The Bewildering Web of U.S. Foreign AssistanceAugust 20, 2007 By Sean PeoplesThe calls for a more effective U.S. foreign assistance framework have been deafening lately. Although official foreign aid has increased substantially over the last five years, its fragmented organization and lack of clear strategic objectives have been coming under greater fire. More than a year after President Bush announced the new position of Director for Foreign Assistance, a move meant to unify and streamline foreign aid, many prominent voices in the development community argue that substantial reform is still needed to effectively alleviate poverty, strengthen security, and increase trade and investment in developing countries. CARE International’s announcement last week that it would forgo $45 million a year in federal financing is a clear indication that our development strategy is plagued by paralysis on all levels. This post attempts to highlight several different scholars’ innovative approaches to reforming U.S. foreign assistance.
Several critics offer a clear set of reforms, including Raj M. Desai and Stewart Patrick. Desai, a visiting fellow at the Brookings Institution, recommends consolidating the numerous aid agencies and departmental programs into one cabinet-level department for international development. Patrick, a research fellow at the Center for Global Development (CGD), advocates a complete overhaul of the 1961 Foreign Assistance Act, given the outmoded law’s lack of clarity.
Patrick’s colleagues at CGD analyzed the President’s budget and found that “the U.S. continues to devote a relatively small share of its national wealth to alleviate poverty and promote self-sustaining growth in the developing world.” Moreover, according to Lael Brainard, vice president and director of the Global Economy and Development program at the Brookings Institution, aid is not usually distributed purely on the basis of need. “In dollar terms America continues to place far greater emphasis on bribing nondemocratic states than on promoting their democratization.”The inefficiency and fragmentation of our current foreign aid structure stems from several cumulative factors, including: numerous competing strategic objectives; conflicting mandates among government and non-governmental organizations; jockeying between the congressional and executive branches for a slice of the pie; and countless organizations overlapping their efforts. Wading through the web of legislation, objectives, and organizations comprising U.S. foreign assistance efforts is a dizzying exercise, as illustrated by the chart above.
Helping us untangle this confusing web is a new book, entitled Security By Other Means: Foreign Assistance, Global Poverty, and American Leadership. The book, edited by Brainard, compiles the findings of the Brookings-CSIS Task Force on Transforming Foreign Assistance in the 21st Century. Not shying away from the nitty-gritty of foreign assistance policy, Security By Other Means delves deep into the current development assistance framework and recommends valuable reforms, which include: integrating strategic security concerns; formulating clear objectives; understanding recipient country capacities; and building effective partnerships that exploit comparative advantages.
Calls for reform have not fallen on deaf ears. Last month, Brookings held a briefing on Capitol Hill discussing foreign aid reform, while the Senate Foreign Relations Committee sponsored a hearing entitled “Foreign Assistance Reform: Successes, Failures, and Next Steps.” The hearing featured testimony from the Acting Administrator for USAID and Acting Director of Foreign Assistance, the Honorable Henrietta H. Fore, as well as three leading experts on foreign assistance: Lael Brainard; Sam Worthington, president and CEO of InterAction; and Steve Radelet, a senior fellow at CGD. Fore committed to “simplifying the process” and integrating the numerous spigots of money flowing outward. However, it was the three NGO experts who presented a more realistic critique and set of recommendations. For these critics, rapid globalization and the inevitable integration of international economies are the impetus for a more unified and harmonized foreign aid structure. A clear consensus emerged from the three experts’ recommendations: promote local capacity and stakeholder ownership; favor long-term sustainability over short-term political goals; and encourage the consolidation and coordination of the disjointed aid structure. While federal aid stagnates, private foundation donations are growing steadily and are poised to overtake official governmental aid. Moreover, private businesses have been steadily expanding the scope of their humanitarian work. Private businesses and foundations have the advantage of being able to avoid much of the bureaucratic red tape involved with governmental aid. Nevertheless, an attempt by business interests, private foundations, and federal foreign assistance to integrate their approaches and build technical capacity could only be a positive step.