Our new approach rests on what Alexander Stubb, the president of Finland, has termed ‘value-based realism’. Or, to put another way, we aim to be both principled and pragmatic. Principled in our commitment to fundamental values: sovereignty, territorial integrity, the prohibition of the use of force except when consistent with the UN charter. And pragmatic and recognising that progress is often incremental, that interests diverge, that not every partner will share all of our values.
– Canadian Prime Minister Mark Carney, Davos, Switzerland, 20 January 2026
1. Introduction: Beyond the Decline of International Aid
The global security environment is arguably more complex now than it has been since the end of the Cold War, marked by intensifying great-power rivalry, protracted regional conflicts, and the visible weakening of multilateral institutions. Significant discussion has focused on declining international aid budgets, particularly among traditional ‘Western’ donors (including the United States, the United Kingdom, and several European states); however, the more consequential transformation may not lie in how much aid is provided, but in the changing purpose of the assistance. The reductions in aid are occurring alongside a broader reorientation of foreign and economic policy towards national security priorities. This dynamic suggests a shift in the normative foundations that once legitimised international cooperation. The question, therefore, is not only whether aid is shrinking, but also the extent to which the already weakened principles and institutions that historically framed aid as a vehicle for democratisation, rights promotion, and civil society strengthening are themselves being displaced.
It is in this context that middle powers (typically referring to states that lack the international, system-wide influence of great powers but whose resources and capacities are recognised as more significant than those of small states) find themselves at a crossroads. In a widely cited address at the World Economic Forum in Davos, Mark Carney described the contemporary moment as a ‘rupture’ in the international order. Invoking a Thucydidean logic in which ‘the strong can do what they can, and the weak must suffer what they must’, he urged middle powers to pursue collective resilience rather than isolation, warning that ‘if we’re not at the table, we’re on the menu.’ His remarks reflected a growing recognition that the erosion of multilateral guarantees and the decline of America’s hegemonic leadership is compelling states that once relied on rule-based cooperation to reconsider not only their economic and security strategies, but also the ways in which they deliver international assistance.
Middle powers now face a watershed decision: whether to resist accommodation and reassert a rights- and democracy-based assistance model, or to move further towards a security-driven realpolitik posture centred on bilateralism and strategic utility. In either case, international assistance is entering a new phase: one layered upon, but distinct from, those that preceded it.
To understand this abrupt transition, it is useful to situate current developments within a broader historical arc. In this article, we outline three recent eras of international aid. We start with the post-Cold War period, which was characterised by a phase of developmental liberalism, in which democracy, human rights, and civil society strengthening were articulated, albeit unevenly, as intrinsic objectives of assistance. This period was followed by a post-9/11 era of stabilisation and governance, in which neoliberal economic frameworks and security imperatives increasingly subsumed democracy into technocratic ‘good governance’ within multilateral institutions. The present moment signals the emergence of a third phase that is thus far being defined by securitisation without multilateralism. It is marked by bilateral, security-oriented assistance, a declining emphasis on institutional reform and accountability, and an erosion of the multilateral structures that once provided normative cover.
Carney emphasised the gravity of the current change, noting that ‘the old order is not coming back. We shouldn’t mourn it. Nostalgia is not a strategy’. The challenge for middle powers, then, is not only to adapt to shifting geopolitical realities, but to consider the foundations upon which their external engagement rests. The decline of aid funding is the most visible symptom of change. Rather than treating current developments as the result of ‘rupture’, we approach them as part of a longer term evolution of international aid.
2 Eras of International Aid
2.1 Post-Cold War Developmental Liberalism
The decade following the end of the Cold War was marked by what can be understood as a period of growth in developmental liberalism – often associated with the liberal peacebuilding paradigm – during which international assistance was framed around democracy promotion, human rights, market reform, and the strengthening of civil society. In hindsight, implementation was often uneven and selective, but democracy and rights remained legible as core aid objectives and the ‘moral duty’ of states, rather than secondary or instrumental concerns. The policy frameworks of donor governments and multilateral institutions in the 1990s regularly articulated participatory governance, rule of law, and civic engagement as intrinsic goods linked to development and peace. The approach was encouraged by the apparent developmental successes of the post-Soviet states and the belief that the world would continue to follow the democratising trend.
