• This paper analyses the current aid crisis and its causes. It suggests that the multiplication over decades of objectives assigned to aid has prompted its fall. Expectations are not met, and the resulting trust crisis has caused criticism of aid both in donor and recipient countries. In the current state of confusion, two urgent actions are required:
  • First, restoring trust by regaining the truth about aid: this will require greater transparency about what aid is and is not, its objectives and modalities (from solidarity to investment promotion), and a stronger monitoring and accountability framework with key performance indicators aligned with assigned objectives.
  • Secondly, putting developing countries in the driver’s seat, with country development and financing strategies at the heart of the system: this will require a change of perspective on measurement and effectiveness, and impose a market approach to financing sustainable development with new mechanisms to improve market functioning and remedy its failures.

• The paper suggests adjustments to existing measurements, practices and standards, including a new role for incumbent platforms like the OECD Development Assistance Committee to take those actions forward.

• It also sheds a positive light on the future of aid that will remain a key component of any policy, even self-centric and self-interested, at the same time as it stresses the costs of delays in action and the need to get over the current aid existential crisis as soon as possible.

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