The Helping Industry

I. The Top Spot

In 2025, Germany was the world's largest donor of development aid. With 29.1 billion US dollars, the Federal Republic stood just ahead of the United States at 29.0 billion, followed by the United Kingdom at 17.2 and Japan at 16.2 billion. It is the first time in the history of the OECD statistics that Germany has occupied this position.

The top spot is not the result of a German increase. It is the result of an American collapse. On taking office in 2025, the Trump administration dissolved the development agency USAID and cut foreign aid by 56.9 per cent. According to OECD figures, this single collapse accounts for three quarters of the worldwide decline in development aid. Germany itself cut its own development aid by 17.4 per cent in inflation-adjusted terms in the same year — and rose to the top nonetheless, because the previous leader fell faster than the previous runner-up.

This leaves a figure on the table that must be the starting point of any honest examination. Germany spends around 26 billion euros a year on development aid. It does so in a situation in which its own infrastructure is decaying, the economy is stagnating, debt service is increasingly burdening the budget, and the armed forces demand investments in the billions. The question of whether these 26 billion are well spent is therefore not an ideological one. It is a question of bookkeeping.

II. What the Figure Contains

The 26 billion euros are not what they sound like. The term development aid suggests that money flows from Germany to poor countries in order to relieve hardship there. A substantial part of the sum never leaves Germany.

Around 17 per cent of German development contributions — roughly 4.3 billion euros — was attributable in 2025 to the care and accommodation of refugees within Germany. Under the internationally agreed accounting methods, these expenditures may be counted as development contributions in the first year after arrival. They do not flow to Africa. They flow to German municipalities, shelters, administrations. A further 8.5 per cent or so — around 2.2 billion euros — consists of the federal states' proportional costs for study places for students from developing countries. This money, too, remains in Germany, at German universities.

Of the remainder, part goes through the European Union, part to multilateral funds, part through the Foreign Office as humanitarian aid. The budget of the development ministry itself — the BMZ — amounted in 2025 to around 10.1 billion euros, that is, less than half of the 26 billion reported. The large figure with which Germany rises to the top of the world is a statistical construction in which highly disparate expenditures are gathered under one label. Part is genuine foreign aid. Part is domestic expenditure booked as foreign aid.

This observation is not meant cynically. It is the precondition for understanding at all what is being talked about when development aid is talked about. The statistics bundle together what falls apart in substance. Whoever wants to judge the effectiveness of development aid must first know that a substantial share of the sum never even reaches the position of being effective or ineffective in the recipient countries, because it never leaves the donor countries.

III. The Question of Effect

The effectiveness of development aid has been disputed for half a century, and the dispute is not settled. But the findings brought forward in this dispute are sobering.

The Zambian economist Dambisa Moyo argued in her 2009 book Dead Aid that millions of Africans are poorer today not in spite of, but because of development aid. She points to a World Bank study according to which more than 85 per cent of the funds were used for purposes other than originally intended. William Easterly, a former World Bank economist, has described in several books how the planners of the donor countries impose their big ideas on the recipient countries from above, instead of finding out what works in each case. His Tanzania example has become famous: the donors flooded the country with a thousand development missions a year; what grew effectively in the process was not the road network but a bureaucracy that produced 2,400 reports a year for the donors. The roads decayed faster than new ones could be built.

The Nobel laureate in economics Angus Deaton has formulated the most fundamental version of the critique. In an interview, he said that it is not difficult to develop a country from the outside, but impossible. Countries develop from within. This requires a government and a population working together toward development goals. Deaton's central argument is not economic but political: development aid that flows directly to governments changes the relationship between the government and its citizens. A government that draws its income from foreign donors rather than from the taxes of its citizens is no longer dependent on those citizens. It becomes less accountable to them. The aid thereby undermines precisely the mechanism — the dependence of the rulers on the ruled — that leads to the emergence of functioning statehood.

This critique is not from the right. Deaton repeatedly stresses that, given global inequality, there is a moral obligation to do something truly effective against poverty. Moyo comes from Zambia. Brigitte Erler, who in 1985 wrote the first major German bestseller of the critique, Tödliche Hilfe (Deadly Aid), was a desk officer in the development ministry and resigned after visiting her own ministry's projects in Bangladesh; her verdict was that every single component of the projects carried out under her responsibility made the rich richer and the poor poorer. The sharpest criticism of development aid comes not from its opponents but from people who have worked in it or benefited from it and who have reached the conclusion that it does not deliver what it promises.

