Geostrategic Axes and Transitions in Development Cooperation

By José Antonio Alonso

The international aid system is going through one of the most delicate moments in its history, largely due to its inability to respond effectively to changes in the global environment. The crisis affects the broad universe of development cooperation, but it is particularly acute in the case of Official Development Assistance (ODA), its most clearly defined component and the one whose foundations have been most eroded. The decline in Official Development Assistance (ODA) in 2025 is merely the epiphenomenon of a deeper and more structural malaise. Not only have the sources of aid’s legitimacy weakened, as noted by Molenaers, but so too have the power structures, doctrinal underpinnings, and value system upon which the aid architecture has traditionally rested.

In this context, the risk is twofold: either development cooperation slides into progressive irrelevance, driven by the reluctance of some and the indifference of others; or, alternatively, it fragments into a disordered mosaic of disparate practices, lacking a shared framework or common normative horizon. Neither scenario is desirable. Nor is a nostalgic attempt to restore the past: the world has changed profoundly, and with it the ways in which development action is conceived. Rethinking cooperation thus appears unavoidable, although it must be understood as part of the broader task of an obliged reconfiguration of the international system.

This post seeks to contribute to the ongoing discussion on the future of development cooperation initiated in this blog (with contributions from Kliengebiel and Summer, Engberg-Pedersen, Alonso, and Molenaers), by focusing on the constraints imposed by the geostrategic context.

Geostrategic tensions

The current international landscape appears highly uncertain, yet three undeniable trends are shaping the main transformations: the decline of the political and economic dominance of the Western bloc—including the United States—which has traditionally underpinned the aid system; the rise of China as a global power, with a markedly different economic and political model and its own approach to development cooperation; and the emergence of a heterogeneous group of middle powers, some from the Global South, contributing to a more complex and multipolar world.

Within this framework, the international system is shaped by three major, partly overlapping axes of tension. The first is the rivalry between the two global powers, the United States and China, which takes the form of intense competition for economic and technological leadership, as well as control over strategic markets and resources. For some observers, this amounts to a “New Cold War”, in which both powers compete for hegemony and seek to draw parts of the international system into their respective spheres of influence.

The second axis is defined by the tension between the North and the Global South—a historically rooted divide, now amplified by the growing influence of several Southern countries that have become new powers, such as China, India, Brazil, and Indonesia. This tension is driven by the aspiration to move towards a more balanced international order that gives greater voice to the interests of emerging countries in the developing world.

Alongside these dual logics, a third characterization of the international system highlights two emerging features: increasing fragmentation, as alliances and blocs once considered stable begin to dissolve; and growing multipolarity, marked by the rise of middle powers with diverse interests, many of which are uncomfortable with the rigid alignments of a bipolar world. These two features enable countries—as suggested by Carney in Davos—to build cross-cutting alliances that transcend traditional dualities, in pursuit of a more open and plural international order, grounded in rules and committed to collective progress. However, this aspiration is challenged by the growing presence of illiberal regimes, characterized by strong nationalist policies, limited respect for democratic norms, and open opposition to the objectives of the development agenda. Thus, the third axis of tension is defined by the struggle between those who defend a rules-based liberal international order, grounded in respect for human rights, and those who seek to impose a world governed by the raw exercise of power.

Options for development cooperation

While all countries must navigate these three axes, the relative importance they assign to each shapes their international strategies and, consequently, the role they attribute to development cooperation (Please see figure below).

Those who view the emergence of a New Cold War as the dominant dynamic tend to interpret development cooperation either as a politically marginal dimension—since the main arena of competition lies elsewhere—or as an instrumental tool serving strategic objectives shaped by power rivalry. Both interpretations are reflected among European donors, who are divided between those inclined to reduce their ODA budgets, thereby reinforcing a trajectory of aid decline, and those who believe that international aid can serve the bipolar contest—as it did during the first Cold War—provided it undergoes a profound conversion in its approach and content. This would involve aligning aid more directly with national interests and using it as a tool in the competition for spheres of influence, particularly vis-à-vis China (the Europen Union´s Global Gateway could be an example).