This orientation drew legitimacy from a broader liberal internationalist consensus and from the institutional authority of multilateral organisations. The Organisation for Economic Cooperation and Development Assistance (OECD) guidance during the period emphasised democratic governance and civil society participation as central pillars of cooperation, embedding normative language into official doctrine. Scholarly analyses similarly describe the era as one in which democracy assistance and civil society strengthening were viewed as universalisable prescriptions rather than context-specific tools. Thomas Carothers characterises the 1990s as a formative ‘learning curve’ in which donors treated democracy promotion as a central element of foreign policy rather than an adjunct to security strategy.
Middle powers played a visible role in sustaining this consensus. Countries such as Canada, the United Kingdom (UK), France, and Australia positioned themselves as brokers of liberal values within multilateral forums, emphasising civil society partnerships and participatory development as markers of responsible international engagement. Civil society in this period was frequently cast in Tocquevillian terms – as an autonomous sphere essential to democratic vitality and social accountability – rather than as a technical delivery mechanism or security intermediary. The era did not represent a uniformly principled or universally applied model, but it constituted a moment during which the language and institutional architecture of international aid were anchored in the assumption that democracy, rights, and civic participation were ends in themselves.
2.2 Post-9/11 Stabilisation
There was a decisive reorientation in the logic and implementation of international aid after 9/11. New security challenges emerged, the democratising assumptions after the Cold War were challenged, and development priorities became increasingly intertwined with new geostrategic imperatives. Faced with growing authoritarian trends, increased conflict, the ‘war on terror’, and the consequent need to support fragile and post-conflict states, the aid foci of democracy, rights, and civil society were progressively recast through the language of stability, governance, and institution strengthening. Democracy and rights did not disappear from donor vocabularies, but they were increasingly subsumed under technocratic notions of ‘good governance’, administrative efficiency, and rule-of-law reform.
Multilateral institutions continued to provide the primary arena through which these agendas were coordinated and legitimised, but their role increasingly involved technocratic, security-oriented assistance rather than just general development, focusing on ‘technical’ issues of economic adjustment that outweighed concepts of state dominance.
Meanwhile, security sector reform (SSR) emerged as a key programming focus. It was framed not as a political project of civilian oversight but a neutral technical exercise in professionalisation, training, and institutional restructuring.This was reflected in the growth in democratic police reform within security and justice assistance programmes. Assistance shifted from treating political liberalisation as an intrinsic objective to viewing it as an instrument for mitigating disorder and managing perceived threats to security and rule of law.
This transition was closely linked to neoliberalisation at home and abroad. For instance, the role of civil society evolved in Canada during this period; Ottawa offloaded governance tasks to civil society organisations, but civil society’s role expanded primarily in terms of policy delivery not policy formulation. Indeed, the rising prominence of Canadian civil society occurred at the cost of a significant transformation within the sector itself.
These civil society shifts were reflected abroad. In the Canadian context, democracy promotion remained a stated foreign policy objective but, in practice, it was often deprioritised in favour of governance and stabilisation programming. This dualism has long been discussed in critical studies of Canadian ‘middlepowermanship’, and was made explicit by Carney at Davos:
For decades, countries like Canada prospered under what we called the rules-based international order. We joined its institutions, we praised its principles, we benefited from its predictability […] We knew the story of the international rules-based order was partially false that the strongest would exempt themselves when convenient, that trade rules were enforced asymmetrically […] We participated in the rituals, and we largely avoided calling out the gaps between rhetoric and reality.
Reflecting domestic trends, civil society partnerships abroad underwent a qualitative shift. Organisations that had previously been understood as autonomous democratic actors were increasingly professionalised, contracted, and instrumentalised as service providers, governance implementers, or ‘intermediaries’ within donor architectures. Rather than serving as independent sites of political contestation, civil society actors were often recast as tools for enhancing state accountability, efficiency, and stability.
Neoliberal administrative reforms encouraged alignment with donor priorities, narrowing the space for overtly political or oppositional engagement. The result was not the abandonment of liberal discourse, but its recalibration: stabilisation replaced transformation as the implicit goal, and governance supplanted democracy as the acceptable vocabulary of intervention.