There is another body of research that judges more cautiously. The economists Burnside and Dollar attempted in 2000 to show that development aid does contribute to growth in well-governed countries. But as early as 2003, Tomi Ovaska found the opposite in a study of 86 developing countries over the period 1975 to 1998: a negative effect of aid on growth. The state of the research is, to put it cautiously, not such as to allow the effectiveness of development aid to be asserted as proven.

IV. The Exception That Sharpens the Rule

There is one area in which effectiveness is not disputed, and it is instructive, because it shows what the other areas lack.

The vertical health programmes — narrowly defined campaigns with a single, measurable goal — have saved millions of lives. Smallpox has been eradicated since 1980, the only human infectious disease for which this has succeeded. Polio has been all but eradicated through a decades-long global vaccination campaign. River blindness was pushed back by a concerted action of the World Bank, the Carter Center, the WHO, and the pharmaceutical company Merck. Even Angus Deaton, the sharpest fundamental critic, explicitly exempts these programmes from his criticism.

Why do these work and others not? The answer lies in the structure. A vaccination programme has a clear goal, a measurable success, and a defined endpoint. One can count how many children were vaccinated, and one can determine whether the disease is receding. There is no problem of interpretation and no problem of concealment. A programme that purports to set social change in motion, to combat the causes of migration, to promote democracy, or to strengthen civil society, by contrast, has no measurable goal, no defined endpoint, and no success that could be distinguished from a failure. It cannot fail, because it never defined what success would be. And what cannot fail can be continued indefinitely.

This names the dividing line that runs through development aid. On one side, the few narrowly defined, measurable interventions that work. On the other, the great remainder, whose goals are so broadly framed that its ineffectiveness can never be demonstrated — and whose continuation is secured precisely thereby.

V. The Industry

At this point the question shifts. It is no longer: why does development aid not work? It is: whom does it serve that it does not work and is continued nonetheless?

The German answer to this question is called the Gesellschaft für Internationale Zusammenarbeit, GIZ for short — the German development agency. It is a federally owned company with around 26,000 employees and activities in more than a hundred countries. It carries out the projects — administrative consulting, climate programmes, agricultural and educational ventures. Former employees have described the organisation as a travel agency for academics' children. Through overseas allowances, even entry-level staff are offered starting salaries that, thanks to double-taxation agreements and low living costs in the developing countries, enable an accumulation of wealth of which equally qualified contemporaries in Germany can only dream.

The former German ambassador Volker Seitz, who spent seventeen years on the African continent, most recently as ambassador to Cameroon, has formulated the decisive structural finding. In every country in which he served, the GIZ — then the GTZ — had difficulty finding enough sensible projects at all to spend the allocated funds. But the funds had to be spent, because otherwise they would have lapsed. That is the core. An apparatus that is allocated a budget and whose continued existence depends on the budget being spent will find or invent projects in order to spend it. Whether the projects work is secondary to the continued existence of the apparatus. What counts is the outflow of funds.

Seitz names two orders of magnitude that should be set side by side. Over more than fifty years, around two trillion US dollars of development aid have flowed into Africa. And his verdict on the effect: the aid payments achieved little to nothing. Instead, says Seitz, they create a welfare mentality; help toward self-help becomes a hollow phrase. He speaks of an activism of good intentions that does not take note of the experience of decades.

The structure that becomes visible here is neither specifically African nor specifically German. It is the structure of any apparatus whose existence is tied to the disbursement of a budget and whose success is measured not against an external standard but against its own continuation. The apparatus has an interest in the persistence of the problem it claims to solve. A helping industry that eliminated misery would abolish itself. A helping industry that administers misery secures itself.

VI. The Missing Oversight

An apparatus of this kind can be disciplined only by external oversight. This oversight is lacking.

At the armed forces, practically every procurement of 25 million euros or more must be submitted to the budget committee of the Bundestag. Development policy is subject to no comparable parliamentary oversight. Billions flow into a web of non-governmental organisations, consulting firms, multilateral funds, and international organisations whose ramifications are barely traceable from the outside. Where success oversight is lacking and parliamentary oversight is weak, there is no mechanism that would end an ineffective programme. It continues, because nothing stops it.

That German taxpayers' money financed bicycle paths in Peru briefly brought before the wider public the question of what actually still counts as development aid. Sports fields are declared a means against the causes of migration, agricultural programmes are meant to set social change in motion. These examples are not the main point, but they are symptoms. They show what happens when a budget must be spent and the concept of what counts as eligible is stretched so wide that almost any expenditure falls under it. The breadth of the concept is no accident. It is the precondition for the allocated funds to be spent.

