Imagining the Future of Development

Photo from onlince sources

23 March 2025

The ongoing dismemberment of USAID has shaken the world of international development assistance. While the legality of the closure is being challenged in numerous legal cases and some remnants of USAID’s work will end up in the State Department, it is clear that irreparable damage has already been done. Even if the Trump Administration’s decision is reversed, it will be years before the agency recovers its influence and impact.  The elimination of $44 billion per year of development funding, which is nearly one-fifth of the global development budget, should force all of us to contemplate what development aid should look like post-USAID. There are steps that donors, recipients, and aid practitioners can take right now to maximize the impact of development assistance while using resources efficiently and acting as excellent stewards of the money provided by hard-working taxpayers.

First, a far more diverse and coordinated collection of donors is vital.  The advanced economies of the OECD’s Development Assistance Committee contribute more than $223 billion annually to Official Development Assistance. However, the development aid contributions of the world’s largest and most rapidly growing economies are not included in DAC and are harder to come by. China, India, Brazil, Turkey, Saudi Arabia, and the UAE all have increasingly important aid programs. It is crucial that all donors recognize each other’s roles and coordinate efforts to help the world’s poorest and most vulnerable countries without duplication or waste. Soft power, as competitive as it may be, does not necessarily have to be a zero-sum game.

Second, beneficiary countries should contribute more to their development. Some of the more trenchant voices supporting the immediate dissolution of USAID have indicated that it is time for countries to pay entirely for their own development. While this goal remains out of reach, there is an argument for a gradual transfer of responsibility for project design, delivery, and funding, as the beneficiary countries grow more financially stable, technically sophisticated and socially developed. Building the capacity of local development experts and empowering them to make locally tailored decisions on how their projects are run is critical to weaning beneficiary countries off developed countries’ largesse. For example, in Vietnam, where we have both worked on development projects for the best part of a decade, we have had mixed results in ensuring the government continue the projects after international funding has ceased. It could be because of lack of money; but it’s also a lack of engagement or belief in the final outcomes. In the post-USAID world, this localization of aid funding, responsibility and management should be prioritized.

Third, a thorough overhaul of the financial architecture of development assistance is needed. A new OECD report estimates a 60% -- or $6.4 trillion -- gap between financing needs and available resources. Solutions include realigning funding for priority development goals, combining public and private funds to leverage additional resources for development projects, and introducing innovative financing mechanisms like green bonds, social impact bonds, and impact investments. The Multilateral Development Banks, themselves much in need of reform, will have a major role to play. It is hoped that the Fourth International Conference on Financing for Development (FfD4) to be held in Seville, Spain, at the end of June, will find some solutions.

Finally, it is time to engage the private sector and allow business to become a leading force in development, not just a fellow traveler jumping on the bandwagon. Corporate commitments to Environment, Social, and Governance and Corporate Social have provided comfort to customers and investors and won plaudits in some communities, however, there is room to play more proactive roles. Whether through financing, management, innovation, and technology, business has an immense amount to offer. For example, AI, driven by the private sector, can have an unprecedented impact on development in sectors, such as healthcare delivery, education, agriculture and fisheries, forecasting the impact of climate change, predicting natural disasters, and enhancing governance, accountability and transparency. The administration of development, so often criticized for its heavy bureaucracy, can be revolutionized by data science advances in processing and automated data collection that lighten the burden of reporting, monitoring, and evaluation.

The wanton destruction of USAID has understandably been met with despair by many of our colleagues in the development sector. But the end of USAID is not the end of development. Now begins a new era of bringing the world’s poorest countries into a more equitable, balanced, and effective partnership with the world’s richest.

Edmund Malesky 

Director, Duke Center for International Development

Brook Horowitz

CEO of IBLF Global