IDEAS home Printed from https://ideas.repec.org/p/zbw/iedlwp/336687.html

Development finance at a crossroads: After Seville and beyond

Author

Listed:
  • Mavrotas, George

Abstract

Development finance is facing mounting pressures amid global economic shocks, the lingering effects of the COVID-19 pandemic, and rising geopolitical tensions. These challenges have disrupted progress toward the Sustainable Development Goals (SDGs) and exposed vulnerabilities in the current financing architecture. The 4th Financing for Development Conference, held in Seville in July 2025, marked a renewed effort to mobilize political commitment and reorient strategies to address these setbacks. Inspired by the precedent set by the 2002 Monterrey Conference, the Seville gathering underscored the need for more pragmatic, accountable, and results-driven approaches. While Monterrey succeeded in galvanizing international support for the Millennium Development Goals (MDGs), its limitations revealed that political momentum must be matched by sustained implementation and realistic planning. In today's more volatile global environment, these lessons are even more critical. As the 2030 deadline approaches, there is growing consensus that development finance must be recalibrated to reflect current realities-through adaptive, context-sensitive strategies that can maintain progress despite uncertainty. This paper examines the evolving landscape of development finance, identifies key structural and political challenges, and issues a call to action for coordinated, concrete efforts. Without such a shift, temporary financial shortfalls risk becoming entrenched structural gaps, further jeopardizing the 2030 Agenda.

