A new report from the Government Accountability Office raises fundamental questions about U.S. Agency for International Development Administrator Rajiv Shah’s drive for “local solutions” to pressing development challenges. Chief among them: What are local solutions, how is USAID keeping track of them, and are they more effective than “non-local” solutions?
GAO released its report — “USAID Has Increased Funding to Partner-Country Organizations but Could Better Track Progress” — on Wednesday, after ten months investigating the agency’s progress towards increasing the amount of funding going to local organizations and host-country governments, instead of to international NGOs and contractors.
USAID set a goal of spending 30 percent of its mission funding on “local solutions” by 2015, and claimed to be at 14 percent for fiscal year 2012 in its March 2013 USAID Forward progress report.
The GAO report suggests USAID has been inconsistent in how it defines what the “local solutions indicator” should include, to such an extent that USAID’s fiscal 2012 spending on local solutions could have ranged anywhere between 14 percent, as the agency reported, and 24 percent, under its most inclusive definition of local solutions.
That wide fluctuation is largely due to USAID’s evolving notion of what its “local solutions indicator” should track, with more recent measurements including cash transfers and trust funds that were not originally counted when the agency set its 30 percent by 2015 target.
But while it might seem the report is suggesting USAID is farther along on “localization” than even the agency originally thought, the amount of funding for local solutions could be much lower if certain “strategic” countries with disproportionate local spending levels are excluded, as USAID originally intended them to be.
The GAO report points to a startling gap between those country missions with the most local solutions funding and the vast majority with far less. According to GAO, “five USAID missions — Afghanistan, Pakistan, Jordan, South Africa, and Uganda — accounted for 79 percent of all funding obligated to local organizations in fiscal year 2012.”
The inclusion of Pakistan and Afghanistan within that group could be cause for particular concern, since funding to these countries is expected to fluctuate and eventually decline significantly as the U.S. military presence in Afghanistan — and funding for “overseas contingency operation,” which has accompanied that presence — draws down to a more “normal” level.
USAID recognized this eventuality in its own initial analysis of what “local solutions” should include. The GAO report cites USAID officials who reported the agency initially planned to exclude Afghanistan and Pakistan from its “local solutions indicator” given that USAID’s engagement in those countries is “strategic in nature and including them could significantly distort overall agency results.”
If Afghanistan and Pakistan are excluded from the local solutions indicator, GAO says the “percentage of mission program funds obligated to local organizations in fiscal year 2012 … drops from about 24 percent to about 14 percent.”
All told, if Afghanistan and Pakistan are excluded from the indicator, and if the agency does not include some of the cash and trust fund disbursements it originally ignored, then progress towards the 30 percent local solutions goal has likely been dramatically slower than USAID has so far suggested.
That finding, combined with the general lack of clarity surrounding the agency’s ability to measure and track its progress boosting local solutions, could raise serious doubts about USAID’s ability to show whether or not it has met its 30 percent target by 2015 and to sustain any gains beyond the Afghanistan transition.
USAID did not respond to an email seeking comment.
Many development experts have praised USAID’s effort to direct more funding through local systems and toward local organizations. The GAO report now raises questions about whether the agency can actually demonstrate that local solutions are more effective than hiring international organizations to implement programs.
The report says USAID has “laid some groundwork for evaluating the Local Solutions Initiative,” but lacks any ability to know whether or not country missions are conducting “evaluations the agency deems appropriate for understanding the long-term effectiveness of the initiative.” USAID officials apparently told GAO that “impact evaluations of the Local Solutions Initiative are not feasible.”
This could provide critics of localization efforts with ammunition and raise questions about Shah’s much-lauded focus on evidence-based programming. It may also reignite tensions between USAID and its mostly U.S.-based implementing partners, who fear a loss of business as the agency ramps up local partnerships.
In a speech at the Center for Global Development in January 2011, Shah described his vision of USAID as a “modern development enterprise” and announced, much to the chagrin of many international consulting firms, “This agency is no longer satisfied with writing big checks to big contractors and calling it development.”
While tempers have cooled in recent months, the GAO’s report will surely reignite a conversation about who should spend the agency’s money, and how the effectiveness of local solutions stacks up against large, international grants and contracts.
USAID has plans to begin “tagging” projects that contribute to the local solutions indicator in its online registry of evaluations, according to the GAO report. That could make it easier for agency officials and others to filter aid effectiveness data and compare the effectiveness of local and non-local solutions.
In addition, the agency plans to release a new report — “Local Systems: A Framework for Supporting Sustained Development” — in coming months. It has already been released in draft form for public comment.
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About the author
Michael Igoe@AlterIgoe
Michael Igoe is a Senior Reporter with Devex, based in Washington, D.C. He covers U.S. foreign aid, global health, climate change, and development finance. Prior to joining Devex, Michael researched water management and climate change adaptation in post-Soviet Central Asia, where he also wrote for EurasiaNet. Michael earned his bachelor's degree from Bowdoin College, where he majored in Russian, and his master’s degree from the University of Montana, where he studied international conservation and development.
