Development Aid. A Belief in Question

20 January 2025 will remain a dark day for those involved in US development cooperation. The day after his return to the presidency, Donald Trump signed an executive order mandating an immediate 90-day freeze of all USAID programmes. The order was followed fifteen days later by the announcement of the closure of USAID – an institution that was described as a ‘criminal organisation’. In Project 2025’s policy document, the Heritage Foundation offered three justifications for these measures: reducing the influence of the federal government, refocusing foreign policy on national interests, and eliminating programmes deemed ‘ideologically hostile’ to conservative values.

That same year Foreign Policy ran the headline: ‘The End of Development’. More than highlighting the uncertain future of development aid, the feature questioned the very idea of development as the Western world has promoted it for the past 80 years. For the Trump administration, foreign aid is no longer about sustainable development, global solidarity, or climate justice – it is about America First. But is this view shared by other donors? As the international liberal order falters, are we witnessing the end of the post-war promise of development, progress, and prosperity for all?

The liberal foundations of development aid

In the post-1945 context of reconstruction and emerging global governance, official development assistance (ODA) was conceived to address the notion of ‘underdevelopment’, first articulated by Harry S. Truman in January 1949. In practical terms, the aim was to win the ‘hearts and minds’ of emerging elites in the newly independent states, with development aid functioning as a tool to anchor post-colonial nations in the liberal US-led bloc. Intellectually, the development paradigm was rooted in concepts inherited largely from interwar solidarism and liberal internationalism – according to which all nations benefit from open trade and some form of production specialisation in global value chains, as well as from the establishment of multilateral institutions capable of avoiding grave imbalances. Driven by a shared normative outlook and economic agenda upheld by the UN Charter and operationalised through the Marshall Plan and the creation of the International Bank for Reconstruction and Development (IBRD), the Washington-led apostles of development promoted a linear vision of modernisation. In this vision, every country could progress along a universal scale of development – a logic that itself had been re-adapted from colonial ideology to the post-colonial context. Some of its leading theorists, such as Walt Rostow, actually worked in Geneva at the newly formed UN Economic Commission for Europe under the stewardship of Gunnar Myrdal (a former professor at the Geneva Graduate Institute), before entering the Kennedy administration in the 1960s.

Many early adherents of the development paradigm drew inspiration from Rostow’s modernisation theory, according to which aid should be conceived as a lever for take-off’ – the decisive breakthrough beyond the ‘preconditions’ for growth. For them, North-South transfers could speed up that process of global convergence through the transfer of technology, knowledge, and capital. A similar theory was the Big Push, which argued that poorer countries could not develop in small steps but required massive initial investments to escape the ‘poverty trap’. In many ways, development was thus the other face of modernisation and a particular expression of the Western world’s protracted ‘civilising’ mission – one which the young Democrats who gathered around Kennedy in the 1960s sought to renew while distancing it from its colonial origins.

To facilitate financial transfers and implement development projects on the ground, multilateral administrative institutions were established, accompanied by new categories of professional staff, experts, and training institutions. Although originally intended to establish a stable international monetary system and to promote the reconstruction of war-torn countries, the Bretton Woods agreements would eventually serve as the framework for this grand venture (see Timelines: History of development). Alliances began to form, such as Kennedy’s Alliance for Progress in 1961, an emblematic example of aid deployed as a diplomatic tool to strengthen the alliances of the free world and advance economic interests. The Eastern Bloc was not to be outdone, with the Soviet Union developing its own development network during the same period.

Challenging development aid: the neo-colonial critique

For its critics, the rationale for ODA – its moral ambitions notwithstanding – rested on political, economic, and geopolitical imperatives from its very inception. Aid, they argued, was primarily aimed at developing the soft power of donor countries, de facto perpetuating the imperial reach of the former colonial powers after the loss of their overseas territories. For the Western camp, development aid served to contain Soviet influence and promote the capitalist model, while for the USSR it served to prop up communism in allied countries and counter US advances. The early development paradigm was thus condemned as a flawed political project, essentially a neocolonial smokescreen reproducing and entrenching structural inequalities and global injustice.

Dependency theory emerged in the 1960s with the central idea that underdevelopment is not a matter of backwardness on a linear scale, but the product of a structural relationship of exploitation between the centre and the periphery. In the same vein, the post-development approach of the 1990s asserted that the very notion of ‘development’ is part of a parochial Western discourse, which produces political dependence and epistemic domination. These critics also pointed out the instrumental approach of Western development rationales, which aimed at ensuring access to natural resources for Western extractive industries in the Global South after decolonisation. This sat in tension with the demands of the Global South and its multilateral institutions – channelled through the G-77 and the newly formed UN Conference on Trade and Development (UNCTAD) – for recognition of a ‘right to development’ (recognised as human right in 1986) and the ability of states to nationalise extractive industries for the benefit of their people. For critics, the association between development and modernisation theories justified the continued private appropriation of the earth’s resources the world over, leading to their depletion through pollution and overexploitation following an intrinsically instrumental and expropriative approach to nature.

