Is Altruism in Nordic Foreign Aid Dead?
New study by Salma Mahamed examines how Nordic aid has shifted in the 21st century
Trump’s decision to dismantle USAID and significantly cut the budget of the world’s largest aid provider in 2025 pushed the aid world into a new reality. But shifts in global development cooperation go further back and have also quietly taken root among the most generous donors: the Nordics.
Since the early 2000s, Denmark, Norway, and Sweden, viewed as altruistic donors allocating the highest share of aid relative to their economies, have shown signs of change. Aid budgets have declined, and the geographical distribution of their assistance reveals that the poorest and least developed countries have been disproportionately affected. At the same time, a growing share of aid is being channeled through domestic financial institutions focused on private sector–oriented development, often with strong ties to domestic firms. Political priorities have also evolved, with poverty reduction no longer the sole guiding objective. Instead, aid policies have broadened to address other areas, including migration and security.
This paper asks whether these developments signal a substantive shift and whether Nordic foreign aid has departed from its historically altruistic foundation. Drawing on empirical evidence from Danish bilateral aid between 2000 and 2019, the study uses panel data and tobit regression analysis to assess how aid patterns have changed.
The findings show that Danish aid underwent a notable shift after 2010, with greater allocations to recipients with strong trade ties and to conflict-affected areas suggesting a growing influence of economic and strategic interests. At the same time, support for the poorest countries remains robust. Overall, the study finds that Nordic aid has become more commercially oriented, while still maintaining a strong commitment to poverty reduction.
Although the paper focuses on a small group of donors, these changes reflect broader dynamics visible across other donor countries, many of which are reconfiguring their aid policies in line with national economic agendas. For donors with less historically embedded poverty-focused approaches, the consequences of this shift may be even more pronounced.
Recently announced aid budget cuts may further exacerbate concerns about the future direction of development cooperation and raise questions about what global aid will look like in the years to come.
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