As donor governments slash foreign-aid budgets, the critical frameworks that have helped sustain weak developing countries are beginning to unravel. With foreign powers competing for control over natural resources, the world may be drifting toward a twenty-first-century version of the ‘Scramble for Africa’.
By Ricardo Hausmann
CAMBRIDGE – When you look at a building, you can see its walls, windows, and decorative flourishes but not the hidden structure that holds everything together. Yet during an earthquake, or after years of strain, that unseen framework can suddenly collapse. The same is true of the fragile political structures that support much of the developing world.
In 1651, Thomas Hobbes – deeply affected by the violence of the English Civil War – called for a Leviathan: a powerful state capable of imposing order and preventing chaos. Without strong government, he warned, life would be “solitary, poor, nasty, brutish, and short.” But as history has shown, creating such a Leviathan is more difficult than simply wishing one into existence.
This was not immediately evident during the great decolonization wave of the twentieth century. Since World War II, more than 130 new countries have gained independence – around 80 across Africa and Asia and 20 in the Caribbean and Pacific Islands. The remainder were formed following the dissolution of empires and multinational states like the Soviet Union and Yugoslavia.
The global decolonization wave was fueled not only by people’s desire for self-determination but also by active support from the United States, which saw independence movements as a way to weaken both European imperialism and Soviet expansionism. In his 1949 Point Four Program, US President Harry Truman laid out his postwar blueprint: support the United Nations in safeguarding territorial integrity, rebuild Europe through the Marshall Plan, promote decolonization, and provide technical assistance to the world’s poorest regions, including nascent states. The goal was to replace colonial Leviathans with homegrown ones, supported by a framework of international cooperation.
Europe’s reconstruction was a resounding success. But building new Leviathans across the Global South has been far more difficult – and costly – than Truman imagined. The initial euphoria of independence soon gave way to chaos, as more than 60 new countries faced civil wars, separatist uprisings, military coups, and ethnic violence. In countries like Syria, Sudan, Ethiopia, Nigeria, and Colombia, state authority has been routinely contested by armed groups. And even where peace has endured, it often rests on a complex scaffold of international aid, technical support, and external mediation.
Today, more than three-fifths of Sub-Saharan countries rely on active International Monetary Fund programs. These agreements act as financial anchors, unlocking additional aid from development banks, donor governments, and philanthropic organizations. Moreover, aid flows provide more than 700 million people in low-income countries with foreign exchange equivalent to roughly half their countries’ total imports.
In countries like Ethiopia, Mozambique, Madagascar, and Malawi, international aid finances more than 50% of government expenditure. While this global support system has helped weak states stay afloat, it has also forced them to balance the needs of their citizens with the demands of donors and creditors.
Over the past few months, US President Donald Trump’s administration has ruthlessly dismantled the very institutions that sustained this delicate arrangement, shutting down the United States Agency for International Development (USAID), slashing funding for the Millennium Challenge Corporation, and withdrawing from the World Health Organization. It has also toyed with imperial-style ambitions, with Trump threatening to assert US sovereignty over Greenland, Panama, and even Canada. Meanwhile, the United Kingdom and other donor countries have cut their foreign-aid budgets as well.
The consequences could be severe. Weak developing-country governments will be increasingly challenged by militias and warlords, while stronger ones – emboldened by Trump’s brazenness – might look outward and try to annex resource-rich neighbors. All will search for new foreign patrons, and those unable to pay in cash will offer preferential access to their mineral wealth, ushering in a new era of resource colonialism.
Much of this is already happening. The Wagner Group, Russia’s notorious private military company, has operated in Burkina Faso, Mali, Sudan, Libya, and the Central African Republic, exchanging military support for access to gold, diamonds, and other valuable resources. At the same time, Turkey, Egypt, the United Arab Emirates, Iran, and Saudi Arabia have all backed rival factions in Sudan’s ongoing civil war.
China, by contrast, has taken a more institutional approach, emerging as the largest contributor to UN peacekeeping missions. But it also has a strategic interest in protecting its African investments and promoting its defense industry. China already maintains a military base in Djibouti and has secured port-access agreements with Equatorial Guinea as well as with developing countries outside Africa, including Pakistan, Cambodia, and the Solomon Islands.
Donor support declines
As borders grow increasingly unstable and donor support declines, fragile states risk becoming battlegrounds for proxy conflicts, with external powers competing for influence and control over local resources. The parallels to the late nineteenth century are striking: following a surge in colonial tensions, European powers convened the 1884-85 Berlin Conference to avoid war among themselves by dividing Africa into spheres of influence. It was a brutal bargain, but to its architects, it seemed better than chaos.
These developments raise a fundamental question: Are we sleepwalking into a twenty-first-century version of the Scramble for Africa? If so, that would be a historic tragedy. While Truman’s vision of a peaceful, rules-based international order has proven harder to realize than hoped, it remains humanity’s best hope for achieving global stability. Tearing down the institutional scaffolding that supports fledgling states may deliver short-term savings, but at the cost of long-term disaster.
Ricardo Hausmann, a former minister of planning of Venezuela and former chief economist at the Inter-American Development Bank, is a professor at Harvard Kennedy School and Director of the Harvard Growth Lab.
Copyright: Project Syndicate, 2025.
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