Against a backdrop of rising populism, protectionism and geopolitical tensions, and a huge rollback of development assistance, this year’s Development Leaders Conference (DLC) in Hamburg, co-hosted by the Center for Global Development (CGD) and the German Federal Ministry for Economic Cooperation and Development (BMZ), brought together over 70 senior leaders from development ministries and agencies. Delegates explored the question of whether we can credibly reform the current development cooperation system, or if we need something radically different. The consensus was clear—the current system is failing. With the Fourth International Conference on Financing for Development (FfD4) in Seville just around the corner, the DLC served as an opportunity to test ideas, discuss trade-offs, and confront the realities of a system under strain.
This blog reflects on key discussions held at the conference, areas of donor alignment, and some of the questions that remain.
Broken ODA architecture, but no clear alternatives
Across the different DLC sessions, the same truth emerged: the architecture underpinning official development assistance (ODA) is crumbling. The long-hailed but rarely met target of 0.7 percent of gross national income (GNI) for ODA, looks increasingly unrealistic as domestic financial pressures mount and amid ongoing debates over equitable distribution between countries. The “spaghetti bowl” of a system is made up of fragmented, overlapping, overpromising institutions that routinely underdeliver. Participants agreed that reform must go deeper than renewed funding pledges or small fixes at the margins; the system itself needs a complete overhaul. As we head to Seville, this reality looms large.
But what that complete overhaul looks like remains elusive. For some, it entails a shift from donors to investors and knowledge providers. For others, it entails partnerships with non-traditional actors. Many questioned the relevance of the OECD’s Development Assistance Committee, referring to it an exclusive club of, and calling for it to be reshaped with impact and inclusivity at its core.
Discussions also highlighted the growing role of South-South cooperation (SSC) and triangular partnerships, which many participants viewed as essential to building a more equitable and trust-based system. Non-DAC providers stressed that SSC is often based on mutual benefit and shared responsibility, rather than conditionality. While SSC cannot replace ODA, it is reshaping how cooperation is understood and practised and needs to be better integrated into discussions on the future of development cooperation.
Unclear mandates
As ideological battles rage, austerity bites and rearmament becomes the new priority, public support for aid is in decline. Yet, arguments for aid at the service of the national interest don’t stand up. People want aid to help those who need it most—if people believe that aid “works” they are more likely to support international development efforts. But development agencies struggle to communicate the results of their interventions, battling the tension between focusing on more short-term and attributable results and investing in more long-term, transformational projects—with impacts that are harder to measure and talk about. For some, being effective (especially in an era of budget constraints) means being more targeted and specialised. But for others, effective action in an era of complex, inter-related challenges means considering and integrating more holistic agendas, including advancing global public goods.
Doing more with less: Prioritisation and concessional finance
In a context of shrinking fiscal space and growing needs, the role of concessional finance has come under the spotlight. Most agencies are downsizing and narrowing their focus, prioritising fewer geographic regions and thematic areas.. While the scope varies across agencies, there was agreement on the need to be more intentional in how to use grants. Participants discussed the challenge of aligning concessional resources with partner country priorities such as green industrialisation, debt reform, and regional value chains, while also preparing for the graduation of some countries from concessional support altogether.
The DLC also made clear that the division between development and climate finance is increasingly untenable. Participants debated how to allocate scarce grant resources, whether adaptation should be prioritised, and what role concessional tools should play in mitigation in middle-income countries. But ultimately, the bottom line was that you can’t design climate interventions that ignore development goals, nor can development programming afford to sidestep emissions.
Rebuilding trust
Trust emerged as a defining theme throughout the conference. Participants explored how geopolitical shifts, inconsistent standards, and unmet commitments have eroded confidence across the aid system. Many stressed that trust must be built not only between providers and partner governments, but also within multilateral institutions, and between citizens and the aid system.
Several participants pointed to the value of “walking the talk” by aligning funding with partner priorities and acknowledging when programmes no longer serve their intended purpose. Others called for more inclusive decision-making and governance models, building on lessons from SSC and triangular initiatives, where technical partnerships are often more trusted and responsive.
A unique moment for reflection ahead of Seville
The DLC 2025 served as a unique forum for peer exchange at a time of growing fragmentation and as a key juncture to shape, challenge, and advance the ideas needed to reimagine a more effective and equitable system.
As we turn toward Seville, many of the themes raised in Hamburg will take centre stage once again: how to reframe development cooperation for a new era, how to finance development credibly and sustainably, and how to govern collectively in a multipolar world.
