The Trump administration is careening down a path of attempting to merge the U.S. Agency for International Development (USAID) with the State Department, two entities that have operated as connected, but separated, agencies for decades. With the knives out on global aid worldwide, a merger is looking more and more likely. Secretary of State Marco Rubio confirmed on a trip to El Salvador that he is now USAID’s acting administrator, and Elon Musk announced early on Monday morning that President Donald Trump has “agreed” that USAID should be shut down in the wake of a massive and unprecedented aid freeze (though sources said not all of Trump’s advisors agreed with this plan). Meanwhile, Democratic Sen. Chris Murphy and others called the potential merger “illegal.”
For many U.S. allies, there is a sense of déjà vu in these events. Mergers of development and diplomatic agencies are growing increasingly popular. A merger in the U.S. could become the most consequential in a slew of similar mergers that have already unfolded worldwide.
The Trump administration is careening down a path of attempting to merge the U.S. Agency for International Development (USAID) with the State Department, two entities that have operated as connected, but separated, agencies for decades. With the knives out on global aid worldwide, a merger is looking more and more likely. Secretary of State Marco Rubio confirmed on a trip to El Salvador that he is now USAID’s acting administrator, and Elon Musk announced early on Monday morning that President Donald Trump has “agreed” that USAID should be shut down in the wake of a massive and unprecedented aid freeze (though sources said not all of Trump’s advisors agreed with this plan). Meanwhile, Democratic Sen. Chris Murphy and others called the potential merger “illegal.”
For many U.S. allies, there is a sense of déjà vu in these events. Mergers of development and diplomatic agencies are growing increasingly popular. A merger in the U.S. could become the most consequential in a slew of similar mergers that have already unfolded worldwide.
Back in 2020, then-U.K. Prime Minister Boris Johnson made a similar move. Claiming that the “distinctions between diplomacy and overseas development are artificial and outdated,” Johnson announced the decision to merge the United Kingdom’s Department for International Development (DfID) with the Foreign and Commonwealth Office (FCO), a move many development advocates called a “hostile takeover.”
The U.K.’s announcement followed similar mergers in Canada and Australia. The two countries merged their development and diplomatic ministries in 2013: Australia under then-Prime Minister Tony Abbott, and Canada under then-Prime Minister Stephen Harper, later refined as Global Affairs Canada under Justin Trudeau. Both moves raised substantial controversy.
These development-diplomacy mergers—both successful and attempted—all share similar origins. Collectively, they reflect rising aid skepticism in the period following the 2008 global economic crash. Development has long suffered from insufficient public support, as taxpayers understandably weigh spending abroad against much-needed relief at home. At the same time, the rise of China’s Belt and Road Initiative has highlighted development’s role as a strategic, rather than simply altruistic, tool of foreign policy, challenging humanitarian objectives and prizing global competition for influence.
But are mergers the answer to today’s connected global challenges? Similar attempts worldwide suggest they can be damaging.
Rather than delivering on efficiency gains, mergers are associated with dips in aid effectiveness and budget cuts that have, in turn, undermined development agendas and related security goals. Given the clear links between development outcomes, security, and stability, these cuts should raise significant pause.
Australia’s development spending has fallen by 27 percent since its merger, putting the country below the average for OECD nations. In the United Kingdom, the merger resulted in the immediate slashing of the country’s aid budget. At the same time, a National Audit Office review of the U.K.’s Foreign, Commonwealth, and Development Office (FCDO) in 2024 found the merger cost an estimated £24.7 million and resulted in a larger combined staff size than the sum of the previous FCO and DfID staff sizes.
Mergers have also driven losses in development expertise, damaging aid effectiveness. In Australia, following the country’s 2013 merger, development staff were blended into teams, sprinkling its component parts throughout the agency. Of 16 senior executive officers who departed post-merger, 13 were former AusAID staff. As one review put it, “[t]he disappearance of up to 2000 years of development experience … is starting to show at all levels—program quality and management; reputation with partners; and ability to lead and influence others.”
