BUILD Act: Failed Promise for 2026 Global Equity?

Opinion: The BUILD Act, enacted in 2018, promised to reshape America’s approach to international development finance, consolidating agencies and expanding lending capacity. Yet, nearly eight years on, its impact on regional economic disparities remains largely unfulfilled, a critical oversight in its design. Has this ambitious legislative effort truly delivered on its potential to foster inclusive global growth, or has it merely re-packaged existing mechanisms without addressing fundamental inequalities?

The creation of the U.S. International Development Finance Corporation (DFC) through the BUILD Act (Better Utilization of Investments Leading to Development) was heralded as a strategic move to counter rival state-backed development initiatives and provide a more agile, complete suite of financial products. Specifically, the Act merged the Overseas Private Investment Corporation (OPIC) and the Development Credit Authority of USAID, significantly increasing the U.S. government’s capacity for development finance from $29 billion to $60 billion. This expansion included new authorities for equity investments, technical assistance, and local currency financing, all designed to mobilize private capital into emerging markets. The underlying premise was sound: by de-risking private sector investments, the DFC could attract capital to underserved regions, thereby reducing economic disparity and fostering sustainable growth. However, the practical application of these enhanced powers often falls short of its aspirational goals, particularly when examining its actual footprint in regions struggling most with systemic underdevelopment.

My concern is that the DFC, while better equipped, still tends to gravitate towards investments in more stable, albeit still developing, economies. This is a natural inclination for any financial institution seeking return on investment, but it undermines the very purpose of a development finance agency tasked with addressing disparity. For example, a 2024 analysis by the Center for Global Development found that while the DFC has expanded its portfolio, a significant portion of its new commitments still favor middle-income countries with stronger existing infrastructure and legal frameworks. The challenge for policymakers, then, lies in how to incentivize investment in genuinely difficult markets without compromising financial prudence. This isn’t about throwing money at problems. It’s about strategic, patient capital that builds foundational economic structures. Without a clearer mandate for targeting the most vulnerable economies, the DFC risks widening the very gaps it was designed to close, concentrating investment where it’s easiest to deploy rather than where it’s most needed.

The Unseen Hand of Risk Aversion in Development Finance

The BUILD Act aimed to make the U.S. a more competitive player in global development finance, offering alternatives to what many perceived as predatory lending practices from other state actors. With its $60 billion cap, the DFC has the financial muscle to make a real difference. However, the institution, despite its development mandate, operates with a strong emphasis on financial sustainability. This leads to an understandable, but problematic, aversion to high-risk environments. The problem isn’t the DFC’s existence. It’s its deployment strategy. We see a concentration of projects in sectors like energy and infrastructure, which are vital, but often in countries already on a growth trajectory. According to a recent report by the Congressional Research Service, DFC’s investments in sub-Saharan Africa, a region with acute development needs, have not seen a proportional increase relative to its overall expanded capacity, particularly when compared to investments in Latin America or Southeast Asia. This pattern suggests that while the DFC possesses greater tools, its operational biases may still favor lower-risk engagements, thus perpetuating existing patterns of capital flow rather than disrupting them to address deep regional inequalities.

The argument often made is that investing in more stable economies generates returns that can then be recycled into riskier ventures. While theoretically sound, this “trickle-down” approach to development finance has historically proven insufficient for addressing entrenched economic disparity. The DFC needs to be more explicit in its commitment to frontier markets. This means developing specific strategies for countries with weaker governance, less developed financial markets, and higher political instability. It’s not about ignoring risk, but about developing sophisticated tools to mitigate it, perhaps through blended finance structures that integrate grants with loans, or by partnering more extensively with multilateral development banks that have deeper expertise in these challenging contexts. Without such a targeted approach, the BUILD Act’s promise of strong development impact becomes diluted, merely reinforcing existing global economic hierarchies rather than challenging them. It’s a classic case where good intentions meet the cold logic of financial risk, and risk often wins, unfortunately.

Mandating Impact: Shifting from Opportunity to Necessity

To truly impact regional economic disparities, the BUILD Act’s implementing agency, the DFC, requires more specific directives. Its current mandate allows for broad interpretation, which can lead to investments that are financially sound but have limited developmental impact in the most vulnerable regions. We need to move beyond simply identifying investment opportunities and start mandating investment necessities. This means Congress should consider amendments or clear policy guidance that sets targets for investment in low-income countries, particularly those categorized as least developed countries (LDCs) by the United Nations. Plus, there needs to be a stronger emphasis on supporting small and medium-sized enterprises (SMEs) in these regions, as they are often the backbone of local economies and the primary drivers of job creation, yet they frequently struggle to access capital from traditional sources. A 2023 study published by the Overseas Development Institute (ODI) highlighted that development finance institutions often overlook SMEs due to perceived higher transaction costs and risks, despite their outsized role in local economic development.

One tangible step would be to establish a dedicated fund or a percentage of the DFC’s annual allocation specifically for projects in countries with a GDP per capita below a certain threshold, say, $2,000. This wouldn’t eliminate risk, but it would compel the DFC to develop expertise and innovative financing mechanisms for these markets. On top of that, the DFC needs to enhance its impact measurement frameworks. It’s not enough to report on the number of deals or the total dollar value. We need to see clear, verifiable metrics on job creation, poverty reduction, access to essential services, and local economic multiplier effects. Without such rigorous impact assessment, the DFC risks becoming just another lender, rather than a far-reaching force for development. This is not to say the DFC isn’t doing good work. Many of its projects are commendable. But the overall strategic direction needs recalibration to ensure its substantial resources are directed where they can achieve the most deep and equitable change.

The Imperative of Transparency and Accountability

For the BUILD Act to genuinely fulfill its potential in addressing economic disparity, the DFC must operate with unparalleled transparency and accountability. Currently, while some project information is publicly available, a more granular understanding of investment rationale, impact assessments, and geographic distribution is necessary. Without this, it’s difficult for external observers, including academics, civil society organizations, and even congressional oversight committees, to evaluate the DFC’s effectiveness in meeting its development objectives. A lack of detailed, accessible data can mask patterns of investment that disproportionately favor certain regions or sectors, inadvertently exacerbating rather than alleviating disparities.

I propose a mandatory annual report that details not just the financial metrics of the DFC’s portfolio, but also a complete breakdown of its developmental impact. This report should include specific data on projects in LDCs, investments in women-owned businesses, and the proportion of financing directed towards sectors critical for foundational development, such as healthcare, education, and sustainable agriculture. Plus, the DFC should establish an independent review panel, comprising development experts and economists, to periodically assess its portfolio against its stated development goals. This panel’s findings, including any criticisms or recommendations, should be made public. Transparency isn’t just a buzzword. It’s the bedrock of effective policy and public trust. Without it, the DFC, despite its increased capacity, risks operating in a black box, unable to fully capitalize on its potential to foster truly inclusive global growth. We, as taxpayers, deserve to know if our development dollars are making a difference where it matters most.

The BUILD Act represented a significant step forward in U.S. development finance, but its full potential to mitigate regional economic disparities remains untapped without deliberate policy adjustments. A stronger mandate for investing in the most underserved regions, coupled with rigorous transparency and accountability mechanisms, will transform the DFC from a capable financier into a truly impactful development leader. It’s time to refine this legislation to ensure its resources are directed with precision and purpose.