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?
The changing global order presents a complex set of challenges for Europe and is shaping the context in which its development policy operates. Successive global crises, growing geopolitical uncertainty and a volatile international environment have placed the EU in a near-permanent “crisis mode”, forcing it to react to events as they arise and often challenging its usual decision-making processes. For many years, the EU has often been compared to a slow-moving tanker in world politics, capable of significant influence but limited in terms of rapid decision-making and strategic agility. In recent months, however, the EU has become a think tank in international politics: passively commenting rather than actively shaping. Instead of influencing and steering global agendas through its strong rules-based institutions, the EU is plagued by a defensive siege mentality (de Wilde, 2025). Although the European Green Deal was once described as Europe’s “man on the moon moment” in 2019, it turned out the spaceship never actually made it beyond Earth’s orbit. Instead, the EU has rolled back aspects of its Green Deal ambition to reduce dependence on external inputs, including fossil fuels – a reversal that was already looking short-sighted long before Iran closed the Strait of Hormuz in March 2026.
The changing global order presents a complex set of challenges for Europe and is shaping the context in which its development policy operates. Successive global crises, growing geopolitical uncertainty and a volatile international environment have placed the EU in a near-permanent “crisis mode”, forcing it to react to events as they arise and often challenging its usual decision-making processes. For many years, the EU has often been compared to a slow-moving tanker in world politics, capable of significant influence but limited in terms of rapid decision-making and strategic agility. In recent months, however, the EU has become a think tank in international politics: passively commenting rather than actively shaping. Instead of influencing and steering global agendas through its strong rules-based institutions, the EU is plagued by a defensive siege mentality (de Wilde, 2025). Although the European Green Deal was once described as Europe’s “man on the moon moment” in 2019, it turned out the spaceship never actually made it beyond Earth’s orbit. Instead, the EU has rolled back aspects of its Green Deal ambition to reduce dependence on external inputs, including fossil fuels – a reversal that was already looking short-sighted long before Iran closed the Strait of Hormuz in March 2026.
Since Donald Trump’s return to the US presidency, the UN system has come under unprecedented pressure. UN Secretary-General António Guterres and the UN Secretariat were already struggling with a protracted liquidity crisis (caused by recurrent delayed or incomplete payment of assessed contributions from major contributors such as the United States and China), looming reductions in major donors’ voluntary contributions and rising geopolitical tensions among UN member states (Camelli & Patz, 2026; Haug, 2024). But the Trump administration’s disdain for multilateralism in general, and the UN in particular, poses an even more fundamental and pressing challenge to the UN, both financially and (geo)politically. Since the establishment of the UN in 1945, the United States has played a key role as the host for the UN headquarters in New York and the largest contributor to UN budgets. Although relations between the UN and the US government have long been complex – with influential anti-UN voices persistently present in US domestic politics (Browne & Nakamura, 2009; Mingst, 2003) – it had never reached a point at which broader US support for the organisation appeared to be under threat. This has changed, as exemplified by the formal or de facto withdrawal of the United States from many parts of the UN system, including withdrawal from the World Health Organization (WHO) and the United Nations Educational, Scientific and Cultural Organization (UNESCO) in 2025, as well as disengaging from 31 other UN entities in 2026 (The White House, 2026). With the faltering hegemonic position of the United States, a general turn to overt geopolitics (Haug, 2026) and “my-country-first” policies, as well as long-standing criticism about the organisation’s inefficiencies, duplication and fragmentation – driven by donors’ chronic uncoordinated funding behaviour – the UN’s position as the centre of an imperfectly functioning multilateral system is at stake. Other major powers and blocs – from China and the BRICS grouping to the EU and a diverse group of medium-sized states from across the globe – have been unable to put forward a joint response to the fickle and often adversarial posture of the United States. Many have instead exhibited more transactional and self-focused behaviour, such as advocating for UN staff relocations to their own countries. So far, there is no shared vision of what the future of multilateral cooperation through the UN system – including its development, humanitarian and global regulatory agencies – ought to look like. Against this backdrop, we first outline why recent reform attempts under the so-called UN80 Initiative – triggered primarily by the shift in US policy towards multilateral organisations – have missed several opportunities to strategically reform and strengthen the UN system. We then argue that UN multilateralism is still needed – maybe more than ever before. Finally, we turn to recommendations on what stakeholders should do in order to make the UN fit for purpose in an increasingly challenging global environment.
Since Donald Trump’s return to the US presidency, the UN system has come under unprecedented pressure. UN Secretary-General António Guterres and the UN Secretariat were already struggling with a protracted liquidity crisis (caused by recurrent delayed or incomplete payment of assessed contributions from major contributors such as the United States and China), looming reductions in major donors’ voluntary contributions and rising geopolitical tensions among UN member states (Camelli & Patz, 2026; Haug, 2024). But the Trump administration’s disdain for multilateralism in general, and the UN in particular, poses an even more fundamental and pressing challenge to the UN, both financially and (geo)politically. Since the establishment of the UN in 1945, the United States has played a key role as the host for the UN headquarters in New York and the largest contributor to UN budgets. Although relations between the UN and the US government have long been complex – with influential anti-UN voices persistently present in US domestic politics (Browne & Nakamura, 2009; Mingst, 2003) – it had never reached a point at which broader US support for the organisation appeared to be under threat. This has changed, as exemplified by the formal or de facto withdrawal of the United States from many parts of the UN system, including withdrawal from the World Health Organization (WHO) and the United Nations Educational, Scientific and Cultural Organization (UNESCO) in 2025, as well as disengaging from 31 other UN entities in 2026 (The White House, 2026). With the faltering hegemonic position of the United States, a general turn to overt geopolitics (Haug, 2026) and “my-country-first” policies, as well as long-standing criticism about the organisation’s inefficiencies, duplication and fragmentation – driven by donors’ chronic uncoordinated funding behaviour – the UN’s position as the centre of an imperfectly functioning multilateral system is at stake. Other major powers and blocs – from China and the BRICS grouping to the EU and a diverse group of medium-sized states from across the globe – have been unable to put forward a joint response to the fickle and often adversarial posture of the United States. Many have instead exhibited more transactional and self-focused behaviour, such as advocating for UN staff relocations to their own countries. So far, there is no shared vision of what the future of multilateral cooperation through the UN system – including its development, humanitarian and global regulatory agencies – ought to look like. Against this backdrop, we first outline why recent reform attempts under the so-called UN80 Initiative – triggered primarily by the shift in US policy towards multilateral organisations – have missed several opportunities to strategically reform and strengthen the UN system. We then argue that UN multilateralism is still needed – maybe more than ever before. Finally, we turn to recommendations on what stakeholders should do in order to make the UN fit for purpose in an increasingly challenging global environment.