Practical Guidelines for Supporting Locally Led Development

Annex B. A changing global landscape: Pressures and trade-offs for advancing locally led development

Budget constraints and pressure for achieving development impact

Development partners are compelled to deliver greater development impact with fewer resources, prompting renewed reflection on how ODA is used and leveraged. Across many DAC members, ODA budgets are under pressure from domestic austerity measures, shifting political priorities, and competing demands related to migration, security and global public goods. ODA dropped in real terms by 7% from 2023 to 2024 and is estimated to decrease by 11% to 20% from 2024 to 2027, with disproportionate impacts on the poorest countries and sectors like health (OECD, 2025[1]).

These constraints can reduce flexibility, heighten scrutiny and lower risk tolerance, inadvertently weakening local ownership by narrowing the space for adaptive, trust-based partnerships required for LLD. They may also coincide with reduced human resource capacities in donor administrations, creating incentives to concentrate funding in a limited number of large intermediaries to manage administrative burden. At the same time, they create an impetus to rethink delivery models and partnership modalities to enhance efficiency and sustainability. While international civil society organisations, contractors and United Nations agencies are likely to remain central intermediaries, DAC members are increasingly exploring ways to channel support through locally rooted organisations and systems.

Conflict, political instability and protracted crises

Conflict, political instability and protracted crises are reshaping global development co-operation. The ensuing overlapping development, humanitarian and peace agendas demand more adaptive, locally grounded responses, noting that many local and national actors operate across these domains in practice rather than within the sectoral silos often structured by international systems. The rise of new providers, including China and other non-DAC actors, has expanded partner countries’ options and strengthened their agency while also diversifying co-operation models and partnership approaches that may diverge from the globally agreed effectiveness principles.

In fragile and politically constrained settings, civic space is often restricted, state institutions lack legitimacy and political dialogue can be suspended altogether (see Chapter 1). International sanctions or value divergence can further restrict engagement, pushing development partners towards using humanitarian channels or away from partnering with national or local actors. Contexts affected by high and extreme fragility risk further disconnection from strengthening local institutions and budgets; weak governance, insecurity and fragmented institutions constrain the potential for LLD, and international intermediaries frequently substitute for public systems.

Geopolitical competition and fragility thus create a central dilemma for DAC members: how to uphold commitments to locally led and inclusive development when local political realities, contested notions of who constitutes “local” in some conflict settings, institutional risk tolerance and accountability pressures often pull in the opposite direction. While development partners face pressure to achieve quick results, addressing the drivers of fragility requires a generational approach beyond short-term programming cycles.

Trust deficits across development partnerships

Trust among development partners, partner governments and local actors is under strain, highlighting the need for sustained and reciprocal engagement. Partner countries point to unmet ODA commitments, the persistence of tied aid and the instrumentalisation of assistance for strategic ends (Masood, 2025[2]). Local organisations question the reliability of DAC members, highlighting slow progress on long-standing development effectiveness commitments and continued reliance on provider-driven priorities and delivery models that do not adequately respond to locally identified needs (OECD, 2025[3]). In response to declining or unpredictable ODA, some local civil society actors are turning to regional organisations, philanthropies and alternative financing sources.1 At the same time, development partners express concern about governance weaknesses, elite capture, corruption and uneven political commitment to reform in partner countries. Trust is further weakened where civic space restrictions limit open dialogue and disrupt feedback loops between stakeholders. Taken together, these dynamics risk reducing development co-operation from a partnership to a series of transactions, sustained more by rules and controls than by mutual confidence.

Building credible development partnerships with diverse local actors requires sustained and intentional efforts. Each engagement calls for development partners to better understand both local power dynamics, whose priorities shape decisions, including around data, and how accountability is shared. Where trust is fragile, rebuilding it depends on predictable commitments, transparent governance arrangements and greater responsiveness to locally articulated priorities, recognising listening and adaptation as core elements of effective partnership and power-sharing. Safeguarding civic space is also critical to enable accountability and sustain honest, continuous exchange.

More transactional development partnerships

Political narratives around ODA are evolving across many DAC members. Development partner self-interest, once implicit, is now increasingly reflected in strategies linking ODA to national priorities such as economic competitiveness, migration management and geopolitical influence (ODI, 2025[4]). As ODA becomes more explicitly shaped by development partner interests, the paradigm of “mutual interest” is emerging as a new reality. While greater transparency about national interests can support more honest partnerships, this shift also risks deepening power asymmetries, particularly at the local level, where communities often have limited influence over the terms of engagement and whose interests ultimately prevail.

The notion of mutual interest does not assume equality of power or resources between partners but rather the identification of shared objectives that can be pursued jointly. Where such shared interests are genuinely established, for example in areas such as labour mobility or skills partnerships, the fact that one partner has greater resources or leverage need not be disadvantageous to the other. In practice, however, partnerships are often shaped by the priorities and incentives of the development partner, who is better positioned to steer outcomes in line with its domestic objectives. This can create tensions between short-term provider objectives and long-term development outcomes and priorities of partner country governments. Sustaining political support for LLD therefore requires demonstrating that while LLD is grounded in locally identified priorities, it can also contribute to shared interests, including by supporting more stable, predictable and locally anchored operating environments that can help reduce risks for development partners and underpin longer-term economic, security and co-operation objectives.

