She wrote in an article for the Daily Telegraph aid for wealthier developing countries that fail to do so would go to developing countries that “step up” and invest in areas such as healthcare and education.
This comes as she said the UK public has “legitimate” concerns about how the UK’s £13bn aid budget is spent.
Mordaunt said the aid should be used to help countries “stand on their own two feet”.
“I will not invest when others should be putting their hands in their pockets.
“It will no longer be enough for a project simply to be achieving good things,” she said.
She added: “I want the governments of developing countries to step up and take responsibility for investing in their own people, in healthcare or education for example.
“If it chooses not to, that will inform our decision around our funding.”
Mordaunt supports the 0.7% target on aid spending, but has previously said the department should justify its spending to the public in the same way charities do.
Britain gave £1.5bn of its aid budget to “middle-income countries” in 2016, including Pakistan, Nigeria and Jordan.
In December, the secretary of state pledged to “stamp out” modern slavery through a £40m aid package.