Reform with Impact: How the BMZ Can Meet Its Own Ambition

This article was also published as an opinion piece at Table.Media on February 24, 2026.

A great deal is at stake. Over the past five years, the budget of Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) has been cut by almost 20 percent, while global challenges have grown dramatically. This makes the efficient and effective use of the remaining funds even more important. What demonstrably works also strengthens democratic legitimacy. The German public sees it this way too: the most frequently cited reason for development cooperation is “doing a lot of good with limited resources.” Precisely for this reason, the BMZ should show where German development cooperation achieves especially strong results, and invest more in those programmes.

“We are increasing our investment in evidence-based approaches and steering much more strongly by impact,” Minister Alabali Radovan announced at the press conference presenting the reform plan in January. In it, the ministry commits to using scientific evidence even more systematically, strengthening proven approaches, and scaling back less effective ones.

What is particularly noteworthy is the willingness to phase out less effective measures and deliberately replace them with more effective approaches. This ambition shows that the ministry is serious.

What now needs to happen for the BMZ to live up to this ambition? Three points are crucial:

First: measure and compare impact strategically.

The BMZ wants to allocate funding more on the basis of evidence in the future. But real prioritisation by effectiveness will only become possible when programmes are not only strategically evaluated, but also, where possible, compared in terms of cost-effectiveness. This evidence should determine where scarce funds are allocated. Many programmes may be good when viewed in isolation, but not all are equally good in comparison to one another. Their impact often differs by several multiples.

In practical terms, this means that programme impact must be measured more strategically, compared systematically, and become the primary basis for BMZ funding decisions. The 2027 budget will be the first real test.

Second: consistently prioritise the measures with the strongest proven impact.

In many areas, including crisis prevention and the fight against extreme poverty and hunger, robust evidence already exists on which approaches are particularly effective and cost-effective. Such Smart Buys, meaning approaches that have repeatedly been shown to deliver above-average impact per euro invested, should become the standard reference point in programme planning.

One example is the Global Fund to Fight AIDS, Tuberculosis and Malaria, which has saved around 70 million lives since 2002. That is more than the population of France. At the same time, more than 20 percent of BMZ contributions already flow back to German health companies, thereby strengthening Germany’s research and innovation base. Another example is the Graduation approach, which enables beneficiaries to move out of extreme poverty through bundled support, ranging from income opportunities to coaching. It is one of the most effective and best-evidenced interventions for poverty reduction worldwide. Such Smart Buys should form the core of German development cooperation.

The new reform course is pointing in the right direction with its explicit focus on proven approaches. What matters now is ensuring that this logic permeates the entire portfolio.

Third: give the planned “Evidence Service Unit” within the BMZ a strong mandate.

The “Evidence Service Unit” announced in the reform paper could play a decisive role in making this ambition implementable. International experience shows that such units only work when they can influence key steering decisions before programmes are designed. Norway, the United Kingdom, and the United States offer strong examples of how such units have increased the effectiveness of funds worth billions.

Three core mandates are essential:

1. Direct scientific advice to, and institutional linkage with, the BMZ leadership level for impact-oriented budget prioritisation

2. A mandatory cost-effectiveness check as a standard step in programme design

3. An annual portfolio report comparing the effectiveness of different approaches within a sector and clearly identifying where major impact gains are possible

   
   

The BMZ’s reform agenda sets the right direction, and the tools needed to deliver on this ambition are already available. The opportunity to make German development cooperation more effective has rarely been so urgent, but it has also rarely been so tangible.