There have been a number of pieces recently on the future of aid (including mine). Most of these pieces agree recent shocks to the aid sector have been structural, and consequently, the entire way we conceive of and deliver aid needs a total rethink. The UK is hosting the first donor conference later this year to hopefully bring these conversations together and plot a path forward. So if we’re all agreed aid needs to change, what’s standing in the way for bilateral donors? If the solution is largely evident, why do donors find it so hard to pivot?

Donors don’t know which way this is going – it’s clear something big and structural has changed, but will the result be a milder version of the Brussels consensus, a fragmentation of aid, or a major paradigm shift? Donors are, to a certain extent, sticking their fingers into the wind and trying to gauge which way it is blowing. 

Bandwidth problems – It is not just the aid system that is collapsing. It is the international order, for better or worse. Foreign and finance ministries are dealing with a host of significant challenges that are consuming nearly all bandwidth, especially in smaller governments. From US tariffs to Ukraine, from NATO defence spending targets to domestic cost of living crises, governments are overwhelmed with the existing challenges they face. Many have also undergone elections and political transitions in the last year, and so are grappling with staffing up and finding their feet

Bilateral donors are big ships – Turning to address new realities happens slowly, and it can only happen once. Bilateral donors are not nimble, and they cannot zig and zag. Their backend systems, bureaucracy and legal requirements mean that if they’re going to pivot to respond to an aid collapse, they largely need to wait out the collapse, see what’s left after, and pivot to that new reality. They simply aren’t nimble enough to adjust multiple times over several months

First Mover Problem – As donors try to understand short, medium and long term impacts of aid system collapse, they’re also trying to suss each other out. There’s a reluctance to be the first mover, and some donors simply don’t have the significance or legitimacy within the system to be that first mover.

Wider Political Context – the aid system does not sit in isolation. For many donors, any foreign policy move is being lensed through potential implications for the relationship with the US, their position towards Ukraine and Russia, the role of China, and more. This is a high-risk environment, with constrained fiscal resources, and a range of views across donor countries on how to deal with common challenges. For many donors, aid budgets are also being cut explicitly in order to fund increased defence spending

Domestic political shifts – Any changes to aid policies need to be explained to domestic populations, in a context when many populaces have moved rightwards and there is a low general public understanding of aid. This makes politicians skittish. Opening up a public debate on aid seems like giving far right or populist opposition parties a home run. There is very little upside to political leaders, and a considerable amount of risk

Lack of Technical Capacity – finally, even when foreign or development ministries agree with the need to shift aid policies, many of them lack the technical knowledge to programme and measure aid in this way. They worry about the optics of aid misuse or the political risk of fraud or human rights abuses. Measuring progress for entirely new aid spends needs totally different metrics and logframes. Many ministries/agencies have experts on health, climate, sexual and reproductive rights, gender, or agriculture, but fewer economists or experts who can help them spend aid in a way that drives country-level economic growth, or incentivizes domestic resource mobilisation, for example 

This is not to excuse donor governments in their responsibilities, or to provide cover for what looks like moral hedging or dithering. It is simply to explain likely thought processes from donor perspectives.