S7 Ep46: Rethinking development cooperation: The case for a 'balance sheet' approach

Many conversations about development for focus on aid: how much, from whom, and for how long. But aid has never been more than a small part of what pays for a country's development, and in 2025 it fell by 23.1%. The need to rethink our attitude to development has inspired the Future of Development Cooperation Coalition (FDCC). In this week's episode, Alexia Latortue and Radha Rajkotia of FDCC talk to Tim Phillips about its first report,. The report assesses the development challenges of LMICs using a balance sheet approach, with assets on one side and liabilities on the other. Tax revenue, remittances, pension and sovereign wealth funds, trade, natural resources and the skills of the population sit on the asset side. Unsustainable debt, illicit financial flows, poor credit ratings, weak institutions, climate exposure and conflict sit on the other.The idea? Each country focuses on the policies to develop their most important assets, and minimise their most problematic liabilities. They argue that governments and donors alike should stop thinking of developing countries as recipients of aid, and start thinking of them as partners in economic development.The research behind this episode:Future of Development Cooperation Coalition. 2026. "The Development Balance Sheet: Rethinking Development Cooperation from the Ground Up." Published 20 May 2026. Research team: Radha Rajkotia, John Norris and Mma Amara Ekeruche.To cite this episode:Phillips, Tim, Alexia Latortue, and Radha Rajkotia. 2026. "Rethinking development cooperation: The case for a 'balance sheet' approach." VoxDev Talks (podcast). About the guestsAlexia Latortue is Head of Secretariat of the Future of Development Cooperation Coalition and a Distinguished Non-Resident Fellow at the Center for Global Development. She served as Assistant Secretary for International Trade and Development at the US Treasury, where she led work on reforming the multilateral development banks and on using public finance to pull private capital into emerging markets. She was previously Deputy CEO and Managing Director for Corporate Strategy at the Millennium Challenge Corporation, sat on the Executive Committee of the European Bank for Reconstruction and Development, and spent ten years at the World Bank working on financial inclusion, ending as Deputy CEO of CGAP.Radha Rajkotia is Director of Research at the Future of Development Cooperation Coalition and lead researcher on this report. She was Chief Executive Officer of Building Markets and, before that, Chief Research and Policy Officer at Innovations for Poverty Action, running its strategy across 22 countries. She spent eleven years leading the economic recovery and development unit at the International Rescue Committee, on work spanning cash-based relief and job creation in conflict settings. She holds a PhD in Refugee Studies from the University of Sussex, is a Senior Policy Fellow at the Henry Leir Institute at Tufts University, and teaches at Georgetown.Research cited in this episodeThe balance sheet approach. The report sets out assets and liabilities but argues that neither is a checklist. Some entries are country-specific, such as natural resource endowments or exposure to climate risk. Others are structural, such as a sovereign credit rating, which constrains or enables progress regardless of what a government does at home. The point of the exercise is situational awareness before prioritisation, not a universal to-do list.The 30 national development strategies. The research team reviewed the current development strategies of 30 countries across Africa, Asia and Latin America. All 30 prioritise economic transformation and human capital. Governance appears as a stand-alone pillar in two-thirds of them. Inequality is a defining element in almost every Latin American strategy and largely absent as an explicit constraint in Africa and Asia. Most countries frame technology as digital economy rather than as AI governance or chip access, which the report reads as a widening sophistication gap.Nigeria and Ethiopia. The report's worked comparison. Ethiopia attracts more than three times Nigeria's foreign direct investment despite being roughly 100 million people smaller. Nigeria has strong tax revenues, considerable pension fund assets, a heavy debt servicing burden and large losses to illicit financial flows. Ethiopia has a narrow tax base and weak compliance, suffers far less from illicit flows, carries a lighter debt service burden a