Suggested Citation

  • Mavrotas, George, 2025. "Development finance at a crossroads: After Seville and beyond," Working Papers 4, National and Kapodistrian University of Athens, Department of Economics, International Economics and Development Laboratory (IEDL).
    • Handle: RePEc:zbw:iedlwp:336687
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/336687/1/iedl-wp04.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Patrick Guillaumont, 2010. "Assessing the Economic Vulnerability of Small Island Developing States and Least Developed Countries," Post-Print hal-00594797, HAL.
    2. Molenaers, Nadia & Dellepiane, Sebastian & Faust, Jorg, 2015. "Political Conditionality and Foreign Aid," World Development, Elsevier, vol. 75(C), pages 2-12.
    3. repec:bla:rdevec:v:13:y:2009:i:s1:p:510-525 is not listed on IDEAS
    4. William Easterly, 2007. "Was Development Assistance a Mistake?," American Economic Review, American Economic Association, vol. 97(2), pages 328-332, May.
    5. George Mavrotas, 2005. "Aid heterogeneity: looking at aid effectiveness from a different angle," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(8), pages 1019-1036.
    6. Hristos Doucouliagos & Martin Paldam, 2009. "The Aid Effectiveness Literature: The Sad Results Of 40 Years Of Research," Journal of Economic Surveys, Wiley Blackwell, vol. 23(3), pages 433-461, July.
    7. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, vol. 114(496), pages 191-216, June.
    8. Patrick Guillaumont, 2010. "Assessing the Economic Vulnerability of Small Island Developing States and the Least Developed Countries," Journal of Development Studies, Taylor & Francis Journals, vol. 46(5), pages 828-854.
    9. repec:osf:socarx:4urcm_v1 is not listed on IDEAS
    10. Andy Sumner & Arief Anshory Yusuf, 2024. "New estimates of the cost of ending poverty and its global distribution," WIDER Working Paper Series wp-2024-46, World Institute for Development Economic Research (UNU-WIDER).
    11. George Mavrotas, 2002. "Foreign aid and fiscal response: Does aid disaggregation matter?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(3), pages 534-559, September.
    12. Agénor, Pierre-Richard & Aizenman, Joshua, 2010. "Aid volatility and poverty traps," Journal of Development Economics, Elsevier, vol. 91(1), pages 1-7, January.
    13. Danny Cassimon & Olusegun Fadare & George Mavrotas, 2022. "The combined effect of institutional quality and capital flows on food and nutrition security and undernourishment in Sub-Saharan Africa," PLOS ONE, Public Library of Science, vol. 17(10), pages 1-19, October.
    14. Danny Cassimon & George Mavrotas, 2021. "Development Finance in the Post-COVID-19 Era: Implications, Challenges and Opportunities," Africagrowth Agenda, Africagrowth Institute, vol. 18(1), pages 4-9.
    15. Bulír, Ales & Hamann, A. Javier, 2008. "Volatility of Development Aid: From the Frying Pan into the Fire?," World Development, Elsevier, vol. 36(10), pages 2048-2066, October.
    16. Danny Cassimon & Bjorn van Campenhout, 2007. "Aid Effectiveness, Debt Relief and Public Finance Response: Evidence from a Panel of HIPCs," WIDER Working Paper Series RP2007-59, World Institute for Development Economic Research (UNU-WIDER).
    17. Mina Baliamoune‐Lutz & George Mavrotas, 2009. "Aid Effectiveness: Looking at the Aid–Social Capital–Growth Nexus," Review of Development Economics, Wiley Blackwell, vol. 13(3), pages 510-525, August.
    18. Reeves, Aaron & Loopstra, Rachel & Tarasuk, Valerie, 2021. "Wage-Setting Policies, Employment, and Food Insecurity: A Multilevel Analysis of 492 078 People in 139 Countries," SocArXiv 4urcm, Center for Open Science.
    19. Ogunniyi, Adebayo Isaiah & Mavrotas, George & Olagunju, Kehinde Oluseyi & Fadare, Olusegun & Adedoyin, Rufai, 2020. "Governance quality, remittances and their implications for food and nutrition security in Sub-Saharan Africa," World Development, Elsevier, vol. 127(C).
    20. Zattler, Jürgen, 2024. "Getting special drawing rights right: Opportunities for re-channelling SDRs to vulnerable countries," IDOS Policy Briefs 9/2024, German Institute of Development and Sustainability (IDOS), Bonn.
    21. Francesco Fuso Nerini & Mariana Mazzucato & Johan Rockström & Harro van Asselt & Jim W. Hall & Stelvia Matos & Åsa Persson & Benjamin Sovacool & Ricardo Vinuesa & Jeffrey Sachs, 2024. "Extending the Sustainable Development Goals to 2050 — a road map," Nature, Nature, vol. 630(8017), pages 555-558, June.
    22. Patrick Guillaumont, 2010. "Assessing the Economic Vulnerability of Small Island Developing States and the Least Developed Countries," Post-Print halshs-00512159, HAL.
    23. Karen L. Remmer, 2004. "Does Foreign Aid Promote the Expansion of Government?," American Journal of Political Science, John Wiley & Sons, vol. 48(1), pages 77-92, January.
    24. Danny Cassimon & George Mavrotas, 2025. "The Finance for Development (FfD) process: from bridging the (mobilisation) gap to shaping global structural transformation?," Development Finance Agenda, Chartered Institute of Development Finance, vol. 10(3), pages 6-8.
    25. David Fielding & George Mavrotas, 2008. "Aid Volatility and Donor–Recipient Characteristics in ‘Difficult Partnership Countries’," Economica, London School of Economics and Political Science, vol. 75(299), pages 481-494, August.
    26. Sebastian Edwards, 2014. "Toxic Aid: Economic Collapse and Recovery in Tanzania," NBER Books, National Bureau of Economic Research, Inc, number edwa14-1, January.
    27. Mavrotas, George (ed.), 2010. "Foreign Aid for Development: Issues, Challenges, and the New Agenda," OUP Catalogue, Oxford University Press, number 9780199580934.
    28. Guillaumont, Patrick & Guillaumont Jeanneney, Sylviane & Wagner, Laurent, 2017. "How to Take into Account Vulnerability in Aid Allocation Criteria and Lack of Human Capital as Well: Improving the Performance Based Allocation," World Development, Elsevier, vol. 90(C), pages 27-40.
    29. Edwards, Sebastian, 2014. "Toxic Aid: Economic Collapse and Recovery in Tanzania," OUP Catalogue, Oxford University Press, number 9780198704423.