Those who prioritize the North–South divide are likely to assign a more central role to development cooperation, as it lies at the heart of this axis of conflict, and will seek to emphasize the distinctive features of traditional and South–South cooperation. Here again, donors face two alternatives. One is to pursue the aforementioned conversion of aid, adapting it to compete with the instruments used by some Southern providers—especially China—by moving beyond the narrow confines of ODA, incorporating resources with varying degrees of concessionality, intensifying the use of private sector instruments, and adopting a more transactional logic. Alternatively, donors could distance themselves from this path and instead engage in a struggle for intellectual and moral leadership, seeking to strengthen the defining features of their own practices rather than emulate others. This would entail moving towards a strengthened ODA—possibly complemented by Total Official Support for Sustainable Development (TOSSD)—preserving aid standards, reinforcing financial commitments, facilitating the inclusion of new members into the OECD and the DAC, and improving allocation criteria and effectiveness. The two options mentioned are part of the debate surrounding the current DAC reform process,  although very few countries support the second option.

The third axis of tension calls for overcoming traditional North–South and donor–recipient dichotomies, transforming cooperation into a space of engagement among all countries willing to contribute to building a rules-based international system committed to security, sustainability, and shared progress. Within this framework, two options emerge.

The first is to move towards a model of cooperation focused on managing interdependencies and providing international public goods (IPGs). The Global Public Investment (GPI) initiative aligns with this objective, emphasizing principles of shared responsibility, mutualism, and balanced participation by all countries in a common agenda. While some of its principles are compelling, the proposal faces two significant weaknesses (beyond its limited feasibility). First, there is a mismatch between agendas: not all IPGs have development impacts, and not all development objectives qualify as IPGs. Transitioning between these agendas would likely come at a high cost to the redistributive components of cooperation, which largely fall outside the IPG domain. Second, there are also configuration challenges, as it is difficult to conceive of a unified global system for IPG provision, given that each good requires distinct financing and governance arrangements—it is more an issue-based than a country-based agenda.

Inclusive and representative governance

The second option, also integrative, is to conceive development cooperation as a plural, shared, and differentiated system, open to all countries willing to contribute—both from the North and the South. Such a system would be grounded in a complex agenda reflecting countries’ diverse circumstances, yet united by the common purpose of correcting international asymmetries and addressing shared challenges. It would also accommodate different approaches to development action, while working towards the establishment of shared minimum standards and metrics.

This system would require inclusive and representative governance, ideally anchored within the United Nations. It should be built through a process of gradual convergence among existing coordination mechanisms: through the more active engagement of ECOSOC and the strengthening the mandate and resources of the Development Cooperation Forum (DCF); by pursuing institutional mergers where appropriate—for example, between the DCF and the Global Partnership for Effective Development Cooperation (GPEDC); and by establishing joint work programmes—such as between the DCF and the DAC. The result would be a form of shallow global governance, compatible with the preservation of more specialized governance structures, such as the DAC.

This is not a fanciful scenario. Some countries in the Global South might view it with interest as a means of bringing greater order to the cooperation system, enhancing their international standing, and avoiding forced alignment with any of the major powers. That latter objective may likewise appeal to certain traditional donors seeking to foster cross-cutting alliances in the field of development, in response to the rise of conservative neopopulism in the international realm.

José Antonio Alonso is Professor of Applied Economics at Complutense University, Madrid. He was a member of the recent International Commission of Experts on Financing for Development for the Seville Conference. His latest book is (with R. Gutiérrez) Pathologies of inequality in Latin America. Challenges and Consequences, De Gruyter, 2025.

Image: Mariakray on Pixabay

Note: This article gives the views of the author, not the position of the EADI Debating Development Blog or the European Association of Development Research and Training Institutes