Development aid and the neoliberal paradigm

In many ways, the current reactionary assault on the development paradigm is reminiscent of the neoliberal attacks of the 1980s under the joint leadership of President Ronald Reagan in the US and Prime Minister Margaret Thatcher in the UK. The two joined forces to combat the spread of NIEO ideas at the UN, while calling for broad reform – if not abolition, in the case of some of Reagan’s most radical ideologues – of Washington-based multilateral organisations which, like the World Bank, were considered to distort global markets by distributing state subsidies.

The 1980s also saw a neoliberal approach to reforming development bureaucracies, inspired by the New Public Management paradigm and buttressed by what came to be known as the ‘Washington Consensus’ – which limited the purpose of development aid to promoting ‘rule of law’ reforms against corruption and other market distortions rather than building national infrastructure (like dams, roads, or major electricity-generating projects) in the developing world. Following a political agenda designed to curb bureaucracy and establishing ‘quasi-market’ environments for public policy, it imposed harsh structural conditionalities on recipient countries frequently riddled with public debt. These structural adjustment programmes wrought havoc in many developing countries, leaving lasting economic and psychological scars.

The SDGs as a turning point

Under the leadership of Secretary-General Kofi Annan, the Millennium Development Goals (MDGs) proposed an alternative to the neoliberal project. Covering the period 2000-2015, the MDGs aimed to mitigate the excesses of neoliberal structural adjustment policies by focusing on basic objectives such as the eradication of poverty and hunger and the fight against infectious diseases – thus going beyond pure ‘rule of law’ projects. In many ways, the SDGs – adopted on 25 September 2015 by the United Nations General Assembly to replace the MDGs – marked a significant shift in the development paradigm. Breaking with the idea of a unidirectional flow from rich to poor, the SDGs shifted the logic of aid towards systemic and intersectional cooperation involving all countries from North and South to address shared global challenges such as climate change, inequalities, and human rights. Stressing the transversality and interdependence of development issues and promoting a more participatory approach, the SDGs replaced the notion of ‘aid’ with that of collective investment in global public goods. Accordingly, the SDGs redefined development as a set of cross-cutting and shared challenges rather than a process of the South catching up.

While the SDG approach allowed for issue linkages under the broad umbrella of sustainability, more granularity, and a more inclusive multi-stakeholder approach, its kaleidoscopic architecture also led to fragmentation and, at times, overbearing complexity – leading critics to point to the inefficiencies created by ‘regulation by indicators’. In the absence of a unifying paradigm or ideology, the SDGs came to represent a set of variegated practices driven by a wealth of actors and interests. To a certain extent, the SDGs were criticised for weakening development’s narrative coherence and emancipatory telos, in part succumbing to the neoliberal ethos of crisis management, obsession with metrics and audits, and fragmented agility.

The SDGs also came at a time when many countries in the South were experiencing exceptional economic growth levels, particularly in Asia, while the North was increasingly affected by post-industrial decline, the erosion of the welfare state, and the dismantling of the rule of law – all of which removed the gloss from the Western gospel of progress. This resonated with an increasing number of postcolonial, postmodern, and posthuman critics, further decentring and undermining the Western paradigm of modernity to which development was organically tied. From such a perspective, the end of development is not just the termination of a North-South relation, but, more profoundly, an all-pervasive sense-making crisis of the postliberal world.

Within this broad context, a whole body of literature – marked by debates on the quality and nature of the measures used to assess these results – has assessed the successes and failures of development cooperation over the past decades and states’ ability to meet the SDGs. Among the successes of development aid since 1945, three are regularly cited: the decline in extreme poverty, global health advances (vaccination, HIV, malaria, infant mortality), and progress in universal primary education.

Today, the outlook for aid and development seems bleak: almost no donor country has met the target of spending 0.7% of GDP on development aid. While inequalities between countries have been diminishing on average, they have been rising within most countries, including in the West, eroding their social fabric and democratic foundations. Growing international tensions are fuelling government spending on defence and security at a time when negative perceptions of aid and aid fatigue are at an all-time high. The crisis of development and the shortfall of aid programmes remain, however, above all a problem for those who depend on them. Adding together the beneficiary populations in very low-income countries, those supported by health programmes, and those affected by humanitarian interventions, around two billion people still depend, directly or indirectly, on international aid (United Nations estimate).

