Aid may be dead. Long live international development

Modern international aid grew out of the post-World War II reconstruction effort, most famously the Marshall Plan, and was institutionalised through the Bretton Woods bodies set up in 1944, the International Monetary Fund and the World Bank. As newly independent nations emerged from colonial rule, the OECD's Development Assistance Committee (DAC) became the main forum for tracking and coordinating Official Development Assistance (ODA) among major donor countries. The United States created USAID in 1961 under the Foreign Assistance Act to run its own bilateral aid programmes, and aid quickly became entangled with Cold War geopolitics, since donors often tied assistance to political alignment rather than pure development need.

India's own history mirrors this arc. It was itself a major aid recipient through the 1950s and 1960s, before gradually becoming a provider of development partnerships to other developing countries through Lines of Credit and technical cooperation. This shift reflects a long-standing concern in the Global South that aid, however well-intentioned, often came bundled with conditions that reduced recipient countries' strategic autonomy. At the multilateral trade level, developing countries once pushed the slogan 'trade not aid', which over time was absorbed into the WTO's 'aid for trade' formula, and later into the Doha Development Agenda launched in 2001 to place development concerns at the centre of global trade negotiations. That agenda has since stalled over disputes on agricultural subsidies and market access, but it remains a reference point for how the Global South can reshape multilateral rules through coalition-building rather than raw economic power.