With international aid in structural decline, W. Gyude Moore argues that developing countries must recentre their strategies around growth diagnostics, tradable-sector expansion, and legally mandated development plans – using remaining aid flows strategically rather than waiting for a return to the status quo.
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The contraction of international aid is forcing a fundamental rethink of how developing countries approach external assistance. In this episode of VoxDevTalks, W. Gyude Moore – former Minister of Public Works in Liberia – argues that the current moment is not merely a crisis but a structural turning point, and that recipient countries have both the opportunity and the obligation to respond strategically.
The scale of the aid collapse
The numbers are stark. According to IMF figures drawing on OECD data, bilateral aid to sub-Saharan Africa has fallen 16–28%, while multilateral humanitarian assistance has dropped by around 42%. The region is disproportionately affected because it remains most dependent on external financing, for health systems, education, and nutrition programmes alike.
What distinguishes this contraction from earlier episodes is the absence of any offsetting mechanism. In the past, when bilateral aid declined, multilateral or humanitarian flows typically filled the gap. This time, Moore argues, there is no fallback.
"This is correct, and that's exactly what will happen in the past. There have been episodic declines in bilateral aid, but most times then the multilateral or the humanitarian assistance sort of fills in the gap. This time there's no fallback."
Aid was always meant to end
The intellectual roots of the current aid architecture lie in post-war reconstruction. The Marshall Plan was explicitly transitional – the US would help Europe rebuild, and then the assistance would stop. That sunset clause was foundational, yet, over decades, something went wrong: the development community never seriously worked towards making itself redundant, and recipient governments became structurally dependent on flows that were never guaranteed.
Moore is direct about the shared culpability. Practitioners found it difficult to work themselves out of a job; recipients found it difficult to extend assistance without engendering dependence. Neither resolved the tension, and aid became permanent by default.
Making growth the architecture of development
The centrepiece of Moore's argument is a reorientation of development strategy. For too long, he contends, economic growth was treated as one strand among many – alongside health, education, and gender equality – rather than as the overarching framework within which all those goals are pursued.
Critically, he is not talking about growth driven by natural resource extraction. Mining and extractives are capital-intensive rather than labour-intensive, generate few jobs, and add little value domestically. The growth that matters is in tradable sectors: agro-processing, light manufacturing – activities that expand productivity across the broader economy.
"I am talking about growth in the tradable sectors of the economy, agro processing, light manufacturing, the kinds of things that expand productivity across the economy, and I think we got away from that."
Running a growth diagnostic
To make this concrete, Moore advocates for countries to commission a growth diagnostic – a structured analysis of the binding constraints on private-sector development and economic expansion. The analogy is a medical one: rather than treating everything at once, identify what is actually preventing recovery and target that.
The Millennium Challenge Corporation offers a working model, which it calls a 'constraints analysis'. The key is to keep the list short. Moore recommends identifying no more than three binding constraints – not because other problems are unimportant, but because focus is what makes implementation possible. Countries should then reorganise their budgets and government structures around removing those constraints, review progress every five years, and ensure the process is led by a credible, politically independent external party.
"If everything is a priority, we don't have priorities."
Sovereignty through analytics
A growth diagnostic is not merely a planning tool – it is a source of negotiating power. Moore describes this as "sovereignty through analytics". When a government can present development partners with a clear, independently validated analysis of what the economy needs, it shifts the terms of engagement. Donors arrive with their own priorities; a credible national plan allows recipient governments to say, in effect, here is what we are trying to do – how can you help?
This assertiveness is already emerging. Ghana, Zambia, and Zimbabwe have all rejected the US America First Global Health Strategy, and a legal challenge is under way in Kenya. For Moore, this signals a new willingness among recipient governments to refuse assistance that is not aligned with national interests, even when the amounts involved are substantial.
Embedding reform in legislation
Moore draws on his experience with Liberia's Development Alliance, an initiative that brought all active development partners into a single coordination forum. It had its merits, created visibility, reducing duplication, and revealing under-served sectors. But it also had fundamental weaknesses: it was not organised around a single strategic objective, it was voluntary, and Liberia had almost no leverage to enforce its terms.
The lesson is that effective coordination requires legal mandate. Legislation imposes discipline, signals seriousness to partners, and can constrain the opacity that has sometimes accompanied Chinese lending agreements. Countries with domestic laws requiring publication of all external agreements have a structural advantage that purely voluntary frameworks cannot replicate.
"Coming into the conversation by saying it is the law of our country, it evens the playing field, and it allows you to be able to make an argument without being overweight by a more powerful actor that you're dealing with."
The cost of inaction
The political economy of aid is shifting in ways that are unlikely to reverse. Across Europe, centre-left and centre-right parties have been losing vote share to nativist right-wing movements which have little interest in international development. Europe is also ageing, meaning a growing share of public resources will be directed inward. Together, these trends point to a secular decline in available external financing.
For countries that do not adapt, Moore warns, the window for strategic use of remaining aid flows will close before they have built the economic foundations to sustain growth independently. The countries that act now – using whatever resources remain to remove binding constraints, develop tradable sectors, and assert sovereign ownership of their development plans – will be better positioned than those waiting for a return to the old normal.