International development is in a period of transition. While the outcome of this
is still unclear, this article argues that there are at least four areas in which the
project of international development is changing. First, there is a debate, especially
within the World Bank, about development strategy and how we think about
development, particularly in terms of the balance between states and markets.
This is evident in the debate over state failure and the new structural economics.
Second, there is increasing evidence of a shift in lending, away from projects of
‘small’ human development, perhaps best encapsulated by the United Nations
Millennium Development Goals, towards more transformative ‘big’ development
projects such as infrastructure. Third, ‘non-traditional’ aid donors and new
forms of private philanthropy are playing a more significant role in development
financing and this, in turn, offers developing countries a new range of choices
about what kinds of development assistance they receive. Fourth, aid relations
are changing as a result of the renewed agency of developing states, particularly
in sub-Saharan Africa, and shifts towards increased South–South cooperation are
growing as evidenced by increased funding from regional development banks and
increased trade flows. The article reviews these changes and suggests a series of
questions and challenges that arise from them for analysts of international development,
developing countries and traditional aid donors.