VII. The Geopolitical Counter-Reckoning

There is one argument for continuing development aid that is more serious than the humanitarian rhetoric, and it became visible in 2025. When the United States abruptly halted its aid, it tore holes that threatened to be filled immediately by other powers. In Nepal, where American development aid in some years made up as much as a quarter of the state budget, China signalled its willingness to take over projects. In Southeast Asia, where USAID ran a centre for a region of 650 million people, China is gaining influence. When the United States declared its withdrawal from the WHO, China announced an additional contribution of 500 million dollars.

The argument runs: development aid is not charity but geopolitics. Whoever withdraws cedes the field to the competitors. A security expert at the Berlin Global Public Policy Institute called the German cuts not in the German security interest; the United States, he said, was leaving behind a deadly gap from which China and Russia would profit geopolitically.

This argument is too serious to pass over, but it rebounds against the humanitarian self-presentation of development aid. If development aid is an instrument of geopolitical influence-securing, then it is not what it gives itself out to be. Then it is not about the poor, but about influence. Then the question of its effectiveness is not a question of whether poverty recedes, but of whether influence is secured. It is remarkable that China itself hardly takes this path: Chinese foreign aid amounted in 2024 to only 3.46 billion dollars, and 85 per cent of it is granted as loans, not as gifts. China buys influence, but it buys it as a creditor, not as a benefactor. Whoever accepts the geopolitical justification of development aid must explain why the German way — a grant without repayment, declared as aid — should be superior to the Chinese way, which binds the recipients into debt relationships and draws lasting influence from them.

VIII. What Would Have to Be Distinguished

The conclusion from all this is not that all aid is pointless. It is that the present form of development aid conflates three different things that ought to be kept apart.

The first is humanitarian emergency aid — aid in epidemics, famines, natural disasters. It is scarcely disputed. When an Ebola outbreak rages, an earthquake devastates a region, a famine threatens millions, then aid from outside makes sense, because it has a clearly delimited goal and its effect can be ascertained. This aid should be strengthened, not cut.

The second is the narrowly defined, measurable programmes with a defined goal — the vertical health programmes, the vaccination campaigns, the combating of individual diseases. They, too, work, and they, too, should be continued. Their hallmark is that they could fail and that one would notice. That is precisely what makes them controllable.

The third is the great remainder — the programmes with indeterminate goals that promise social change, democracy promotion, the combating of migration causes, structural consulting, and whose effectiveness fundamentally cannot be verified. It is this area that sustains the helping industry, because it cannot fail and is therefore continuable at will. It is this area in which the funds must be spent because they would otherwise lapse, and in which the question of effect is replaced by the question of the outflow of funds.

Whoever wanted to reform development aid would have to separate these three areas. He would have to protect and expand emergency aid and the measurable programmes. And he would have to subject the third area to the oversight it has so far lacked — to the question of what its success could be measured against, and to the consequence of ending it if it cannot answer that question.

That such a reform does not take place has a reason that lies in the apparatus itself. An apparatus whose existence is tied to the disbursement of a budget has no interest in a success oversight that might call its existence into question. It will carry emergency aid and the measurable programmes before it, because they supply its legitimation, and it will continue the great uncontrolled remainder in their shadow. The reform fails not because of the difficulty of the task. It fails because of the interest of those who would have to carry it out.

IX. The Finding

Germany became the world's largest donor in 2025, not because it gave more or more wisely, but because the previous leader collapsed. It holds this position in a situation in which its own infrastructure is decaying. It spends 26 billion euros a year, a substantial part of which never leaves the country. It finances an apparatus whose effectiveness has been disputed for fifty years and never proven, which is exempt from the kind of parliamentary oversight that would be a matter of course for any procurement of the armed forces of 25 million euros or more, and whose inner logic consists in administering the problem it claims to solve.

This is not the finding of a party. It is the finding of economists who worked at the World Bank, of ambassadors who served for decades in Africa, of desk officers who sat in the ministries themselves, and of a body of research that yields no clear result on effectiveness. Whoever passes over it because it appears to be brought forward from the wrong side passes over a matter that has nothing to do with left and right. It is about 26 billion euros a year and the question of whether they do what they claim to do.

The answer, so far as it can be given from the available data, is: in small part yes, in large part no, and the large part is so arranged that the question of its effect cannot be asked without calling into question the apparatus that lives off that question going unanswered.