Looking into the different approaches to development cooperation, Gemma Pinyol Puig explains the divide between the US and the EU. With geopolitical dynamics evolving, she argues Global South governments may assert even greater control over what happens in their countries, while the EU will need to adapt its cooperation approach accordingly.
Global aid actors were shocked by the sudden USAID cuts under president Trump, but in Europe, changes have already been unfolding over the past decade. While the US recently agreed to continue with 17% of prior aid projects the previous landscape of global development cooperation will not return. This shift has left millions without access to essential health and education services, will exacerbate existing humanitarian crises, and has created a geopolitical void with far-reaching implications. While actors from the Global South are developing their own analyses on how this should be a wake-up call for change at the overall or sectoral levels, the EU should do the same. Reflecting on its own practices, the EU should listen, dialogue, forge and reinforce international, national and local partnerships.
Common interests, divergent approaches
Despite often being seen as part of the collective West, the EU and the US approaches to aid management have differed for some time despite sharing similar goals. Both share broad strategic interests beyond economic development and poverty reduction in their policies, including promoting democracy, securing borders, facilitating trade and ensuring access to natural resources. In 2023, the EU (the European Union institutions and member states) accounted for 42% of global official development assistance, making it the world’s largest official aid provider, while the US contributed 30%. Both actors employ particular budgeting methods, channelling aid through geographic and thematic programmes that frequently target the same countries and sectors, such as governance, health and gender equality. However, fundamental differences in their political systems and decision-making structures result in competing approaches to aid implementation.
US foreign aid spending and policy were traditionally shaped by Congress, where sceptical US lawmakers often scrutinise funding allocations, demanding clear alignment with national interests or dedicated funding for specific ‘pet’ humanitarian projects. This has resulted in a much higher degree of earmarked interventions and a preference for aid that directly supports US geopolitical, health and economic priorities, as well as specific humanitarian concerns. Concretely, USAID’s development cooperation strategies at the country level were largely developed by USAID staff in Washington, with consultations with local stakeholders occurring only in later stages, after key priorities and even programmes had been determined.
Additionally, USAID heavily relied on US contractors and hybrid non-profit organisations, reinforcing its economic interests. The US approach also allows for rapid engagement and scale-up in supporting democratic transitions but equally swift withdrawal when political conditions change, as seen in Afghanistan. The new Trump administration approach stated, “The United States foreign aid industry and bureaucracy must be aligned with American interests and promote American values. It is the policy of this Administration that all foreign assistance must make the American people safer, stronger, and more prosperous” which is in line with the America First overarching policy.
Conversely, the EU, while not without its own problems, has engaged more directly with national stakeholders and channelled more aid through public institutions than the US. The EU institutions’ aid programming traditionally involves political and policy dialogues between EU delegations and national authorities, resulting in more transparent, publicly accessible documents (e.g. Joint Programming documents, Multiannual Indicative Programmes and Action Plans) than the US. These mechanisms seek to ensure at least some level of better policy coherence, better coordination among EU member states and alignment with national policies. Significant critiques remain on how influential and meaningful these EU consultations actually are, yet they are a different approach from the US as they come at an earlier stage.
While the EU has clear preferences for sectors and modalities, unlike the US, the EU primarily partners with national institutions and local civil society organisations, fostering longer-term relationships and policy integration. Despite its democracy assistance, its impact remains modest. Studies suggest that EU aid is more consistently associated with democratic progress compared to US assistance. However, internal fragmentation remains a challenge, as differing priorities among EU member states and their own agencies can weaken in-country ownership, coordination and collective impact, despite attempts at a more unified Team Europe approach.
Additionally, under the Global Gateway strategy 2.0, the EU plans to shift toward a more strategic (for it), top-down regional approach, often favouring European actors, which could make aid finance less aligned, predictable and transparent than its traditional long-term development planning with national partners was.
The impact of disjointed EU and US approaches
These contrasting approaches have historically discouraged effective in-country coordination between the EU and the US. Communication has largely been informal, driven by individual staff initiatives rather than institutional frameworks. As a result, aid efforts in recipient countries are often segmented – some aid-supported sectors are dominated by USAID, others by the EU institutions or its member states – with partners divided into separate funding streams. This has fostered competition among civil society organisations (CSOs) and, in some cases, between CSOs and national governments, leading to fragmented US-EU aid support even when pursuing similar objectives. While sometimes this fragmentation has assisted national authorities in maintaining control and ownership, at other times, it has made achieving results more difficult. Yet even if it seems some US aid might be retained, it is unlikely to be for support to the ‘soft’ governance, civil society, democracy and gender equality of the past.
A new environment for the EU’s global development cooperation
The shifting geopolitical landscape presents both risks and opportunities for the EU’s development cooperation. The rise of far-right political movements within the EU, heightened security and migration-related concerns, ODA spending on asylum seekers within the EU and recently, the collapse in US-European security guarantees and the Russian war in Ukraine have triggered significant cuts in development aid. There are concerns about how this will impact not only bilateral European spending but also the future EU Multiannual Financial Framework post 2027 that is about to be negotiated.
The review of EU aid priorities is steering focus toward trade and alternative financing mechanisms such as blended finance and loans. Meanwhile, the EU’s slow and uncoordinated response to the USAID funding freeze, alongside broader shifts in its cooperation strategy, has raised concerns among developing partner countries about its reliability as a donor and relevance as a genuine development partner.
This shift creates opportunities for China, Gulf states and other actors, whose financing models – often focused on large-scale infrastructure projects developed without transparency or explicit pro-democratic conditions – have gained significant traction. Amid a broader global trend of democratic backsliding, including within the EU and the US, concerns are growing that democracy-related issues may receive less emphasis. This makes it crucial for the EU to redefine its role as a credible, strategic, and long-term partner that aligns with the priorities of national and local actors and supports democratic oversight.
To forward its role as a reliable global development actor in a rapidly changing environment, the EU should capitalise on its strengths in in-country coordination and long-term engagement.
Strengthening partnerships for smarter engagement
To forward its role as a reliable global development actor in a rapidly changing environment, the EU should capitalise on its strengths in in-country coordination and long-term engagement. This requires leveraging its existing and newer frameworks – such as the Global Gateway strategy, flagship programmes and the Team Europe approach – to build broader alliances beyond EU member states that respond to developing countries’ interests, including beyond the national government.
- Expanding smart engagement with pro-democratic actors: The EU should integrate philanthropic organisations and private sector actors who also wish to see democratic standards into its development efforts to mobilise additional resources and expertise.
- Prioritising long-term local partnerships: Investing in understanding and supporting smartly the most influential national and regional stakeholders who are concerned with democracy.
- Enhancing responsiveness and agility: The EU must address perceptions of slow and bureaucratic aid delivery by streamlining its decision-making processes and increasing its capacity for rapid response in crisis situations beyond humanitarian aid.
- Deepening partnerships with like-minded international actors: The EU should strengthen ties with those that share values and approach Canada, Australia, the UK, Japan and Norway to establish. A coordinated approach can reinforce democratic governance, civil society, fragile states, climate action, gender and social inclusion agendas that are not generally shared by other geopolitical actors, including the current US administration.
Conclusion
Ultimately, as geopolitical shifts unfold and European aid along with USAID declines, Global South governments may assert even greater control over what happens in their countries. In response, the EU will need to adapt its cooperation approach accordingly.
About the Author
Gemma Pinyol Puig is an independent consultant and former ECDPM staff member who, for the last 15 years, has worked across the development sector, including on EU and USAID initiatives and projects in Africa, Asia, Pacific and Eastern Europe.