With the merging of foreign affairs and development institutions – through, for instance the CIDA-GAC merger in Canada, the FCO-DfID merged in the UK, and the AusAID-DFAT merger in Australia – the instrumentalisation of aid for foreign policy was made explicit. It had never been clearer that foreign policy was, as Canadian Prime Minister Lester B. Pearson supposedly quipped, ‘domestic policy with a hat on’.
2.3 Trump-Era Securitisation
We are now entering a new phase. Its contours have not yet been fully defined, but it has so far been characterised by intensified securitisation and the weakening of multilateral frameworks that previously provided normative cover. Moving away from Pax Americana, the United States has adopted a more explicitly unilateral and transactional foreign-policy posture, reducing its reliance on international institutions and reframing assistance in terms of national interest and strategic utility.
We are already seeing aid budgets decline, with INGOs and multilateral institutions struggling to continue operations. Global aid spending has undergone its sharpest contraction in decades, with OECD data demonstrating a fall in aid spending from USD 213.3 billion in 2023 to USD 146 billion by 2026: a highly destructive 32% cut in just 3 years, with France, Germany and the UK having significantly reduced their contributions while the Trump Administration closed down USAID.In February 2025, the UK government announced a 40% reduction in aid spending from 0.5 per cent of gross national income (GNI) to 0.3 per cent in 2027, to fund increased defence investment. This figure represents the UK’s lowest level of aid spending as a proportion of GNI since 1999, impacting the entire aid portfolio. In parallel, the EU has been decreasing overseas spend by 8.6 per cent on a yearly basis since 2023.
This pivot is illustrated by the UK’s GBP 18 billion commitment in support of Ukraine of which GBP 13 billion is committed for military support amidst its declining aid support. Meanwhile, amidst the EU’s falling aid spend, it has made available close to USD 197 billion in assistance, including USD 70 billion in military assistance, to Ukraine.
Middle powers are further exploring blended modes of bilateral and multilateral security cooperation, such as the Five Eyes. The E3 Alliance (UK, Germany, and France) that was established in 2003 has recently become an increasingly influential diplomatic coalition as a ‘go-to’ amid uncertain US commitments, including the coordination of EU and UK blended security and developmental aid.
We are also seeing very clear shifts in foreign and aid policy priorities away from governance, institutional reform, and accountability towards training, equipment, interoperability, and military-to-military ties. Many of the softer priorities are falling by the wayside. In Canada, for instance, Carney has made it clear that he would no longer describe the country’s approach as a feminist foreign policy, although he indicated that its values continue to be upheld.
Just as donor aid in the previous period followed the neoliberalising trends at home, security assistance approaches may reflect changing approaches to security and law enforcement on the domestic front. The UK government has undertaken major legislative reform ‘in response to concerns’ about peaceful but disruptive protests. This report has ‘expanded overlapping public order powers’ and shifted the law from a positive duty to facilitate protest ‘toward a system that expands state powers and emphasises control and restrictions’. Comparable dynamics are visible elsewhere among middle powers. In Canada, Ottawa introduced legislation in 2025 that both expanded border and immigration enforcement authorities (Bill C-2) and prompted civil-liberties concerns over the potential criminalisation of certain forms of peaceful protest (Bill C-9). In Australia, states have enacted and defended (and, in some cases, partially lost in court) protest-restricting public-order laws that broaden offences and policing discretion.
3. From Soft Power to Hard Security
While Carney spoke of a ‘rupture’ in the international order, the middle power transition from soft to hard power has been underway for years, involving a gradual reweighting of instruments, priorities, and geographic foci. Governance frameworks remain, particularly rhetorically, but emphasis is increasingly being placed on security cooperation, interoperability, and alliances. This shift is neither uniform nor complete, but it marks a discernible movement from soft-power development paradigms towards harder security modalities in foreign assistance.
This shift has been clear in the United States and has been most manifest since the inauguration of the Trump administration. Amidst the shuttering of USAID, Secretary of State Marco Rubio framed the future of US foreign assistance around a narrow set of strategic criteria, stating that programmes would only be continued if they could demonstrably further US national interests and align with core foreign policy priorities defined by the administration’s America-First agenda. This alignment test was designed to filter out programmes seen as being peripheral to security, trade, and partner capacity objectives, leaving only those activities the administration deems strategically justified. Since then, the assistance programmes of the United States Department of State – and the vestiges of USAID that have been shifted to it – have not disappeared, but the current administration seems unsure how best to wield their influence amidst its unveiled machtpolitik approach.
