Over the past decade, development finance has increasingly shifted towards attracting private investment. The logic is straightforward: if traditional aid budgets are too small to meet global development needs, public funds can be used to mobilise much larger pools of private capital. While this approach promises to expand development resources, critics question whether it delivers on its ambitions in practice.
Among them is Anissa Bougrea, Max Weber Fellow at the Robert Schuman Centre, whose research combines insights from post- and decolonial theory with a detailed, institutionally grounded analysis of how development finance actually works. Rather than critiquing development finance from a distance, she examines its institutions, instruments, and everyday practices to understand how financialised approaches shape development outcomes and power relations.
In recognition of her work, Bougrea was awarded the 2026 Emerging Scholar Research Paper Award on Public Development Banks at the Development Banking Research Conference, held under France’s G7 Presidency. In this interview, she discusses the financialisation of development aid, the role of multilateral development banks, and the colonial legacies that continue to shape development finance today.
We often hear the term ‘development aid’, but what it actually means—and how it is provided—is not always well understood. Could you explain the logic behind providing aid to developing countries and how that logic has shifted over the years?
Development aid has never been purely altruistic, and I want to be honest about that from the outset. In the decades after the Second World War (from the 1940s through to the 1990s), aid largely followed a relatively straightforward model. Wealthier governments and international organisations such as the World Bank and the International Monetary Fund provided funding to governments in the Global South, mainly through grants and low-interest loans. These transfers often came with conditions attached, such as requirements related to economic policy or the way the money was spent. While presented as development support, this system was also shaped by geopolitical interests and, in many cases, involved private companies in delivering aid projects. This model was imperfect, often paternalistic, and certainly geopolitical. A decolonial reading of this history makes that very clear.
What has shifted dramatically since the mid-2010s is the introduction of a ‘financialised’ approach to aid. The shorthand is “from billions to trillions”: the idea that traditional aid budgets are too small to meet global development needs, and that the solution is to use a small amount of public money to attract or ‘leverage’ much larger private investment flows. In practice, this means that, instead of grants to schools or health clinics, governments and development banks use tools such as financial guarantees, blended finance structures, and risk insurance to encourage private investors to invest in developing countries. These investors include large institutional actors such as pension funds, asset managers, and private investment firms. The appeal is obvious: if a relatively small amount of public money can unlock much larger private funding, overall resources for development increase. Nothing necessarily wrong with that. The problem, however, as my research shows, is that this multiplication rarely occurs at the scale promised, and the projects that do attract private finance tend to be those that are already profitable or likely to make money, rather than those where need is greatest.
Throughout your research, you describe the financialisation of development aid as following a relatively straightforward logic. What does financialisation mean in practice, and how does it affect development outcomes in recipient countries?
My approach here is to combine a critical perspective, informed by post- and decolonial theory, with a pragmatic, institutionally grounded analysis. One challenge in studying financialisation is that the term is often used so broadly that it risks meaning everything and nothing at once, from Wall Street trading and pension funds to microfinance in rural Kenya. At the same time, I believe that critically assessing a system requires understanding how it actually works in practice. With that being said, rather than examining EU development finance only from a theoretical distance, I focus on how it operates in practice—through its institutions, instruments, and everyday implementation. This approach makes it possible to ask not only whether finance has become more influential throughout time, to which the answer is almost always yes, but also how, where, and for whom.
What emerges is that the financialisation of development runs deeper than simply using more financial instruments. Instead, it reflects a broader shift in which financial logics, the language of risk, return, bankability and investor appetite, have moved to the centre of how we think about and deliver development cooperation. As such, development itself is increasingly defined by what private investors find attractive. The consequences are significant: financialised aid tends to reach those who are already closest to commercial viability (middle-income countries with established stable markets), while the most fragile and marginalised contexts receive less. In addition, it can constrain the policy space of developing countries, create hidden liabilities through public-private partnerships, and shift definitions of development success away from human outcomes towards investor returns.
You discuss how multilateral development banks (MDBs), in their effort to attract private investment for development projects, face a trilemma between preserving their developmental role, scaling up investment, and appealing to private investors. How have MDBs attempted to navigate this trilemma so far, and why have these efforts fallen short?
Multilateral development banks, such as the World Bank, European Investment Bank, or the African Development Bank, are simultaneously being asked to do three things that conflict with each other. First, they are expected to maximise the volume of financing flowing into developing countries. Second, they are supposed to reduce risks enough that private investors are willing to participate. Third, they need to preserve their traditional business model, which involves borrowing cheaply on global capital markets and passing those low rates on to governments in the Global South. This model depends on strong credit ratings, which in turn require relatively low-risk lending portfolios.
The most ambitious strategy for attracting private capital involves what is known as ‘portfolio de-risking’ or securitisation. Under this approach, development loans are packaged together and sold to private investors on financial markets. This shifts risk to governments and increases the potential volume of private financing, but pulls development banks away from their traditional business model. In doing so, they could jeopardise the strong credit ratings and preferred creditor status that let them to borrow cheaply in the first place. Without these advantages, they would struggle to provide low-cost financing to developing countries, undermining one of their core functions.
