From aid to agency: Locally led development is the future

George Ingram
Senior Fellow
Brookings Institute
Cold War dynamics
The inexplicable, disruptive Trump Administration’s shuttering of USAID, termination of some 10,000 aid programs, and firing of USAID employees puts the spotlight on what has been a growing need to update the global aid architecture. During the construction of the current global aid architecture, over the second half of the 20th century, there were two dominant elements: the global geopolitics driven by a polarized struggle between the United States (and its allies) and the Soviet Union, and the concept of development dividing the world between relatively wealthy, developed countries, and wealth-deficient, developing nations.
The world has changed
This is no longer the world we inhabit in 2025. Geopolitics has become multipolar with influential players, not just governments, but corporations and civil society. The global challenges are no longer just poverty and economic growth, although they remain salient issues, but historic levels of migration, climate change, new infectious diseases, looming debt burden, ever rising costs of humanitarian relief, and slow economic growth. It is no longer a world divided by developed and developing countries, but a mix of wealth and poverty along a non-linear continuum with many countries along the lower end having the talent, capability, and will to drive their own progress. In fact, the mixed achievement toward the SDG objectives so far pinpoints that all countries face development challenges.
Aid is shrinking, development must evolve
Along with this changing global context, Official Development Assistance (ODA) declined 7.1% to $212.1 billion in 2024, down from $223.3 billion in 2023 marking the high point for development assistance. A range of factors – rising costs of defense, aid to Ukraine, and refugees, concern over budget deficits, changing political priorities – have driven eight major donors (U.S., UK, France, Germany, Belgium, Finland, Norway, Switzerland) to reduce funding for foreign assistance in the last several years.
With this changing face of “development,” major donors stepping back, a more capability fit Global South, and a diverse set of global challenges that affect all countries, what does this harbor for the global architecture of development? First, the issue is no longer the “aid” architecture but the architecture of “development” – meaning that the scope, or practice of development, must be expanded beyond just aid to other elements that affect national and global progress. Elements such as trade, investment flows, diaspora remittances, philanthropy, the role of the private sector, financial markets, government regulations, and the premise that economic and social progress cannot claim neutrality from a country’s political dynamics.
Second, it means that components of the 2005 Paris Declaration on Aid Effectiveness that have been partially honored – especially ownership, results, and mutual accountability – need to become the dominant trait of development cooperation – with the emphasis placed on collaboration. In particular, locally led development must become the lodestar. To put it in market terms, we need to move from “supply-side” development to “demand-driven” development. This requires governments and stakeholders in the Global South to take charge, as some are already doing. They need to set the priorities and terms of the relationship, with donor countries and institutions in the role of partner, advisor, and financer, but not in the one determining priorities or assuming the primary role in activity design and implementation. Further, the decline in the prominence of official donors opens the door and places greater responsibility on private philanthropy, civil society organizations, and the private sector to deploy their ability to innovate and lead to play an enhanced role in the next phase of global development.
Putting “demand development” into practice
Putting developing country stakeholders in the driver’s seat can be done at two levels. At the country level, national stakeholders must set the agenda to define donors can engage with them. At the global level, donors and partners must operate as peers. One way to executed this is by following the recommendations of the panel led by Mary Robinson in 2017 for the Development Assistance Committee (DAC), to become a joint donor/partner servant leader or energizing the Global Partnership for Effective Development Cooperation to the intended vision of an effective donor/partner collaboration.
Another possibility is that, while many question the role of INGOs and development contractors in locally led development, with donors and partner countries setting the appropriate ground rules, there are a range of supportive roles they can perform – from providing knowledge, to back-office support functions, access to global networks, and finance.
The architecture of development cooperation must embrace the broad scope of factors affecting a country’s progress. It should be built on the foundations of peer relationships and country stakeholders setting the agenda for their country’s development. And yes, we must recognize that we live in an interconnected world that flourishes best when we care for one another as fellow human beings.