Abstract
COVID-19 and economic responses to it have amplified and changed the nature of development challenges in fundamental ways. Global development cooperation should adapt accordingly. The focus of our analysis is on the “intelligent reconstruction” phase of 2022-2030, once the immediate stabilization of economies and the health pandemic have taken place. We look at changes in the development context that may have long-term effects: global growth, debt, budget deficits and taxes, aid, capital markets, along with poverty and vulnerability. We suggest that aid is moving beyond altruism to become an instrument of national self-interest and of better planetary management of the global commons. These new objectives for aid put more emphasis on what is happening within each country, rather than across countries. Metrics of environmental sustainability and social inclusion performance, as well as governance, will become more important determinants of aid’s effectiveness. We identify the trade-offs in using aid to simultaneously relieve debt distress and development distress, and conclude that other instruments beyond aid are needed. Prominent among these is far more ambitious use of multilateral and national development banks, and global policies to reduce capital outflows from developing countries. We encourage the delineation of areas of cooperation and competition between geopolitical rivals, to limit the tainting of development priorities with elements of “us” versus “them.”