What most banks in Europe have done instead is to focus on making individual projects more attractive to private investors by providing guarantees or low-cost financing that reduces the risks associated with investing in those projects. While this policy is more compatible with their traditional role as low-cost lenders, it has not attracted private investment at the scale originally promised. In practice, for every public dollar invested, development banks often mobilise less than one additional dollar of private investment in the poorest countries.
A third approach has gained momentum more recently: shareholders are discussing capital adequacy reforms (CAF) at the G20 level, aiming to expand lending capacity by more efficiently using existing capital. While more politically feasible, this approach remains modest in ambition. More importantly, geopolitics plays a significant role here. These reforms are also politically contested. Western shareholders tend to support them to avoid additional public contributions, while China often pushes for general capital increases to raise its voting power within the World Bank / IMF. And borrowing countries in the Global South are wary of balance-sheet optimisation measures that might raise their borrowing costs. So even the technocratic solution to the trilemma turns out to be geopolitically contested. The “billions to trillions” promise has given way to something far more modest and political.
You mention that EU officials are increasingly acknowledging the geopolitical nature of development finance, whereas this political dimension was previously more obscured. How do you see the tension between geopolitical ambitions and development-oriented objectives shaping the future of EU development finance?
First, development aid has always been a geopolitical tool. That is not something that started with the rivalry with China or the war in Ukraine. What has changed is that this is now openly being stated rather than politely obscured behind the language of partnership and poverty reduction. In one sense, that honesty is clarifying. In another sense, it reveals something troubling about the direction of the world.
The key shift is that the mechanisms through which geopolitics operates have changed, and that changes the outcomes. When geopolitical interests were pursued through grant-based aid—funding schools, health systems, and direct budget support—there were still problems, conditionalities, and donor priorities overriding recipient needs. But the tools were at least capable of reaching the most fragile contexts: grants do not require a functioning capital market or creditworthy borrowers. Private finance does. And this is where the tension becomes acute. The EU’s flagship initiative, the Global Gateway Strategy—its answer to China’s development strategy, the Belt and Road Initiative—commits to mobilising €400 billion, much of it from private investors. In practice, this means that geopolitically relevant and profitable projects get prioritised: think of the Lobito Corridor in southern Africa, or investments in critical raw materials like lithium and cobalt needed for Europe’s green transition. These may sometimes be useful for African countries too, but they are driven primarily by European strategic needs.
Meanwhile, the countries that most need development finance (fragile states, low-income economies, conflict-affected regions) are the ones where private capital is least willing to go, even with de-risking. They are not bankable enough, not geopolitically central enough, and so they receive less, as the development architecture shifts toward financialised, geopolitically targeted instruments.
Basically, aid is being replaced by investment. I am not defending aid as it has existed, so its disappearance shouldn't automatically be a loss. If aid were to disappear, that might actually be a good thing, but only if it were replaced by something genuinely just: debt cancellation, reparations, fairer trade architecture, African control over monetary and fiscal policy. That is not what is happening. Aid is being replaced by a narrow form of investment designed for private investors, not development needs. The result is a development finance landscape where geopolitics increasingly set the agenda, private finance sets the terms, and the countries with the least leverage find themselves further from the table than before.
In one of your studies, you argue that colonial logics were embedded in the creation of the European Economic Community (EEC). What does this entail in practice, and how are current scholarly approaches attempting to confront or rethink these legacies?
This is an argument I make carefully and in good company. A foundational text I would point to is Peo Hansen and Stefan Jonsson’s Eurafrica, which provides a meticulous historical account of how European integration was, from the outset, conceived in relation to Africa. The idea of ‘Eurafrique’—a Euro-African bloc that would give Europe access to African resources and markets while extending European governance over African territories—was actively debated among European leaders during the negotiations leading up to the Treaty of Rome in 1957, with Africa seen as both a source of raw materials and a market for European goods. This body of scholarship shows that the EEC was not formed in isolation from the empire. The association of African territories in the original treaties was not a benevolent gesture toward development; it was partly designed to preserve European access to raw materials and preferential markets as formal colonial control became politically unsustainable.
More recent scholarship continues to engage with these questions by rethinking EU-Africa relations and trade and development frameworks, highlighting how institutional practices often reproduce Eurocentric assumptions about norms, governance, and development.
In my own work, namely in a paper under review co-authored with Ueli Staeger, I extend this historical argument into the present through the concept of the “coloniality of money”. Drawing on Aníbal Quijano and Walter Mignolo, coloniality refers to the patterns of power that persist after formal decolonisation. We show how these logics operate today through EU funding and financing: bureaucratic complexity that excludes African actors, assumptions about creditworthiness, and conditionalities that reproduce dependency in new forms.
Anissa Bougrea is a Max Weber Fellow at the EUI’s Robert Schuman Centre for Advanced Studies. Her current research interests lie in the geopoliticisation of aid, the interplay of development and security logics, and the reconfiguration of coloniality within North-South relations through development finance. Her work has been published in the Journal of Economic Policy Reform, Competition & Change, and the European Foreign Affairs Review, as well as in edited volumes with Routledge and Oxford University Press.
As a Max Weber Postdoctoral Fellow, she examines how development and security logics (from China’s rise to critical raw materials) intersect, are negotiated and operationalised through financialised aid, and reshape both development and the EU’s global role.