Multilateral Development Finance 2026

The multilateral development system is being reshaped by growing geopolitical fragmentation and tightening aid budgets. After decades of expansion, funding to the system fell sharply in 2024, with further reductions expected through 2027. This downturn has exposed longstanding structural challenges, including funding vulnerabilities and institutional proliferation, that were easier to overlook during years of growth. Although outflows from multilateral development organisations remain high for now, pressure is mounting, and sustained delivery cannot be maintained without stable, predictable funding. Moreover, the risks posed by funding cuts depend not only on their scale, but also on where they occur: reductions in critical parts of the system can weaken functions on which the broader architecture depends. Against this backdrop, this fifth edition of the Multilateral Development Finance report highlights concrete opportunities for reform and for more strategic engagement with the multilateral system. It emphasises the importance of preserving the features that make the system greater than the sum of its parts, including its leverage, global reach, and ability to support the poorest and most vulnerable countries.