AbstractMotivationLocalization is increasingly invoked in debates about how to reform international aid: to improve aid effectiveness and address ethical concerns by turning hierarchical aid relations on their head. This has proved to be easier said than done. The COVID‐19 pandemic produced logistical impediments to aid practitioners, which translated into a renewed, if temporary, interest in localization.PurposeThe initial scope of the research engaged with the notion of partnership during COVID‐19, but almost all informants drew attention to the concept of localization. The article maps and analyses the challenges and advantages of localization, as seen from the practitioners' perspective.Approach and methodsThe article draws on 24 interviews conducted in Oslo with representatives of various Norwegian development and humanitarian non‐governmental organizations and government agencies, in addition to policy and grey literature review.FindingsThe article shows that the re‐emergence of the localization debate during COVID‐19 occurred not because of any ambition to reform aid, but as a pragmatic and temporary response to the logistical impediments caused by the pandemic. Reflections from the interviewees on the pros and cons offer more substantial insights into why localization fails to change practice, while at the same time localization enables a form of indirect governance related to accountability regimes. This is analysed as developmentality, reflecting the logic that localization takes place when recipients do as donors want, but they do so voluntarily, which suggests that localization counterintuitively may reinforce existing power structures.Policy implicationsLocalization is poorly conceptualized. While a definition could be helpful in practice, one that is too rigid could undermine the diversity of actors and knowledge that localization aims to advance. At the operational level, localization requires greater flexibility and slack throughout the aid chain, especially in the audit and accountability regimes of donor and funding authorities, which permeate and uphold lopsided aid relations.