The world is facing a development finance crisis—a crisis born of political choices as much as economic realities. This year, aid budgets could shrink by as much as 17% , according to the Organisation for Economic Co-operation and Development. That decline would be more than a statistic: It would mark a dramatic shift in political will among donor countries, driven by rising fiscal pressures and a retreat from global solidarity.
Such dramatic reductions in aid translate into lives lost, weaker health systems, fewer children in school, and reduced social protections in the world’s poorest countries. Many governments in low- and middle-income countries are simultaneously being battered by debt burdens, climate shocks, and the aftereffects of pandemics and conflict.
This is the backdrop to the Fourth International Conference on Financing for Development (FfD4), where the world faces a stark choice: Will we defend the principles and instruments that have saved millions of lives, or will we accept a more unstable future in which progress is rolled back and inequalities deepen?
I am devastated to see aid to [Gavi, Global Fund,] and other critical institutions under threat at a moment of overlapping global crises.
Defending life-saving institutions
At the heart of what remains effective in development finance are institutions like Gavi, the Vaccine Alliance ; the Global Fund to Fight AIDS, Tuberculosis and Malaria ; and the World Bank’s International Development Association (IDA) . These are not relics of a past era; they are outcome-focused organizations that have collectively saved over 80 million lives. They do more than deliver vaccines and treatments —they strengthen national health systems, build local infrastructure, and support countries in charting their own path toward financial sustainability . Crucially, they direct aid to where it will have the highest return in the form of lives saved and vulnerabilities reduced.
By Ingrid Hansen, Founder & Executive Director, Ingrid Hope Foundation
I am devastated to see aid to these and other critical institutions under threat at a moment of overlapping global crises. To cut aid now is to gamble with decades of development progress. It risks reversing hard-won gains in reducing child mortality, improving maternal health , and controlling disease . The cost of retreating from development assistance will be tallied not just in lives lost and diminished but in rising instability that will echo across economies and generations.
Financial tools built for an earlier time
Much of today’s financial architecture was designed in another political, economic, and media era. So far, the 21st century is proving far more unruly. Climate emergencies, pandemics, global economic shocks, and political upheavals demand development finance that is flexible, responsive, and designed to build resilience. This means moving beyond fragmented, short-term projects to investing in strong institutions, local leadership, and sustainable systems that can absorb shocks rather than collapse under them.
A new vision for development finance
The reset we need is not just about raising more money. It’s about creating a development finance system that is better attuned to the messy realities of this century .
This system would put national and global development needs—the needs of people—at its center and embrace innovations that enable leapfrogging in development, like India ’s digital public infrastructure or Rwanda’s health financing reforms. It would view cooperation as a set of mutual commitments grounded in fairness, shared purpose, and trust—not one-way transfers.
This moment is an opportunity—one that demands courage, creativity, and, above all, a renewed commitment to the values that…can help shape a better future.
Success would be measured not by disbursement volumes alone but by tangible outcomes: fewer maternal deaths, better schools, and more robust economies.
The political will to defend aid and rethink development finance will be tested at FfD4 . This moment is an opportunity—one that demands courage, creativity, and, above all, a renewed commitment to the values that have spurred decades of progress and can help shape a better future.