International development co-operation being redefined

The present period marks a redefinition of international development co-operation and the norms and standards that underpin it. As ODA becomes more strategically driven, fundamental questions arise about who shapes the evolving system and through which processes and about how inclusive and genuinely co-created these processes are. Discussions on the future of development co-operation are not always accessible to the full range of stakeholders they seek to engage.2 Formats, languages and participation mechanisms, including travel or visa restrictions, can limit whose perspectives inform policy dialogue. International conferences are often organised as discrete events rather than as part of sustained, inclusive processes. Strengthening inclusive spaces and participation modalities can help ensure that diverse actors contribute meaningfully to shaping how development co-operation evolves in practice.3

Recent ODA reductions and shifts in partner priorities have highlighted shortcomings in existing accountability arrangements, particularly where affected stakeholders have limited visibility, limited inclusion in priority setting, or recourse when funding changes occur. This underscores a broader question of how accountability is defined, to whom it is directed and through which mechanisms it operates within the development system. Strengthening collective accountability implies aligning development partner processes, data sovereignty, risk attitudes and development outcomes with local realities and priorities, as well as improved coherence across development and humanitarian efforts (Veerapen, 2025[5]). In this context, the work of the Global Partnership for Effective Development Co-operation (GPEDC) provides a platform for reinforcing shared standards, tracking progress and supporting more balanced accountability relationships across all stakeholders (see Annex A).

The complexity of diverse local actors

The diversity of local actors makes supporting LLD rarely straightforward. The development effectiveness principle of inclusive country ownership extends beyond government leadership to include subnational authorities, parliaments, civil society, the private sector and community actors (OECD, 2024[6]). While this diversity enriches ownership, it also adds to the complexity of inclusive LLD. When national and local actors’ priorities are unclear or misaligned, ambiguity over “who owns” the development agenda can weaken development partner co-ordination, coherence and accountability of development efforts. In contexts where local actors operate in silos or distrust one another due to competition for ODA, development partners face difficult choices about whom to support and how to avoid reinforcing existing power imbalances. This implies trade-offs between balancing sustained engagement with diverse domestic stakeholders while also respecting the legitimacy of national institutions.

These dynamics point to a needed shift in perspective: from engaging primarily with individual local partners to considering the wider local development ecosystem within which they operate. Governments, civil society, private sector actors and community organisations play distinct and interdependent roles, shaped by national institutional arrangements and political economies. The quality of relationships among these actors, and between them and national authorities, influences co-ordination, service delivery and accountability outcomes. Recognising that communities are not homogeneous, such an ecosystem approach can also enable more meaningful inclusion of marginalised groups, including women, refugees and persons with disabilities. For development partners to engage with and strengthen these existing local ecosystems requires sustained engagement, time and predictable support, often at odds with development partners’ short funding cycles and project-based modalities. It also raises practical and political trade-offs, including how to balance engagement across diverse stakeholders while respecting the authority of national institutions.

References

[2] Masood, A. (2025), The End of Development Cooperation?, https://www.cgdev.org/sites/default/files/end-development-cooperation.pdf.

[4] ODI (2025), False Economies: Why Underfunding Local Humanitarian Actors Puts Everyone at Risk, https://odi.org/en/insights/false-economies-why-underfunding-local-humanitarian-actors-puts-everyone-at-risk/.

[5] ODI (ed.) (2025), Who decides on humanitarian reform?, https://odi.org/en/insights/who-decides-humanitarian-reform/ (accessed on 3 October 2025).

[1] OECD (2025), Cuts in official development assistance: OECD projections for 2025 and the near term, OECD Publishing, Paris, https://doi.org/10.1787/8c530629-en.

[3] OECD (2025), DAC Members’ performance on effectiveness commitments captured by the GPEDC monitoring exercise: Emerging findings from the fourth round, DCD(2025)10, https://one.oecd.org/document/DCD(2025)10/en/pdf.

[6] OECD (2024), Country ownership over national development progresses, OECD, Paris, https://www.oecd.org/content/dam/oecd/en/publications/reports/2021/03/development-co-operation-tips-tools-insights-practices_d307b396/country-ownership-over-national-development-processes_72dbbb6d/1a0df804-en.pdf.

Notes

← 1.  This perspective was also reflected in consultations conducted by the Movement for Community-led Development (MCLD) and Peace Direct with civil society organisations (CSOs) across Africa, Asia and the Pacific, Europe, Latin America and North America.

← 2.  In November 2003, over 1 800 actors outlined five principles to make convenings on LLD more inclusive in a letter to international partners.

← 3.  The Movement for Community-led Development (MCLD), CIVICUS and Peace Direct facilitated collaboration across local organisations to co-create a guidance document on how to organise inclusive policy events and discussions on LLD.