Washington is not the only place where the declining focus on soft power is palpable. In Canada, for instance, a shift has been occurring slowly over the past decade that is marked by the institutionalisation of a security engagement model centred on training, advising, and interoperability rather than large-scale combat, visible in sustained operations from 2014 onward in Iraq and Ukraine. Australia is another key example. Amidst its refocus on its Southeast Asian backyard, Australia has expanded its focus on maritime and regional security partnerships. Canberra’s Pacific Maritime Security Program, which includes the provision of Guardian-class patrol boats and associated training to Pacific Island nations, embeds capacity building and border/security cooperation at the core of its regional engagement. Meanwhile, some middle powers, such as the UK, have been even more explicit about the need for a ‘hardening and sharpening of the approach to national security across all areas of policy, already seen in a shift towards more investment in hard power’.
Much of this pivot reflects the response to non-traditional players. Amidst the protracted decline of Pax Americana, geopolitical security vacuums have opened up, and they have been exploited by a range of actors, including China and Russia. Alongside its ambitious economic investments of the Belt and Road Initiative, China has carved out a unique role for itself within the global security ecosystem, eschewing military alliances and instead bolstering the internal stability of countries using law enforcement. Likewise, Russia has increasingly exerted global influence over the past decade by trading quasi-paramilitary security and advisory services for geopolitical influence and access to natural resources, naval, and military bases, including in Syria and multiple African countries. The Kremlin’s business model has included a shift towards state-to-state dialogue on hard power to thereby open the door to Russian state-owned companies, moving from an ad hoc presence to a sustainable model. Other ‘non-Western’ regimes, including Türkiye and the Gulf states, have also expanded their global strategic interests through security, law enforcement and defence cooperation
Amidst the growing role of these players, the remaining aid funding of middle powers is being concentrated closer to home and in geostrategic regions; European donors have shifted their aid funds from long-term humanitarian and development contexts to supporting Ukraine, asserted a more concerted focus on the European neighbourhood, and placed a growing emphasis on building its own corridors to resist Beijing’s Belt and Road. The UK has similarly focused on how it can secure its geostrategic interests through increased spending on homeland security against overlapping threats from ‘state actors, terrorists and extremists and organised criminals’, which may signal clear-sighted priorities related to national security interests. Meanwhile, Australia has pulled back from its international focus, concentrating aid efforts in its Southeast Asian neighbourhood where Chinese influence has risen.
4. Conclusion: Navigating the Rupture
The aid landscape has been significantly altered. We have charted the historical trajectory of aid from the end of the Cold War until the present moment of rupture, exploring the ongoing developments that have led to the moments of change. Over those three decades, international assistance has moved from the optimism of post-Cold War developmental liberalism, through the stabilisation-and-governance logic of the post-9/11 era, and now into a period increasingly defined by securitisation and the weakening of multilateral structures.
What is changing is not only the volume of aid, but also its purpose, vocabulary, and institutional architecture. Assistance is becoming narrower, more bilateral, and more explicitly tied to national security and economic interests and alliance management, while the language of democracy promotion and civil society persists largely at the rhetorical margins.
This hardening is occurring at a moment when global need is not diminishing. Yet, the same period has seen shrinking contributions to multilateral institutions, fragmentation of donor coordination, and the reallocation of resources towards specific theatres of strategic concern, such as Ukraine. The result is a paradox: the tools designed to prevent conflict and sustain global public goods are being weakened precisely as the demand for them grows. Over time, this imbalance risks generating second-order effects (irregular migration, regional instability, organised crime, public-health vulnerabilities, and environmental stress) that could rebound on middle powers themselves.
The deeper consequence is a legitimacy gap. The retreat from value-based democracy promotion and multilateral governance leaves international assistance increasingly exposed as an instrument of transactional statecraft rather than a shared project of global stewardship. Into this space have stepped multiple authoritarian states whose models of ‘assistance’ privilege regime stability and centralised control over accountability and citizen participation. Over time, this shift risks not only eroding normative democratic consensus, but also tipping the balance of influence towards actors whose assistance models prioritise control over participation, contributing to greater geopolitical fragmentation, and reducing the space for cooperative rule-setting among middle and smaller powers alike.
