A Paradigm Shift in Development Cooperation in the Era of Economic Security: International Trends in National Interest-Linked Development Cooperation, with Implications for South Korean Policy

Soyoung Lim and Hyunji Bing
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Soyoung Lim: Korea Institute for Industrial Economics and Trade
Hyunji Bing: Korea Institute for Industrial Economics and Trade

No 3, i-KIET Issues and Analysis from Korea Institute for Industrial Economics and Trade

Abstract: This report examines the increasing prominence of economic and industrial objectives in international development cooperation amid deepening national protectionism. Major nations are prioritizing national interests and practical cooperative relationships in their economic and diplomatic strategies. To navigate this changing global environment, advanced donor countries are universally and profoundly restructuring their development cooperation frameworks. An increasing number of donors are embedding economic and industrial needs into their development policies and reforming their systems to align with these goals. Countries such as Japan, the United States, Germany, the United Kingdom, and Sweden are formalizing the integration of national interests into their development cooperation policies and demonstrating a clear intent to leverage their domestic economic and industrial sectors.

This policy shift among donor countries is evident in their changing official development assistance (ODA) performance, specifically regarding the scale and target of assistance. Members of the OECD Development Assistance Committee (DAC) have recently reduced their ODA volumes, a downward trend expected to continue. The decline in support for least developed countries (LDCs) coupled with an increase in assistance for lower-middle-income countries (LMICs) signifies a strategic pivot toward partner nations with strong growth potential and viable prospects for economic and industrial cooperation.

At this watershed moment of a global paradigm shift in development cooperation, South Korea faces the task of promoting a cogent policy direction with a strong emphasis on economic and industrial dimensions. The government must elevate development cooperation into a comprehensive policy package designed and implemented within a government-wide strategic framework that links it to other policy objectives. As development cooperation tied to investment, finance, and trade will likely become mainstream, Korea needs to actively introduce and expand collaboration with the corporate sector while transitioning to a model that enables integrated support at the industrial level.

Keywords: ODA; official development assistance; development planning; industrial policy; industrial cooperation; development cooperation; South Korea (search for similar items in EconPapers)
JEL-codes: D24 F23 O25 (search for similar items in EconPapers)
Date: 2026-02-12
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Published as i-KIET Issues & Analysis No. 204

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