International development assistance is in crisis. The demise of USAID is the most dramatic manifestation of this crisis, but many traditional donor countries had already announced cutbacks in funding in recent years. The U.K.’s successive cuts in aid from its longstanding target of 0.7% of gross national income to 0.5% and most recently to 0.3% are part of this trend. According to the Organisation for Economic Co-operation and Development’s (OECD) Development Assistance Committee (DAC), international aid dropped by 7.1% in 2024. It will likely drop further in 2025 and possibly beyond, demonstrating the importance of reimagining international development.

Recent events remind us of the retrenchment in international development assistance in the early 1990s after the fall of the Berlin Wall. Those cuts shook up established views about aid, its architecture, and effectiveness and led to serious efforts to address longstanding concerns raised by aid critics. Now as then, we must grasp the opportunity to reimagine international development and improve its effectiveness, even as we struggle with the impacts of the current cutbacks.

Undoubtedly, the current situation is more dramatic than in the 1990s: shifts in geopolitical alignments, rising security threats, and the spread of populist political forces are now combined with severe fiscal constraints in most donor countries. These seismic shifts make it unlikely that the current cuts in foreign assistance will be reversed, giving rise to the notion that the peak of official development assistance was reached in 2023. But the pressing global development and climate challenges remain.

Now is the time, therefore, to take a hard look at international assistance to identify the most critical problems that it needs to tackle, address the shortcomings of old aid approaches, and offer a new paradigm for achieving global and national development and climate goals.

We are not alone in calling for a new approach to development assistance. Many others have done so and offered important ideas for reform of the global development finance system. Our focus is on ways to ensure that whatever development and climate finance can be mobilized in future is put to the best possible use in the pursuit of sustainable impact at scale.

Read the full article about reimagining international development by Richard Carey, Li Xiaoyun, Poonam Muttreja, and Jean-Michel Severino at Brookings.