INTERNATIONAL ECONOMIC DEVELOPMENT
Cross-cutting themes in international development
Changes in policy thinking
Changes in focus and approach
Development challenges
1970s: State-led investment and import substitution. 1980s: Washington Consensus-led structural adjustment and market liberalization. 1990s: Trade and investment–oriented growth. 2000s/2010s: Inclusive, sustainable, results–based development, along with institution-building and governance and global public goods. 2010s/2020s: Resilience, climate change, private finance and strategic investment helping to open and enable market-led solutions. 2020s: Recognition of the complexity of development, which is not just achieving GDP growth but also structural transformation, human capital, good governance, connectivity, climate resilience and inequality.
1970s/80s: Emphasis on Africa and Latin America. 1990s/2000s: Shift towards East and Southeast Asia, shaped by achievements under the “Asian miracle”. 2000s/2010s: Focus on fragile states and specific middle-income countries “left behind”. Innovations in blended finance, private sector mobilization, South–South cooperation and multi- stakeholder partnerships. 2010s/2020s: Debt stress led to approach shifting from loans to greater provision of grants. Linked to this the emphasis moved from quantity of aid to development effectiveness, results, governance and transparency, with a recent additional shift to sustainability, climate and digital infrastructure. Inequality, inclusion, environmental limits and shock resilience are also major parts of the development agenda.
• Persistent inequality (between and within countries) even as global poverty in extreme terms has dropped. • Debt burdens and fragile states remain major problems that are proving difficult to resolve. • Middle-income trap: Many countries have moved from low- to middle- income but cannot reach high–income status. • Climate change, environmental degradation, demographic pressures, digital divides add new layers to the development challenge. • Financing gap: Even with increased aid and private flows, the scale of investment required to achieve the SDGs is enormous (estimated at US$1.4 trillion annually for low and lower- middle income countries by the UN). • The global economic environment is volatile: Trade tensions, pandemics, supply-chain disruptions and geopolitical fragmentation increase the risk for developing economies amid reduced aid budgets from developed economies.
In 2025, 831 million people were living below the US$3 per day poverty line.
Global poverty 1990–2025
Millions of people
2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000
800 600 400 200 0
1990 1994 1998 2002 2006 2010 2014 2018 2022 2025
Europe & Central Asia
Middle East, North Africa, Afghanistan & Pakistan
Latin America & Caribbean
Sub-Saharan Africa
South Asia
East Asia & Pacific
Source: World Bank (2025), Poverty and Inequality Platform
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