2026 Perspectives for the Public Sector

Chris Tynan Development Finance Changing Dynamics of Development Finance T he birth of modern development finance occurred at the BrettonWoods Conference in July 1944. Amidst the devastation of WorldWar II, 44 Allied nations met to design a new international economic order aimed at preventing future conflicts by promoting global economic stability and cooperation. The architects, notably JohnMaynard Keynes and Harry Dexter White, envisioned a system that would address both immediate post- war reconstruction and longer-term economic development. 1 The Bretton Woods system served as the crucible for modern development finance, institutionalizing its practice, defining its early objectives, and establishing a robust multilateral framework to influence global efforts to promote economic development and reduce poverty. Recent developments, however, have the potential to completely upend this paradigm. Ballooning defense budgets, coupled with shrinking Official Development Assistance (ODA) and a new focus on security-driven energy investments, are fundamentally reshaping development finance, steering it away frommultilateral humanitarianism towards a strategic, security-centered model. Capital flows are now being re-prioritized towards projects that enhance national security, secure critical energy supplies, and support strategic alliances, rather than solely focusing on traditional development metrics. This shift has the potential to re-align global investment priorities in new and profound ways. 1 Boughton, J. M. (2001). Silent Revolution: The International Monetary Fund 1946–1979. International Monetary Fund. (Details on the creation and initial goals of IMF and BrettonWoods) Citi Perspectives for the Public Sector 37