For middle powers, the moment is therefore less about choosing between soft and hard power than about deciding how to combine them – and with whom. A fortress approach, in which aid becomes an extension of border control and narrowly defined security interests, is one plausible trajectory. Another is coordinated middle and emerging power cooperation that preserves selective multilateralism and bolsters collective resilience while acknowledging the new geopolitical realities. These paths are not mutually exclusive, but they imply different answers to the question of what assistance is for. If middle powers can articulate a blended model – one that embeds democratic accountability and civil security reform within necessary hard-security commitments – they may yet shape a fourth phase rather than simply react to a third.
The challenge ahead for middle power governments is managerial as much as moral. Managing the shift as a transition rather than allowing it to harden into chaos will require clarity about priorities, longer time horizons, and renewed cooperation among states that are willing and able to sustain elements of the multilateral order. It will also require recognising that governance and institutional reform are slow, often invisible investments – the absence of which becomes apparent only after crises emerge. What is lost in the near term could be paid for later in military or emergency spending.
No single middle power can replace the architecture that is eroding, but collective action can mitigate its collapse. The open question – and the policy dilemma that follows from it – is whether middle powers will adapt to a security-first ecosystem defined by great-power rivalry, or if they will attempt to anchor a portion of international assistance in principles that outlast immediate strategic cycles. The answer will shape not only the future of aid, but also the character of the international order that succeeds the one now passing.
5. Policy Recommendations
The transition now underway is unlikely to be reversed. The following recommendations do not assume a nostalgic return to earlier eras of assistance. Instead, they outline ways in which middle powers might retain influence, legitimacy, and long-term effectiveness within a more security-oriented environment.
1. Practice selective multilateralism rather than institutional retrenchment: Middle powers are unlikely to be willing or able to sustain the full breadth of the multilateral architecture that characterised the 1990s and early 2000s. However, a wholesale abandonment of multilateral engagement risks creating coordination vacuums that security spending alone cannot fill. A more viable strategy would be to identify and prioritise a limited set of institutions and mechanisms critical to shared security challenges, such as conflict mediation, public health, and climate coordination, while allowing less essential structures to contract. The objective should not be preservation for its own sake, but the retention of the appropriate institutional anchors that provide legitimacy and burden-sharing. In practice, this may involve supporting the consolidation of INGOs around priority thematic areas, identifying core departments or programming streams within multilateral institutions to preserve, while accepting the contraction of certain peacekeeping or mission-based engagements where strategic value or coordination benefits are limited.
2. Strengthen and widen horizontal coordination among middle powers: As reliance on a single international guarantor becomes less certain, middle powers could benefit from strengthening peer-to-peer cooperation. This cooperation need not take the form of rigid alliances or new treaty structures; issue-specific coalitions and flexible platforms could provide collective weight without requiring hierarchical leadership. Cooperation on maritime security, counter-terrorism, cyber governance, nuclear non-proliferation, migration management, and humanitarian logistics could, for instance, allow middle powers to amplify their influence while distributing risks and costs.
3. Do not lose sight of long-term strategic imperatives: The strategic transitions we have described will outlast individual governments. Middle powers that build cross-party consensus, institutional continuity, and multi-year planning mechanisms into their security and assistance strategies are more likely to retain credibility with partners and avoid abrupt policy reversals that undermine effectiveness. Predictability, in this context, would itself be a form of power.
4. Avoid excessive geographic concentration of aid and security resources: Strategic prioritisation is inevitable, particularly under fiscal and political constraints. Yet complete disengagement from regions that are considered to be peripheral risks generating downstream instability (irregular migration, transnational crime, and humanitarian emergencies) that could ultimately impose higher political and financial costs. A balanced portfolio that maintains modest engagement in fragile environments alongside major strategic theatres could serve as a form of preventative investment and thereby mitigate reactive crisis management.
5. Sustain civil society support as a low-cost stability mechanism: Even within a securitised aid framework, limited but consistent support for civil society organisations could provide early-warning channels, social accountability, and community-level resilience. These programmes rarely dominate budgets, but their absence could erode the social infrastructure upon which governance and security reforms depend. Maintaining them need not signal a return to idealistic agendas; it rather reflects a pragmatic recognition that long-term stability may rest on local legitimacy and soft power as much as on state capacity.
