NAIROBI—In an increasingly unstable geopolitical environment, governments across the developed economies of the OECD are rethinking their spending priorities. As they direct more funds toward defense, industrial competitiveness, and energy security, they are seeking offsetting expenditure cuts—and, in many cases, the axe is falling on development financing. In fact, members of the OECD’s Development Assistance Committee (DAC) are currently conducting reviews of their development-cooperation strategies and external-financing priorities.
This is not altogether bad news: development cooperation was long in need of a reassessment. But the reviews so far are focusing on the wrong thing. They want to adapt development cooperation to donors’ changing geopolitical, security, and commercial needs and objectives. What is really needed is an examination of the system’s ability to support the structural transformation required to reduce developing countries’ dependence on foreign aid. In other words, instead of simply asking how development cooperation should be financed, OECD governments should be asking what it should achieve.
Development cooperation has produced important progress, especially in health, education, humanitarian response, and public-sector capacity. But its original promise was not to support individual projects or deliver incremental social gains; it was to help countries overcome poverty, build productive economies, and gradually reduce their dependence on external resources. Yet after decades of effort, many developing countries are still grappling with persistent poverty, limited industrial capacity, rising debt burdens, and dependence on commodity exports and external finance.
Since the turn of the century, efforts to improve aid effectiveness—embodied by the 2002 Monterrey Consensus on Financing for Development, the 2005 Paris Declaration on Aid Effectiveness, the 2008 Accra Agenda for Action, and the 2011 Busan Partnership for Effective Development Co-operation—centered on how developing countries should change. Development partners thus emphasized principles like country ownership, transparency, and mutual accountability. While developing countries were expected to strengthen country systems, improve institutions, and demonstrate visible results, less attention was paid to the incentives shaping donor behavior.
This approach clearly failed to translate progress on social development into economic transformation. But adapting development cooperation to suit donors’ new geopolitical realities—the approach the DAC members’ reviews are taking—will do no better. It also fails to address the incentives shaping donor behavior, let alone the fundamental question of whether cooperation is helping to overcome dependency.
Migration offers an illustration of the reframing that is needed. In recent years, migration has become central to cooperation between many European governments and African countries, with development financing, diplomatic engagement, and partnership frameworks being linked to border management, return and readmission agreements, anti-smuggling initiatives, and migration containment.
Such arrangements work for donor governments, for which migration has become a major domestic political issue. In fact, donor governments measure the success of such arrangements almost entirely by the reduction in migration pressures they face, with little, if any, regard for the impact on developing economies. This should be recognized for what it is: the use of development policy as a security tool.
Mobility can be a powerful driver of development. Workers who leave often send back remittances—the largest source of external financing for developing countries—and return with newly acquired expertise, connections, or resources. More broadly, cross-border flows of goods, money, technology, and people, as well as participation in international networks, are vital to productivity, human-capital development, and entrepreneurship.
Harnessing this potential should be a central objective of migration arrangements and development cooperation more broadly. Instead of merely financing the containment of migration, European and other donors must work with their developing-country partners to devise frameworks that include legal migration pathways, skills partnerships, productive cross-border investment, and support for structural transformation.
No one denies that donors’ geopolitical needs, economic-security concerns, and commercial interests should be a factor in development cooperation. They always have been, and always will be. There is good reason for this: meeting donor countries’ own priorities makes the system more politically sustainable. But allowing for indefinite dependency is not an end goal. Creating conditions for transformation in developing economies is.
The DAC reviews offer an opportunity to confront this challenge, and it is up to developing economies in Africa and elsewhere to make this clear. Instead of allowing themselves to be treated as mere objects of donor adaptation, these countries must remind their development partners that the effectiveness of support cannot be assessed solely according to donor priorities. Instead, it should be measured by the extent to which it helps countries build productive capacity, diversify their economies, improve their technological capabilities, create good jobs, and shape their own development trajectories.
Developing economies must articulate the conditions under which such support can advance structural transformation. Unless they do—and unless donors listen—the development-cooperation system that emerges from the ongoing DAC reviews will be better adapted to the needs of developed economies in the 21st century, but no better equipped to deliver on its original promise: enabling developing economies to achieve self-sufficiency.
Copyright: Project Syndicate, 2026.
