aid.While the first major global program, the Consultative Group on International Agricultural Research (CGIAR), was established 35 years ago, the current “boom” in vertical funds started in earnest when several large such funds were created in the late 1990s. “Verticalization” or earmarking of ODA can also be seen in bilateral assistance programs, such as the U.S. government’s PEPFAR.

Vertical funds may lead to an increase in the importance of the specific interventions they support in the overall financing for a given country. For example, the Global Fund to Fight AIDS, Tubrculosis and Malaria has increased the weight of infectious disease control in total aid for the health sector, particularly in Sub-Saharan Africa.

The effectiveness and sustainability of global programs will ultimately rest on the presence of complementary sector-level and country-level policies.  Back to main Aid Architecture page.

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What is IDA? The International Development Association (IDA) is the part of the World Bank that provides interest-free credits to the world's poorest countries. Learn more

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