Horizon 2025: creative destruction in the aid industry

The paper focuses on one such disruptor for each of these three complementary rationales for development cooperation. The key disruptor we discuss in the first area is high-impact philanthropy and non-governmental giving channels; in the second, South–South cooperation combining trade and finance, and blended public–private funding in general; and in the third, the power of climate change finance, particularly its quite different country and project allocation logic.

From this analysis, this paper explores how far some of today’s major development agencies are likely to be exposed to the resulting pressures to change course, emulate the disruptors or face irrelevance. The authors construct an index of vulnerability, presented in a traffic-light ranking, based on recent shares of each agency’s operations going to, first, middle-income and low poverty gap countries and, second, purposes linked respectively to social welfare, growth and global public goods, with appropriate weights. These assessments are offered not as predictions but as possible stress test tools for further, context-specific analysis. The paper ends with questions for further research.

Overseas Development Institute 2012

The Overseas Development Institute (ODI) is the UK's leading independent think tank on international development and humanitarian issues.