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Development for what? The evolving objectives of global development governance


The idea that the economic advancement of poorer countries and the promotion of living standards for the citizens of these countries ought to be pursued at a global level came about gradually. Today, however, it is more or less undisputed, and development governance is now conducted by a wide variety of actors and institutions, including financing institutions, international organizations, non-government organizations, private initiatives like non-governmental organizations, and unilateral state-sponsored aid.

Though there is some disagreement among scholars over the concept’s inception, the interest in international development gained ground after the second World War. Though some early proponents of the idea had humanitarian objectives of improving peoples’ lives, many (if not most) policymakers in advanced economies came to support global development efforts for security and economic reasons.

Between the establishment of the first international development institutions at Bretton Woods and today, a great deal has changed. Though, for decades, development governance was driven and funded by the so-called Bretton Woods Institutions – the International Monetary Fund and the International Bank for Reconstruction and Development (the World Bank) – alongside a few long-standing regional development banks, these institutions now share an increasingly crowded field with other institutions and actors. New investment banks such as the Chinese-led Asian Infrastructure Investment Bank (AIIB) have recently become major development actors throughout the globe. Additionally, China’s Belt and Road Initiative is a major connectivity and development project that aims to create a transportation link between China and Europe, putting in place crucial infrastructure in countries along the route.

Moreover, the drivers and conditions for development have evolved over time, responding to geopolitical and economic changes and as new actors enter the governance field. The mainstream approach to development pursued by advanced economies and led by the World Bank started as a post-war focus on reconstruction and the mitigation of the negative effects of economic growth through social protection. This early approach gave way in the mid 1970’s to the neoliberal Washington Consensus that advocated for a roll-back of explicit and intentional development intervention under the assumption that development would be an automatic byproduct of the economic growth that would result from freer markets. For much of its history, then, development governance largely consisted of supporting developing countries ability to “stay in business”, by providing conditional economic assistance that required the recipient country to make a series of structural reforms designed to liberalize and integrate its market into the global economy, reduce government spending, limit the role of the state as a development actor.

But the “East Asian miracle” of the early 1990s offered evidence that an alternative approach to development – one that involved heavy intervention by the state – could lead to significant economic growth, poking holes in the sanctity of the neoliberal model. The Washington Consensus was further, and most seriously, undermined 15 years later by the Global Financial Crisis, which cast doubt on the Bretton Woods Institution’s legitimacy. At the same time, the epicenter of economic dynamism had moved to the emerging and industrialising countries of the global East and South, while economic growth rates in the West stagnated or declined.

In response, the mainstream approach to development shifted to place more emphasis on sustainability and social inclusion and to recognize the possibility of multiple paths to development, or “developmental pluralism”. Today, much of the development governance regime has united around the need for ‘sustainable development’ and now frames its objectives in the terms of the United Nations Sustainable Development Goals. The Sustainable Development Goals predecessor – the Millennium Development Goals – marked a major shift in development governance, representing a worldwide alignment on a set of development targets that have effectively become nearly universal development norms.

However, the increasing influence of alternative approaches to development has made it more challenging for the “traditional” leaders to maintain their normative authority and pursue their objectives. With the Belt and Road Initiative, the establishment of the Asian Infrastructure and Investment Bank and as a major provider of development assistance worldwide, China has become a leader in development governance. China’s “no strings attached” approach to providing development assistance to other countries is a marked departure from the approach of the traditional (Western) institutions that tie assistance to a set of reforms, including social, environmental and good governance benchmarks. Moreover, South-South Cooperation arrangements have emerged as a new development strategy led by emerging economies from the so-called ‘Global South’ as an alternative to traditional North-South cooperation, applying alternative principles and mechanisms for development. Finally, non-state actors have increasingly engaged in development governance in recent years – with both non-government organizations and multinational enterprises taking on a variety of roles and pursuing a range of objectives in global development governance.

Kari Otteburn is a researcher in political economy, corporate accountability, and labour rights at the Leuven Centre for Global Governance Studies at KU Leuven. She is GLOBE Research Fellow at KU Leuven.