In light of the dismantling of USAID by Donald Trump and Elon Musk, Ivica Petrikova and Melita Lazell offer five recommendations for how UK foreign aid can find a new approach that will help increase the country’s soft power. While the UK can’t plug the gap left by USAID, through foreign aid it can build new partnerships and increase its global influence. 

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While President Trump and Elon Musk are closing down USAID, the new UK Labour Government have indicated their willingness to “turn the page” with a new approach to international development. The UK’s merger of the Department for International Development with the Foreign and Commonwealth Office in 2020 and reduction of development aid provision from 0.7 percent of Gross National Income to 0.5 percent in 2022 led to a significant loss of British soft power. With the abrupt closure of USAID, the same is likely to happen to the USA’s global influence on a much grander scale. This withdrawal of the USA from engagement with the Global South, however, also creates an opportunity for the UK to again deepen its relationships with Global South countries, build equitable partnerships, and re-capture some of the soft power lost over the last decade.

While the UK is not in a position to fill the gap left by the dramatic reduction in USA development aid, it does have a role to play in building partnerships and global influence in the face of the USA’s retreat from a progressive foreign policy agenda

We recommend a new approach that has five dimensions: 1. Recognise the complexity and contested nature of global development and the limits of development aid, 2. Reconsider the use of private-sector instruments for channelling aid, 3. Prioritise areas with clearer links to positive sustainable outcomes, 4. Adopt a partnership approach to global development, and 5. Work to minimise the negative side-effects of development interventions and improve policy coherence for development. This way, UK aid could contribute to building more equal and respectful relationships with governments and communities in what are called “recipient” countries in the Global South. The soft-power benefits of aid, which have been undermined in recent years, would, we believe, also accrue from this approach. While the UK is not in a position to fill the gap left by the dramatic reduction in USA development aid, it does have a role to play in building partnerships and global influence in the face of the USA’s retreat from a progressive foreign policy agenda.

1. Recognise the complexity of global development and limits of development aid

Development interventions often have unrealistic objectives and frequently fail to bring about any significant or sustainable benefits. This is particularly true of programmes and projects closely connected with UK national or commercial interests. In this light, we suggest recognising the key limitations of development interventions and learning the lessons of programme failure as a good point of departure for the UK Government seeking to design a new development approach. Making this change may be hampered by the potential “weaponization” of mistakes, made in UK aid programming by the anti-aid press and politicians. However, if the Foreign, Commonwealth and Development Office (FCDO)  can become a safe space for recognizing failure and learning lessons, we expect to see improvements in development outcomes.

2. Pause and review the use of private-sector instruments to channel development aid

Between 2018 and 2021, the UK channelled a larger proportion (22.1 per cent) of its official development assistance (ODA) through private sector instruments (PSI) than any other Development Assistance Committee member.

Development interventions often have unrealistic objectives and frequently fail to bring about any significant or sustainable benefits.

There are four central concerns regarding this increasing use of PSIs. First, PSI investment is skewed towards middle-income countries, at the expense of low-income countries, as they offer better investment and return opportunities. Second, there is a lack of transparency and monitoring of private sector instruments , leading to poor outcomes for health and human rights violations and third, there are concerns that the use of PSIs increases tied aid (i.e., aid that must be spent on donors’ products/services). Finally, the effectiveness of PSI ODA in reducing poverty is questionable. We therefore recommend that the UK pause and review its use of PSI for channelling ODA.

Refocusing aid to areas that are more likely to have a positive development impact and away from in-country refugee costs must be at the same time underpinned by a new approach to working with partners in the Global South.

3. Prioritise aid provision to areas of relative strength

The UK should focus on maximising positive outcomes in its development strategy. Our analysis shows that aid projects closely tied to UK national interests—such as strengthening security or boosting commercial ties—often undermine local ownership and sustainability. In contrast, interventions like family planning and food assistance, which are less connected to national interest, generally gain stronger local support and produce better outcomes. To improve aid effectiveness, the UK could, for example, prioritise humanitarian assistance or invest in global public goods, such as communicable disease control or climate change mitigation, which benefit all people. Refocusing aid to areas that are more likely to have a positive development impact and away from in-country refugee costs must be at the same time underpinned by a new approach to working with partners in the Global South.

By understanding development as a universal endeavour, the UK can foster more equitable relationships and work collaboratively towards sustainable development goals.

4. Adopt a partnership and peer-to-peer approach to development assistance

Our fourth recommendation is to reframe aid “recipients” as “partners” and “peers” in development efforts. The FCDO should strengthen the localisation of its aid programmes and promote peer-to-peer learning. A partnership approach would involve recognising the enduring impact of colonial history and addressing power imbalances between the Global North and South. It would also acknowledge that development challenges, such as the climate crisis and inequality, are global and affect all countries. By understanding development as a universal endeavour, the UK can foster more equitable relationships and work collaboratively towards sustainable development goals.

5. “Do no harm” and improve policy coherence for development

While development projects should not harm their intended beneficiaries, our analysis found several instances where UK aid programming had unintended negative consequences, such as inflating local prices, weakening institutions, and straining bilateral relations. These impacts reflect broader challenges within the current aid system. We recommend investing in local research capacity, conducting more rigorous political-economy analyses, fostering equitable partnerships, and ensuring that aid does not discourage tax reforms. Crucially, UK policies in non-development sectors, such as enabling illicit financial flows and arms exports, often undermine its development efforts. Greater policy coherence for development is needed to avoid these contradictions and ensure positive outcomes. 

If UK aid is re-configured in line with our recommendations, it will contribute to building a fairer and more equal world. Given the dismantling of USAID, that is of greater urgency than ever.

All articles posted on this blog give the views of the author(s), and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science.

Image credit: Philip Yabut in Shutterstock 

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