VoxDev Event: The future of foreign aid

This webinar drew on Rachel Glennerster's blog on radical simplification and Stefan Dercon's writing on embracing political economy.

In this VoxDev webinar, Rachel Glennerster and Stefan Dercon discuss how foreign aid must evolve in response to budget cuts and changing political dynamics. The conversation focuses on improving aid effectiveness, reducing complexity, and aligning with local political realities.

Simplify aid and scale what works

Glennerster advocates for radically simplifying aid delivery by focusing on a small number of proven, cost-effective interventions delivered at large scale.

“Aid agencies […] should focus on a few things that are highly cost-effective and do them at large scale.” Glennerster

She argues that current aid programmes often bundle too many components together, making them harder to manage, evaluate, and communicate to the public.

Stop making aid indispensable

Dercon expresses concern that aid remains essential for delivering basic services in many countries, even after decades of engagement.

“It shocked me how after essentially doing for 60 years the aid business, how indispensable we had made ourselves.” Dercon

He warns that when donors fund services such as health and education directly, it can undermine domestic accountability and long-term development.

Match interventions to political realities

Both speakers agree that effective aid must consider the political incentives of recipient governments. Glennerster emphasises the importance of choosing sectors and countries where there is clear alignment between donor expertise and government priorities.

“You’re trying to find a match between what you’re good at providing as a donor… and what is in the interests of a given government or bureaucracy to do.” Glennerster

Better donor coordination through specialisation

Both argue for improved coordination between donors. Glennerster notes that if each donor focused on fewer countries and sectors, coordination would be easier and more effective.

“If we specialised more and worked in fewer countries, then you would have to coordinate many fewer donors in any given sector in any given country.” Glennerster

Use broader forms of evidence

One potential concern with a radical simplification framework is that it could lead to important areas, where cost-effectiveness evaluations are more challenging, receivnig less funding. Glennerster argues that aid decision-making should use a range of evidence beyond randomised trials.

“There’s a lot of forms of evidence that you can use to look at things that are not RCT-able.” Glennerster

She argues that infrastructure, violence prevention, and similar areas can still be assessed rigorously, even if not through experimental methods.

Don’t over-politicise aid

Both speakers address the growing trend of tying aid to domestic political benefits. Glennerster warns this can erode public trust in aid.

“You risk undermining people’s faith that aid actually helps the poorest if you get into making it too kind of self-interested.” Glennerster

Dercon adds that arguments linking aid to jobs or migration reduction are often ineffective and unsustainable.

Make aid complementary, not controlling

Dercon concludes by calling for a shift from donor-led programming toward supporting local systems where the political will exists.

“We have to be much more willing to be… dispensable, complementary for scale and then trying to be selective, not parallel.” Dercon

Glennerster agrees and highlights the importance of bilateral donors continuing to fund global public goods, like research and innovation.