Development Finance in a New Era: The Financialisation of Global Aid

As traditional overseas aid drops to historic lows, is the growing reliance on private sector instruments a genuine solution or a geopolitical pivot? This episode investigates the increasing financialisation of development cooperation, exploring how aid is being channelled through development finance institutions (DFIs) to crowd in private capital, and what this structural shift means for accountability, transparency, and state capacity in the Global South. In the second of a three-part bonus series of *Global Aid Rethink*, hosts Ivica Petrikova (Associate Professor in Politics and International Relations, Royal Holloway, University of London) and Melita Lazell (Associate Professor in Political Economy and Development at the University of Portsmouth) return to examine the stark realities of a changing global aid landscape. Joining Ivica and Melita for this conversation are Paddy Carter, Head of Development Economics at British International Investment (BII), and Luis Mah, Assistant Professor in Development Studies at the University Institute of Lisbon. Together, they explore how major reductions in core capital injections are forcing institutions like the BII to become self-financing revolving funds, and why DFIs have increasingly become primary objects of analysis, replacing traditional development agencies and NGOs on the global stage. The conversation also highlights how financial instruments are being deployed as tools of geopolitical interest - such as the European Union’s Global Gateway initiative competing with China’s Belt and Road Initiative - whilst examining the stark findings of the Publish What You Fund transparency index. Concluding the episode, the panel reflects on the future of the aid landscape over the next decade, debating whether financial inclusion serves as a core component of development or simply a means to formalise economies and build state capacity. - Read the transcript here This is a Research Podcasts production. **Episode credits:** Presenters: Ivica Petrikova, Royal Holloway, University of London and Melita Lazell, Portsmouth University Guests: Paddy Carter and Luis Mah Producer: Catherine McDonald, Research Podcasts Music: MFCC via Pixabay This podcast was generously funded by the ESRC-funded Royal Holloway Social Science Impact Accelerator * * * Hosted on Acast. See acast.com/privacy for more information.