(Süddeutsche Zeitung, September 29, 2025)

Nils Althaus

The United States led the way. Now other countries—including Germany—are following, cutting foreign-aid programs around the world. What comes next? Economist Rachel Glennerster says one thing matters above all.

Rachel Glennerster is president of the U.S. think tank Center for Global Development. She was previously an economics professor at the University of Chicago and chief economist at the United Kingdom’s Foreign, Commonwealth and Development Office.

Süddeutsche Zeitung: The international aid system is being gutted. Many donor countries are making deep cuts. In July, the United States—previously the world’s largest donor—dissolved the U.S. Agency for International Development (USAID) and eliminated 80 percent of its aid programs. What does this mean in practice?

Rachel Glennerster: Some developing countries will lose as much as six percent of their annual income because of these cuts. That is enormous. In individual sectors, the effects are even worse. The United States placed a strong emphasis on HIV. Many people have already lost access to HIV medication, and many more will follow. The United States has also triggered a free-rider effect: By normalizing these cuts, it has given other countries moral permission to do the same.

Who will suffer the most?

Not countries such as Indonesia or India, which have relatively effective governments and can shoulder most of the burden themselves. The loss of aid will be felt most in places where governments are failing or wars are being fought.

So the weakest will be hit hardest?

Yes. People with HIV, tuberculosis, or malaria, as well as people suffering from malnutrition.

Germany is cutting aid, too. Its humanitarian-aid budget is expected to be cut in half in 2025. What does Germany lose as a result?

The most important loss is human lives. Germany may not feel any direct effect on its own prosperity, at least not immediately. But it is in everyone’s interest to live in a world whose countries cooperate, trade, talk to one another, and solve global problems together.

Why are governments cutting aid so aggressively now?

I think it is part of a global turn toward populism. People know very little about development aid or the world’s poorest regions. They can easily be persuaded by populist rhetoric claiming that aid is being wasted and that these countries do nothing for them. The fragmentation of the media also plays a role. Newspapers and television once devoted extensive coverage to earthquakes and famines, such as the Ethiopian famine of 1984. Today, fewer and fewer people get their information from television. They no longer see the need.

You have called for radically simplifying foreign aid — particularly now that budgets are collapsing. What would that mean?

Simplification means working in fewer countries, running simpler programs, and operating at a larger scale. New programs always entail high startup costs. Instead, we should identify the best programs and scale them up. That way, more aid reaches the people who need it.

Isn’t continuity important, too? Germany’s development minister, Reem Alabali-Radovan, has repeatedly emphasized that Germany wants to remain a reliable partner.

Simplification and continuity are compatible. We do not need a radical overhaul — just a focus on what matters most.

If we decide in advance which interventions are best, how do we ensure that the people affected have a say?

Countries decide for themselves whether they want to use what we offer. We provide only the things we are good at, and they decide whether to adopt them and, if so, which ones.

Shouldn’t it work the other way around? Shouldn’t the people affected first identify their most important needs and then approach aid organizations?

That is how most development agencies operate today. They have teams in the countries where they work. The government identifies its priorities, and then the roles are distributed. China builds good roads, so a government might turn to China for roads and approach Europeans or Americans for something else.

The least paternalistic approach would be simply to give people money. They could then decide for themselves what to do with it.

In many cases, that is an excellent approach.

When isn’t it?

When functioning markets do not exist—for example, in extremely remote places where there is nothing people can buy with the money. Funding innovation is often even more effective than giving people cash. Developing vaccines, for example, produces enormous benefits. But people living in malaria regions cannot pool their money to develop a vaccine. That has to be done centrally.

Are there any successes that can be attributed directly to foreign aid?

There are many. Consider Indonesia, where subsidized rice was distributed to poor households. The assistance passed through many layers of government, and resources were lost along the way or ended up in the wrong places. Working with the government, researchers designed a simple system using identification cards that specified how much rice each household was entitled to receive. As a result, 26 percent more rice reached the intended households without any increase in overall spending. The identification-card system was eventually expanded to cover 65 million people. Another major success: Between 2000 and 2015, an estimated 6.2 million fewer people died from malaria, thanks to the distribution of insecticide-treated mosquito nets and other aid measures.

Yet Western aid spending continues to attract criticism. Right-wing politicians argue that it achieves little or even causes harm — and that it encourages corruption.

The data show that only a vanishingly small proportion of aid money is stolen. If anything, we spend too much trying to prevent theft. Of course, there are individual cases that are painful. In conflict zones, food aid can be intercepted by armed groups and politicized. That is a difficult problem to solve, but the humanitarian community is working intensively on it. One response is to “flood” an area with so much food that no one group can monopolize it, as has been proposed for Gaza. Another is to transfer cash directly to people’s mobile phones rather than sending truck convoys carrying goods. That prevents the aid from being intercepted. Overall, however, the social benefit produced by foreign aid for every dollar spent is enormous.

What do you make of the criticism that foreign aid is a legacy of colonialism and creates dependency?

That criticism still treats developing countries like schoolchildren who can simply be pushed around. But they have far more expertise than they once did. They know what they want and see themselves as partners. When I speak with the Indian government, it is extremely self-confident. The power dynamics are different in very poor and fragile states. But even they often have clear ideas about what they need. In those places, we are usually trying simply to prevent immediate suffering.

Given the cuts, can foreign aid still be saved?

Even with a shrinking budget, we can achieve more by concentrating on the most effective interventions. Gavi, the Vaccine Alliance, and the Global Fund to Fight AIDS, Tuberculosis and Malaria run highly effective programs. We need to protect the core of those programs and make savings in the less effective programs around them.