These challenge papers aim to address two key questions: how has the development challenge changed, and how could it be understood for the future; and what are the implications for development agencies and development partnerships? The first paper explores the challenges facing global development. It reviews four key challenges: persistent poverty; globalisation and socio-economic transitions; sustainable development in the context of climate change; and human security, violence and conflict. The second paper picks up the themes emerging from the first paper to address the policy and institutional responses that are needed for inclusive and sustainable development. It examines the complex institutional space occupied by the many actors, policies and instruments available to tackle these challenges, and their varied motivations and capabilities. Together, these papers highlight the context of the current development paradigm and outline potential responses.