Escalatory attacks on multilateral rules and institutions in this era of raw power politics have plunged international politics into uncharted territory. Traditional alliances have been fractured and new partnerships between unlikely bedfellows are emerging. No longer in transition, the post-World War II world order is in rupture. This paper examines international cooperation under these conditions and argues that a new ‘flexi-lateralism’ is taking shape as a pragmatic response to changing times. We define the new flexi-lateralism as international cooperation expressed through adaptable modular tools and selective coalitions, anchored in UN norms, that proceeds even when universal commitments are openly contested and attacked. Our paper considers a set of initiatives launched around the Financing for Development (FfD) conference in Sevilla (July 2025) on the issue of debt servicing. We illustrate how cooperation often depends on selective participation, informal venues and issue-specific coalitions, rather than comprehensive universal bargains. The paper uses ‘flexi-lateralism’ as a term for these flexible multilateral forms that sit between classic UN-style universality and narrow great-power deals. We conclude that international cooperation in this era is neither automatically collapsing nor simply fragmenting. It is adapting and reconfigured through overlapping clubs and coalitions with uneven implications for the Global South and the North.
The OECD conference “will focus on action, connecting geopolitical realities with development priorities and translating vision into practical strategic directions.” So how does the flexi-lateralism framework help? We argue that cooperation is reconfiguring into selective coalitions using discrete modular instruments, orchestrated through intermediaries, connected to universal norms but no longer dependent on universal participation. Whether this configuration can maintain legitimacy while delivering speed and adaptation is an open question. Delegates in Paris could look at the design principles we set out that distinguish workable flexi-lateral arrangements from fragmentation, namely, transparency, open accession pathways, and normative alignment with agreed development goals. These are the features that differentiate new forms of cooperation.
Looking back, the return of Donald Trump to the White House, and, in the early phase, the role played by Elon Musk in reshaping the U.S. foreign aid approach has, to a large extent, foreshadowed what the second Trump administration would become. This profile consists of: (i) crude transactionalism, (ii) a strong ideological foundation (with significant elements of authoritarian libertarianism), (iii) a high degree of chaos with decisions not necessarily based on strategic or even tactical considerations, and (iv) an obsession with disruption. The wide range of current initiatives, coalitions, commissions, and conferences that are discussing development cooperation, as well as efforts to reflect on narratives, international aid governance, and resource mobilisation, are thus operating in a highly hostile environment shaped by the U.S. administration assault on long standing policy norms. European leaders could speak out more clearly about what can be seen as an open challenge those norms. They could also advance a more proactive narrative and, importantly, refuse to de facto repurpose development institutions and decide not to follow the fundamental ODA reductions by the United States.
A little more than a year into the Trump 2.0 era, it has become apparent that the “post–Cold War” international order is in its death throes. For three decades, global affairs have been shaped by a system dominated by the United States as the world’s only genuinely global power. American power was embedded in a “rules-based” international order founded on respect for national sovereignty and territorial integrity, alongside liberal-democratic norms such as “free” global economic exchange and institutionalised governance. Led by the United States and its Western allies, this order was considered by some in the early 1990s to be the “end of history”, a supposedly final stage in human ideological, political and economic evolution (Fukuyama, 1989). While the order was never without its practical and moral failings, and although many countries did not benefit from its protection, it was widely considered an improvement over past systems for organising international interdependence. Today, however, the liberal internationalist project faces a profound crisis and is being challenged by geopolitical competition and a hollowing out from within (Ikenberry, 2024).
A little more than a year into the Trump 2.0 era, it has become apparent that the “post–Cold War” international order is in its death throes. For three decades, global affairs have been shaped by a system dominated by the United States as the world’s only genuinely global power. American power was embedded in a “rules-based” international order founded on respect for national sovereignty and territorial integrity, alongside liberal-democratic norms such as “free” global economic exchange and institutionalised governance. Led by the United States and its Western allies, this order was considered by some in the early 1990s to be the “end of history”, a supposedly final stage in human ideological, political and economic evolution (Fukuyama, 1989). While the order was never without its practical and moral failings, and although many countries did not benefit from its protection, it was widely considered an improvement over past systems for organising international interdependence. Today, however, the liberal internationalist project faces a profound crisis and is being challenged by geopolitical competition and a hollowing out from within (Ikenberry, 2024).
