The world may be in the midst of escalating nationalism, but in development finance, multilateralism is ascendant. That’s according to ONE Data’s recently published Great Reversal report, which says that while net development finance flows to low- and middle-income countries decreased by 25% between 2010-2014 and 2020-2024, the decline would have been more severe without the increased lending of multilateral development banks.
The report maps out the withdrawal of finance to LMICs from China, from private investors, and from members of the OECD’s Development Assistance Committee. While all those sources are slashing their levels of finance, ONE Data found a 124% increase in finance from MDBs since 2010. The result is that multilateral funding now exceeds bilateral as a source of cash for these countries — with the caveat that MDB money is more likely to come in the form of loans, not grants.
The findings indicate that as bilateral assistance likely enters a period of decline, or at least stasis, MDBs are increasingly central to the development finance system.