Centre for Public Policy

Blog by Professor Bernhard Reinsberg, Dr Cecilia Corsini, and Dr Giuseppe Zaccaria

This blog is the first of a two-part series. The second part explore how the aid sector should respond.

It appears there currently is no day without new events sending political shockwaves. Since Donald Trump was re-elected into the Oval Office, he has been following through on his announcements to retreat from the institutions of the liberal-internationalist order that the United States once created. He pulled out of the Paris climate agreement, just like at the beginning of his first tenure. He also exited the World Health Organization (WHO), which could reduce its total budget by a fifth.

These attacks on international development organizations are a recurring issue—and by no means limited to the United States. Likewise, swings in aid policy are not uncommon as governments with different ideological preferences take office. In the US case, the (infamous) Mexico City policy is a case in point: all incoming Republican presidents have halted US aid programs supporting family planning. However, the near-complete dismantling of the United States Agency for International Development (USAID), the primary agency for US foreign aid, is unprecedented. The intended result might be that the US government ceases to manage foreign aid as part of its official duties.

One can only speculate about the motivations for this radical move. Some believe that this is an ideological crusade against foreign aid. Even if USAID is not perfect, it has established a strong track-record of promoting development and advancing US interests. For US governments, foreign assistance has been a sound, strategic, and low-cost investment for a prosperous and peaceful future. It is therefore unlikely that concerns about under-performance have motivated the decision to dissolve the agency. At the same time, it is true that the United States has been the most generous contributor to the multilateral system. The US pays 25 percent of the UN peacekeeping budget and contributes substantially to many UN development agencies. Through its bilateral aid programs, the US spent $57.3 billion in 2023 on projects in poor countries—supporting child nutrition, preventing the spread of communicable diseases, and strengthening civil society. For decades, the US invested heavily in foreign aid, recognizing its value in a US-dominated global system. But the rise of a multipolar world has changed the equation. The US is now reassessing its commitments, recalibrating its investment to reflect the diminished leverage and altered strategic landscape. This is essentially a rational adjustment to a shifting balance of power.

Whatever the motives, the sudden stop of USAID operations ordered by the US administration caused massive havoc. Thousands of USAID staff received stop-work orders and so far over 1,600 staff have been made redundant. Estimates are that around 50,000 jobs might be lost, including in US companies from which USAID procured essential services. More disturbingly, the freeze of funds has led to many USAID programs being cut, with funding partners facing severe financial woes and laying off staff, many of them in developing countries. Meanwhile, health commodities worth over $150 million have become stranded in warehouses, denying live-saving interventions to about 500,000 people affected by humanitarian emergencies. In total, 23 countries are expected to lose over 1 percent of their national income if USAID funding continues to be withheld.

The damage extends beyond the recipients of US aid: it also undermines the US itself—its institutions and its global standing. What is at stake is the rule of law in the United States—as the Trump administration has both circumvented Congress and repeatedly ignored court orders to unfreeze frozen funds. The sudden freeze of funds has also shattered the international reputation of the US in the eyes of its recipients. For example, Ghanaian president John Dramani Mahama, whose administration was forced to cut $156 million for education, health, and economic development, said: “One thing the US will lose is that soft power it has wielded in the world.” He added, “as bridges are burning, new bridges are being formed.” Emerging powers are waiting to cross those bridges. A recent study documents how autocratic states increasingly seek to buy influence to bolster their soft power in developing countries. From a geostrategic perspective, US aid withdrawal is a short-sighted move that will ultimately strengthen its geopolitical competitors—thereby contradicting a key goal of the Trump administration in its stance against China.

This blog is the first of a two-part series. The second part explore how the aid sector should respond.

Authors

Bernhard Reinsberg is a Professor of International Political Economy and Development in the School of Social and Political Sciences. His research is on the policies and politics of international organisations and foreign aid more generally.

Cecilia Corsini is a postdoctoral research associate in the School of Social and Political Sciences. Her research interest is in international organisations, specifically on competition between United Nations agencies in humanitarian assistance.

Giuseppe Zaccaria is a postdoctoral research associate in the School of Social and Political Sciences. His research interest is on challenges to international organisations, particularly in development, finance, and trade.

^{Preview image by Donghun Shin on Unsplash}

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For more information, contact public-policy@glasgow.ac.uk .

First published: 10 March 2025