The future of development aid

The question thus arises: what future shape could development aid take given the current loss of faith and structural impediments it faces?

One view is that business will continue as usual, but at a reduced and more efficient scale. After all, development has become a cottage industry, with between 10 and 15 million people working in the sector worldwide. In a context of drastically reduced funding, development professionals are aiming to adopt a more sober and pragmatic approach, drawing on hard-won lessons from the past, such as the importance of local participation, the need for fair local fiscal policies (see Carbonnier), and for more targeted measures and efficient impact measurement. To some extent, tech-driven solutions such as mobile apps and customised AI may also help increase the efficiency of development projects.  Nevertheless, under this optimistic – and rather unrealistic – scenario, there is a real risk that development retreats into a permanent state of crisis, in which emergency management perpetually disables organisations and prevents them from contributing to longer-term humanitarian assistance. A related trend has been the prioritisation of sustainability and environmental concerns, often drawing on calls for degrowth. Indeed, the discourses of development and sustainability have been converging since the adoption of the SDGs, leading some to argue that the environment is the future of development (see Hufty).

Such calls, however, have mostly emerged from the West, while countries in the Global South are prioritising their sovereignty and economic development over environmental goals. Other voices have seen in the decline of US hegemony – and the related crisis of development – an opportunity for emancipation, as well as a way to foster South-South collaboration. Countries in the Global South are exploring new approaches, focusing on novel forms of institutional collaboration such as BRICS, and turning away from old partners in favour of new ones (some sub-Saharan countries have, for instance, started to replace France with Russia or China). So-called ‘emerging’ donors such as China, Turkey, and Qatar are positioning themselves as the new funders and operators of development projects, while promoting a ‘South-South’ dynamic intended to be more horizontal and equitable. For Ngozi Okonjo-Iweala, Director-General of the World Trade Organisation (WTO) and former Nigerian Finance Minister, the decline of development constitutes an opportunity for emancipation. Now more than ever, she claims, the focus should be on investment and the mobilisation of domestic resources, echoing the stance already adopted by a number of donors. In a similar vein, other leaders, such as Abdoulaye Diop in Mali, have welcomed the US cuts, emphasising the sovereignty of their states.

These two trends – declining development aid from the Global North and the enhanced role of China and South-South partnerships – may actually lead to a return to bilateralism and conditionality in development, rather than multilateral management of aid programmes, making aid once again more restricted, political, and conditional. The OECD concurs that, despite its historical ineffectiveness, conditionality could make a comeback due to a lack of alternatives to ensure policy ‘ownership’ in a context of reduced funding. This may encourage more blatant pursuits of national interests under the cover of development – using aid as a geopolitical instrument or a tool for security or migration control – as US and now EU discourses and practices have amply showed. Such a scenario is particularly to be expected in the current context of rising rivalry over mineral resources, friendshoring, and the consolidation of spheres of influence. China, of course, is the elephant in the room: despite its claims to a policy of ‘non-conditionality’, the Chinese model of financing infrastructure development in exchange for access to natural and energy resources masks a new form of economic and political hegemony that dare not speak its name.

Finally, given that foreign direct investment has already dwarfed ODA in most contexts in recent decades (see Carbonnier), some development specialists argue that increased financial flows and related innovative financial instruments are the solution to reversing the decline in development aid. Public-private partnerships are a well-trodden path for supporting countries in the Global South, particularly in the health sector. Blended finance models combine public or philanthropic funds with private capital in order to reduce investment risk and make high-impact projects more attractive to private investors. In a similar vein, ‘development bonds’ (or ‘sustainable bonds’) are designed to finance projects with measurable social or environmental benefits, such as the energy transition. Another way in which finance could further contribute to development in the future is through ‘global taxes’ –  such as levies applied to transnational activities including financial transactions, carbon emissions, or digital flows – in order to finance global public goods or reduce inequalities.

Conclusion

To conclude, one may ask whether the current fragmentation and managerialisation of development implies the end of development as a coherent paradigm, and whether development has lost its ‘future tense’ and emancipatory promise. The shift from multilateralism to bilateralism seems here to stay, and will likely reinforce the thorny issue of conditionality in development aid. With resource scarcity a pressing concern, the danger of development again being used more openly as a neocolonial toolset looms large. Most concerning, however, is that the decline or end of development may coincide with – or even foster – the reproduction of inequality.

Faced with realities that demand structural change, what can development aid do? What kind of developmental imaginaries and alternatives emerge once liberal universalism is no longer its default grammar? What links should be forged with the humanitarian sector? Will development become a struggle for conservation and sustainability? Must development fundamentally promote human rights and democracy? No satisfactory, concrete answer has yet been found to these questions – this issue examines and seeks to address some of them.