In July 2025, the United States Agency for International Development (USAID) officially shut down. The move had been one of the first major actions taken by the Trump administration in his second term and terminated 80 percent of USAID’s thousands of programs. Prior to its dismantling, the agency had contributed much to the United States being the long-standing largest donor of global health and development funding. Now, more than a year later, it has become clear that the impact of U.S. foreign aid cuts has extended far beyond just global health. U.S. foreign aid and its advancement of international development was deeply intertwined with the promotion of democracy abroad, and the dissolution of this infrastructure has enabled authoritarian practices and—in many cases—contributed to democratic backsliding. 

Following its establishment in 1961, USAID was tasked with distributing foreign aid and development assistance globally. As many as 31 countries depended on USAID funding for at least a quarter of their foreign aid, and the agency was credited with significantly reducing adult and child mortality rates over the past two decades. The agency’s assistance covered global health, humanitarian assistance, economic development, and democratic governance. Two months following the shutdown, the Associated Press reported deadly consequences, including “widespread severe hunger, shortages of lifesaving medicine and spikes in child marriage.” The foreign aid cuts also immediately threatened access to education for 23 million children and the loss of basic healthcare for up to 95 million people.

A lesser-known genre of USAID initiatives promoted democracy abroad through partnerships with local governments and non-governmental organizations (NGOs). Last year, the Trump administration terminated 97 percent of USAID contracts in areas of democracy, human rights, governance, and peacebuilding, amounting to $1.7 billion in aid cuts in this sector alone. It has now become evident just how important USAID’s pro-democracy initiatives were. 

The withdrawal of USAID programming in this sector has given some governments political cover to crack down on civil society organizations, leading to democratic backsliding. As defined by David Waldner and Ellen Lust, democratic backsliding “entails a deterioration of qualities associated with democratic governance.” This deterioration might be difficult to spot at first. In line with Ozan Varol’s concept of stealth authoritarianism, governments such as Georgia’s ruling Dream Party or El Salvador’s legislative assembly have cited the so-called USAID “scandal” to make efforts to surveil and dissolve independent media/civil society organizations. Varol frames stealth authoritarianism as a mechanism that conceals “anti-democratic practices under the mask of law,” which is precisely what has followed the controversy surrounding USAID’s dramatic shutdown. Specifically, that controversy can provide governments such as Georgia’s Dream Party with justification for measures that weaken independent oversight in a manner that presents them as addressing legitimate concerns about foreign influence. Acts of stealth authoritarianism not only contribute to democratic backsliding, but they can be especially harmful because they are difficult to detect, making them easier to quietly build. 

In addition to providing a definition of democratic backsliding, Waldner and Lust noted that backsliding was either a deterioration in the quality of democracy within democratic regimes or a decline in democratic qualities of governance within autocratic regimes. U.S. funding cuts have induced both definitions within a year of USAID’s shutdown. In fragile democracies, the sharp reduction in aid has threatened independent media, a precursor to vertical accountability. An estimated $150 million loss in annual U.S. funding toward promoting independent media has resulted in the shutting down of critical media outlets, fueling disinformation. And in some authoritarian regimes, outlets that previously relied on donor funding have entirely collapsed. In many cases, the loss of these outlets has translated to the loss of the only independent actors that were tracking corruption in authoritarian countries. Simply, vertical accountability, which is a necessary democratic quality, is wounded by the withdrawal of U.S. funding.

Threats to media outlets are just one of many factors deteriorating democracy abroad following USAID’s dismantling. USAID cuts have also damaged justice systems, particularly infrastructure that supported human rights defenders or victims of torture. Much damage has been done to NGOs, including rule of law initiatives being canceled in over 100 countries. 

Serbia represents a warning sign. USAID’s dismantling accelerated democratic backsliding in Serbia by giving authorities justification to crack down on independent groups. Serbian officials have reversed their previously positive stance on USAID projects, accusing them instead of fostering a “colored revolution.” Using the U.S. government’s own language of specific USAID-backed projects being considered “wasteful spending,” Serbian authorities have threatened organizations that previously partnered with USAID to catalyze reform in areas such as anti-corruption and inclusive education. The Serbian government has even executed unannounced raids on civil society/election monitoring organizations and promoted a smear campaign on independent groups. Although the causal link between USAID withdrawal and Serbia’s democratic deterioration cannot be made with certainty, the country presents a compelling case for how a loss of external support can weaken government transparency and accountability. 

One prominent counterargument advanced by some is that the United States shouldn’t spend American taxpayer dollars on “wasteful” foreign aid initiatives. However, evaluating foreign aid solely on its initial cost is a poor mechanism of assessment. There is ample evidence that global development is beneficial for all development through the expansion of global markets, trade, and the fostering of international and strategic partnerships. Foreign aid has also expanded the United States’ sphere of influence. USAID’s efforts to promote democracy and human rights abroad had been in alignment with American values, thus spreading those values thousands of miles from Washington. The dismantling of USAID has left a vacuum that autocratic powers are eager to fill. Geopolitical adversaries like China and Russia, which are historically known for inserting authoritarian practices into the Global South, have already begun to inject their own funding and influence into regions that previously relied on USAID. Thus, not only is this trend detrimental to U.S. foreign influence in the long run, it also compounds the threat to democracy worldwide. 

So, what now? A June 2026 report published by the Rockefeller Foundation found that eight in ten Americans agree that the “path forward is to reform and strengthen what works in foreign aid programs, not eliminate them.” To this end, the Center for Global Development has some optimism, arguing that it could be politically feasible to restore U.S. foreign aid infrastructure on even stronger foundations. Until that time comes, however, the remnants of USAID were transferred to the Department of State, which currently operates surviving programs. At the very least, the State Department ought to build back lost expertise from the dissolution of USAID by working closely with local communities and hiring more experts.

Government accountability and a durable civil society are central pillars of democracy. Had USAID funding continued, civil society organizations, independent media outlets, and rule-of-law initiatives in countries like Serbia may have been better equipped to withstand government pressure to weaken accountability. Although foreign aid alone cannot prevent democratic backsliding, its withdrawal may have amplified existing vulnerabilities to authoritarian practices. As such, USAID’s dissolution represents a significant challenge to the preservation of democracy, and the potential long-term implications are dire.