Reforming the international financial architecture: where do we stand?

Three years after the Summit for a New Global Financing Pact, progress on reforming the international financial architecture remains mixed. Some progress has been made, but its pace, coordination and level of financing remain insufficient given the scale of needs.

Multilateral development banks have launched reforms intended to increase their lending capacity. Tools designed to better take climate risks into account, such as debt suspension clauses and vulnerability analyses, are gradually spreading. The debate on international solidarity taxes has become more structured, while the Sevilla Platform for Action has provided an operational expression for part of the commitments made at the Fourth International Conference on Financing for Development.

These advances do not yet fundamentally transform existing balances. The governance of international financial institutions remains largely dominated by countries that retain a significant share of decision-making power. Private capital can contribute to meeting investment needs, but it cannot replace concessional finance, particularly in social sectors that are structurally less profitable.

Nor can private capital, on its own, offset the decline in concessional resources and the rise in financing costs. At the same time, debt restructurings remain lengthy and uncertain, increasing the risks of liquidity crises for many countries. The current architecture therefore continues to place a significant share of the costs of crises on the most vulnerable countries.

A major break in the recent period lies in the historic contraction of official development assistance. Over two years, as financing needs have increased, OECD Development Assistance Committee countries reduced their official development assistance by 28%, the largest decline ever recorded.

This contraction weakens trust between countries, undermines concessional instruments, reduces the room for manoeuvre of multilateral organisations and forces many actors to turn, where possible, to more costly financing solutions that are difficult to sustain over the medium term.

At the same time, the international context is becoming more constrained. The evolution of the United States’ position, rising geopolitical rivalries and the questioning of several multilateral spaces raise concerns about the capacity of established economic powers to play a leading role in producing and financing global public goods.

This evolution is fuelling demands for rebalancing from developing and emerging countries, in governance, taxation, debt and economic sovereignty.

The decline in official development assistance and the multiplication of initiatives — Accra Reset, Future of Development Cooperation Coalition, Sevilla Platform for Action, 4P coalitions — illustrate both the limits of the traditional model and the search for new frameworks for action.

These dynamics can open useful pathways if they strengthen countries’ capacity to act, mobilise additional resources, reduce power asymmetries and better connect public, private, domestic and international finance. They may also add complexity if they are not accompanied by stronger coordination, meaningful inclusion, transparent accountability processes and rigorous measurement of results.

The challenge in the coming months does not lie in multiplying commitments, but in implementing them effectively. Reforming the international financial architecture cannot be limited to shared language: it must translate into finance that is more predictable, more accessible and better aligned with the development priorities of the countries concerned, without increasing their financial, environmental or institutional vulnerability.

Four years before the Sustainable Development Goals deadline, geopolitical fragmentation, the acceleration of extreme climate events and the multiplication of conflicts are making reform efforts more complex; they also reinforce their strategic relevance.