PEGNet was founded in 2005 as a joint initiative of the Kiel Institute for the World Economy (IfW), Germany's Federal Ministry for Economic Cooperation and Development (BMZ), its implementing agencies GIZ and KfW Entwicklungsbank as well as the universities of Göttingen and Frankfurt. It was created to bring policymaking in line with research findings and practical realitites for development.
The founding institutions were later joined by other research institutions, individual researchers and practitioners from all over the world. Notable examples include the London-based Overseas Development Institute (ODI), the Paris-based think tank DIAL (Développment, Institutions et Ajustement à Long terme), and the Southern Africa Labour and Development Research Unit (SALDRU) in Cape Town.
Today, PEGNet has more than 100 institutional and individual members.