For years, anyone defending the EU’s development budget had to make their case against a quiet but persistent assumption: money sent abroad simply leaves the European economy and does not come back.
Modelling from ODI Global and rani, due to be published in depth later this year, turns that assumption on its head. Running the EU’s development assistance at the potential levels of the future Global Europe Instrument through a standard global trade model, the analysis finds that for every euro invested in ODA, a euro of exports is generated, and furthermore around 60% the instrument’s spending is returned through GDP – generating the kind of stability in partner countries that makes those markets easier to trade with.
At the European Commission’s proposed funding level of €200 billion for the 2028 to 2034 period, that works out to increasing annual GDP by 0.10%, or €115.5 billion cumulatively across the seven years.
The next EU long-term budget (the Multiannual Financial Framework or ‘MFF’) is being negotiated right now, and development spending is a source of the EU’s competitiveness, resilience, and stability. This money creates trade opportunities and generates income – and that is before considering the knock-on effects of these investments.
The EU’s own economic benefit is a welcome side effect of its commitment to investing in development cooperation. Rani, together with our partners at the MFF Hub, has been consistent in warning against turning development policy into a vehicle to push solely (or even primarily) European interests. This study shows that investing in human development, aid-for-trade, and more through development assistance, already provides a positive economic effect for both sides. The value of this modelling is that it corrects a one-sided accounting model and shows the full benefits for both partners of investing in development assistance.
In the coming months, we will be developing these findings into a full report and publishing case studies to bring the findings to life.
Read the brief on new 2026 model estimates on the impact of EU development assistance on the EU economy.