Caught between weak employment opportunities and widespread informal employment, Egypt’s manufacturing sector faces a dual challenge. Existing incentives in the labour market encourage both firms and workers to engage in informal employment arrangements. Firms benefit from lower labour costs and greater flexibility, while workers often seek higher take-home pay, driven by limited confidence in the benefits associated with formal employment. Many workers perceive tax and social insurance deductions as offering few tangible benefits or effective safety nets that would compensate for the reduction in current income. At the same time, policies aimed at promoting formal job creation that rely exclusively on stricter enforcement may backfire by increasing hiring costs, thereby creating an additional obstacle for job creation as well as for policymakers.
Caught between weak employment opportunities and widespread informal employment, Egypt’s manufacturing sector faces a dual challenge. Existing incentives in the labour market encourage both firms and workers to engage in informal employment arrangements. Firms benefit from lower labour costs and greater flexibility, while workers often seek higher take-home pay, driven by limited confidence in the benefits associated with formal employment. Many workers perceive tax and social insurance deductions as offering few tangible benefits or effective safety nets that would compensate for the reduction in current income. At the same time, policies aimed at promoting formal job creation that rely exclusively on stricter enforcement may backfire by increasing hiring costs, thereby creating an additional obstacle for job creation as well as for policymakers.
The changing global order is reshaping the domestic politics of foreign aid. As many OECD governments shift their focus towards defence spending and narrower national interests, contributions to global public goods and development are declining. Development budgets, in particular, are traditionally among the first casualties of public spending cuts. Germany is no exception. Its core development budget has fallen from €12.4 billion in 2021 to €9.9 billion in 2026 – a decline of around 20 per cent. This decrease is driven by overall pressure on public spending and a decisive shift towards defence. A recent study projects a contested but illustrative estimate, suggesting that aid cuts could lead to an additional 9.4 million deaths by 2030 (da Silva et al., 2026). In January 2026, Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) presented a reform strategy that directly addresses these pressures. The strategy advocates a shift towards a more targeted approach, shaped in part by these budget cuts. However, it also addresses long-standing reform needs that predate them. Three aspects are particularly noteworthy: a clear focus on least developed countries (LDCs), where aid can have relatively high impact; explicit thematic prioritisation that recognises over-fragmentation as a key problem; and a stronger commitment to evidence and results, anchored in the statement that “effectiveness and evidence are central principles for steering German development cooperation” (BMZ, 2026). Possible concrete steps towards achieving these goals can be found in a joint CGD–IDOS policy paper on prioritisation (Hughes, Janus, Mitchell, & Röthel, 2025). However, questions remain about the strategy, most notably the apparent tensions between the focus on LDCs and ambitions to promote German business interests, the vague implementation plans and the fundamental question of political viability: Can these reforms generate meaningful change within the German development cooperation system and its wider political authorising environment?
The changing global order is reshaping the domestic politics of foreign aid. As many OECD governments shift their focus towards defence spending and narrower national interests, contributions to global public goods and development are declining. Development budgets, in particular, are traditionally among the first casualties of public spending cuts. Germany is no exception. Its core development budget has fallen from €12.4 billion in 2021 to €9.9 billion in 2026 – a decline of around 20 per cent. This decrease is driven by overall pressure on public spending and a decisive shift towards defence. A recent study projects a contested but illustrative estimate, suggesting that aid cuts could lead to an additional 9.4 million deaths by 2030 (da Silva et al., 2026). In January 2026, Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) presented a reform strategy that directly addresses these pressures. The strategy advocates a shift towards a more targeted approach, shaped in part by these budget cuts. However, it also addresses long-standing reform needs that predate them. Three aspects are particularly noteworthy: a clear focus on least developed countries (LDCs), where aid can have relatively high impact; explicit thematic prioritisation that recognises over-fragmentation as a key problem; and a stronger commitment to evidence and results, anchored in the statement that “effectiveness and evidence are central principles for steering German development cooperation” (BMZ, 2026). Possible concrete steps towards achieving these goals can be found in a joint CGD–IDOS policy paper on prioritisation (Hughes, Janus, Mitchell, & Röthel, 2025). However, questions remain about the strategy, most notably the apparent tensions between the focus on LDCs and ambitions to promote German business interests, the vague implementation plans and the fundamental question of political viability: Can these reforms generate meaningful change within the German development cooperation system and its wider political authorising environment?