The United Kingdom’s 2020 merger saw similar losses as senior development officials and teams departed and dispersed across diplomatic portfolios. Former British officials Mark Lowcock and Ranil Dissanayake highlight these concerns, saying, “As currently structured, the [merged] FCDO is unable to rebuild the development expertise that was lost with the merger, or to manage its ODA [Official Development Assistance] budget with the kind of rigorous, long-term focus necessary to make a real impact.” The FCDO has been working to build back its development expertise in turn.
Most importantly, mergers have damaged the ability of experts from across sectors to effectively weigh competing factors from different perspectives in a decision, which may be damaging for both agendas. While development and foreign policy can be aligned for mutual benefit, they also come with tensions, trade-offs, and critical distinctions. As former Australian official Richard Moore insists, the two are not interchangeable, writing, “They can be successfully combined, but this requires acknowledgement of those different needs, the engineering of points of intersection and the right degrees of integration and specialisation.”
Preserving some distinctions between development and diplomacy can be vital for foreign-policy success, according to Australian diplomats I interviewed for a forthcoming book, Merging Development and Diplomacy. They explained that pre-merger, diplomats could focus on “smoothing relations,” while development colleagues could criticize weak or corrupt institutions. Once the agencies merged, they had to act in lockstep, eliminating their edge to separate diplomatic and development agendas for strategic gains.
Another challenge has been cohering geographic focus among global affairs agencies. Australia’s Department of Foreign Affairs and Trade narrowed its geographic portfolio post-merger to focus heavily on the Indo-Pacific to align more strongly with the country’s geopolitical interests, shutting down its influence in Africa and Latin America, regions where China is gaining an increased foothold. Experts I consulted suggested that this has strengthened activities when it comes to migration and climate within the Indo-Pacific region but weakened agendas in other areas such as humanitarian action and conflict prevention, which post-merger have become slapdash, lacking clear strategy, metrics, and vision as a result of drains in agency expertise on those areas.
In Canada, the merged agency struggled to balance its commitment to support women’s rights with competing trade and foreign-policy agendas. The same agency tasked with prioritizing the rights of women and girls delivered controversial arms trade deals with Saudi Arabia, one of the lowest-scoring nations on women’s rights indices.
Denmark and Norway offer alternative models. Denmark has nested its development arm (Danida) within its ministry of foreign affairs since its initial formation in the 1960s and has maintained relatively high investments in development in support of the nation’s foreign-policy agenda. Enjoying strong cross-ministry support, Danish development spending has met international targets consistently, although Danida’s practice has experienced growing securitization, moving away from its previous focus on poverty reduction toward more narrow investments. Similarly, Norway hosts aid within an arm of its ministry of foreign affairs, the Norwegian Agency for Development Cooperation, and has preserved a strong and impactful development practice within its wider foreign-policy umbrella. Though integrated within the foreign affairs ministry, it has enjoyed increasing levels of administration and autonomy, albeit with increasing challenges in administering aid flow increases.
Mergers are not all bad news. Some British leaders point to the U.K. response to the Ebola crisis in Uganda as a prime example of the benefits of their merger. The FCDO was able to bring together humanitarian tools, skills, and approaches alongside political leverage to swiftly deploy some £2.2 million to the Ebola response, together with the World Health Organization, UNICEF, and the World Food Programme, in an effort lauded for its intersectoral collaboration.
Development and diplomacy remain twin fields but perhaps are best seen as akin to fraternal twins—connected, but with distinctions—that are on a continuing quest for coherence and mutual understanding.
The two can surely benefit from continued mutual alignment, coordination, and understanding. But the U.S. will become less secure if a merger fails to heed the lessons from global experience. Mergers do not automatically cohere development and diplomacy goals, and instead often undermine them.
A better approach might preserve an empowered development corps within a joined-up global affairs bureaucracy. The United States could look to models in Denmark and Norway, for example, where development and diplomacy have maintained integration balanced with strategic separation.
Leaders must carefully review how development and diplomacy can uplift one another, without losing critical networks and expertise through reform processes. There are lessons from global experience that U.S. leadership cannot afford to ignore. Above all, clear leadership and vision around how the practices intersect, without automatically subsuming development’s role, will be critical to securing American interests.
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