    30. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
    31. Patrick Guillaumont, 2010. "Assessing the Economic Vulnerability of Small Island Developing States and the Least Developed Countries," Post-Print hal-00488679, HAL.
    32. Danny Cassimon & Olusegun Fadare & George Mavrotas, 2023. "The Impact of Food Aid and Governance on Food and Nutrition Security in Sub-Saharan Africa," Sustainability, MDPI, vol. 15(2), pages 1-19, January.
    33. George Mavrotas & Peter Nunnenkamp, 2007. "Foreign Aid Heterogeneity: Issues and Agenda," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 585-595, December.
    34. Sabrine Dhahri & Anis Omri, 2020. "Are international capital flows really matter for achieving SDGs 1 and 2: ending poverty and hunger?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(4), pages 731-767, November.
    35. Bruno Cabrillac & Matthieu Boussichas & Clara Pugnet, 2025. "How the closure of USAID will affect the allocation of global official development assistance [Comment la fermeture de l'USAID va affecter l'allocation de l'aide publique au développement mondiale]," Post-Print hal-05131729, HAL.
    36. Danny Cassimon & Bjorn Van Campenhout, 2007. "Aid Effectiveness, Debt Relief and Public Finance Response: Evidence from a Panel of HIPC Countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 742-763, December.
    37. repec:plo:pone00:0215110 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Akame, Afuge & Mavrotas, George, 2024. "The differential effects of foreign aid to sub-Saharan Africa," IOB Discussion Papers 2024.01, Universiteit Antwerpen, Institute of Development Policy (IOB).
    2. Danny Cassimon & Olusegun Fadare & George Mavrotas, 2023. "The Impact of Food Aid and Governance on Food and Nutrition Security in Sub-Saharan Africa," Sustainability, MDPI, vol. 15(2), pages 1-19, January.
    3. Farooq, Imran & Mavrotas, George & Cassimon, Danny, 2025. "Aid heterogeneity and fiscal response: the case of Pakistan," IOB Working Papers 2025.13, Universiteit Antwerpen, Institute of Development Policy (IOB).
    4. Farooq, Imran & Mavrotas, George & Cassimon, Danny, 2026. "Fiscal response in the presence of aid heterogeneity under political regime change: new evidence from Pakistan," IOB Working Papers 2026.01, Universiteit Antwerpen, Institute of Development Policy (IOB).
    5. repec:bla:rdevec:v:13:y:2009:i:s1:p:373-381 is not listed on IDEAS
    6. repec:unu:wpaper:wp2012-25 is not listed on IDEAS
    7. Gravier-Rymaszewska, Joanna, 2012. "How Aid Supply Responds to Economic Crises: A Panel VAR Approach," WIDER Working Paper Series 025, World Institute for Development Economic Research (UNU-WIDER).
    8. Temple, Jonathan R.W., 2010. "Aid and Conditionality," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4415-4523, Elsevier.
    9. Patrick GUILLAUMONT, 2009. "Aid effectiveness for poverty reduction: macroeconomic overview and emerging issues," Working Papers P05, FERDI.
    10. Hudson, John, 2015. "Consequences of Aid Volatility for Macroeconomic Management and Aid Effectiveness," World Development, Elsevier, vol. 69(C), pages 62-74.
    11. Joanna Gravier-Rymaszewska, 2012. "How Aid Supply Responds to Economic Crises: A Panel VAR Approach," WIDER Working Paper Series wp-2012-025, World Institute for Development Economic Research (UNU-WIDER).
    12. Gnangnon, Sèna Kimm, 2022. "Effect of structural economic vulnerability on the participation in international trade," EconStor Preprints 262004, ZBW - Leibniz Information Centre for Economics.
    13. Loujaina Abdelwahed, 2023. "Fiscal Responses to Foreign Aid: Does the Permanence of Aid Matter?," Journal of African Economies, Centre for the Study of African Economies, vol. 32(1), pages 26-51.
    14. repec:oup:jafrec:v:32:y:2022:i:1:p:26-51. is not listed on IDEAS
    15. Thalis P. V. Zis & Harilaos N. Psaraftis, 2022. "Impacts of short-term measures to decarbonize maritime transport on perishable cargoes," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(3), pages 602-629, September.
    16. Angelucci, Federica & Conforti, Piero, 2010. "Risk management and finance along value chains of Small Island Developing States. Evidence from the Caribbean and the Pacific," Food Policy, Elsevier, vol. 35(6), pages 565-575, December.
    17. Montalbano, Pierluigi, 2011. "Trade Openness and Developing Countries' Vulnerability: Concepts, Misconceptions, and Directions for Research," World Development, Elsevier, vol. 39(9), pages 1489-1502, September.
    18. Mina Baliamoune-Lutz, 2013. "The Effectiveness of Foreign Aid to Women's Equality Organizations in the MENA: Does Aid Promote Women's Political Participation?," WIDER Working Paper Series wp-2013-074, World Institute for Development Economic Research (UNU-WIDER).
    19. Roger Hosein & Nirvana Satnarine-Singh & George Saridakis, 2022. "The Spillover Effect of Exports: An Analysis of Caribbean SIDs," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 75(1), pages 1-28.
    20. Sèna Kimm Gnangnon, 2012. "Does Structural Economic Vulnerability Matter for Public Indebtedness in Developing Countries?," CERDI Working papers halshs-00749469, HAL.
    21. Jean-Fran ois Hoarau & Nicolas Lucic, 2022. "Are real merchandise imports per capita a good predictor for the standard of living for the small island world: Testing for the imports-led growth and the growth-led imports hypotheses in panels over the period 1970-2019," TEPP Working Paper 2022-16, TEPP.
    22. Andrew Curtis & Benjamin McLellan, 2023. "Framework for Assessment of the Economic Vulnerability of Energy-Resource-Exporting Countries," Resources, MDPI, vol. 12(2), pages 1-38, February.
    23. Nadia Basty & Dorsaf Azouz Ghachem, 2022. "A Sectoral Approach of Adaptation Finance in Developing Countries: Does Climate Justice Apply?," Sustainability, MDPI, vol. 14(17), pages 1-18, August.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:iedlwp:336687. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/deuoagr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.