A window for US aid reform?

A man uses a forklift to transport relief supplies at a U.S. Agency for International Development shipping and logistics facility in Miami, Florida. Photo by: Lance Cheung / U.S. Department of Agriculture / CC BY

If President Donald Trump’s administration undertakes a good-faith effort to improve United States foreign assistance programs, there will be plenty of advice on how best to do it.

Already this month, three leading development think tanks have released detailed, thoroughly-argued blueprints for U.S. aid reform, covering issues ranging from hiring and personnel management, to contracting and procurement, to changing the way America delivers humanitarian assistance. They are hoping to find a receptive audience in a White House that has sent shockwaves through the State Department and U.S. Agency for International Development by signaling it plans to carry out a heavy-handed reform.

The proposals represent a stark contrast to the “cut first, ask questions later” approach the White House has taken so far. The president directed all federal agencies to undergo organizational and staffing reviews to find programs and people they can cut — but before that process even started, Trump proposed slashing the U.S. foreign affairs budget by more than 30 percent. The administration has also reportedly explored merging USAID into the State Department in an effort to achieve greater efficiency, though that idea has met criticism from multiple directions.

While the White House’s skepticism of U.S. foreign aid programs has caused many in the development community to hope for the best and plan for the worst, some policy thinkers are trying to use the president’s rejection of the status quo as a lever to pry open a window for genuine reform. Some of them see the Trump team’s willingness to challenge existing structures as an opportunity.

“We need to proceed with reform deliberately and strategically … not proceed with hasty and arbitrary cuts to development assistance when we haven’t conducted [any] strategic analysis.”

— U.S. Senator Todd Young

For years, reform advocates have tried to dislodge an antiquated and fragmented U.S. aid system from the vested interests and bureaucratic inertia that make it difficult to update. The governing document that describes U.S. development programs — the Foreign Assistance Act — was written in 1961. The new initiatives, temporary fixes, and layers of regulation that have accumulated on top of that document in the intervening decades fall short of describing a global development enterprise that reflects how the world has changed in the last half century.

“The Trump administration is right. They are right to call for improved efficiency, improved effectiveness, and more accountability in our nation’s foreign assistance programs. The question is how best to achieve that improved efficiency, effectiveness and accountability,” said Senator Todd Young, a Republican from Indiana who — alongside New Hampshire Democrat Jeanne Shaheen — chairs a new task force on foreign aid reform.

In Trump’s White House — which has already floated some dramatic ideas most development professionals oppose — some therefore also see a disruptive force that could be harnessed to bring about positive change.

At least one group — the Modernizing Foreign Assistance Network — threw their previous advocacy agenda out the window after Trump’s election victory.

“We realized that politics had totally changed, that the normal nature of business was being totally disrupted, and that we needed to focus on — not the nice little steps that could be taken to make assistance more effective — but we needed to focus on the big picture, because the big picture was being challenged,” said George Ingram, MFAN’s co-chair and a senior fellow at the Brookings Institution.

An alternative agenda

MFAN secured more than 100 bipartisan endorsements of a set of broad principles for aid reform. The organization's co-chairs drafted a proposal that would consolidate the 20 or so existing U.S. development programs into two main agencies, reduce the number of geographic and functional bureaus from 12 to 5, and elevate a “director” of global development — who would lead a new U.S. Global Development Agency — to the president’s National Security Council.*

“We needed to do something more than defend the status quo, and the best strategy was to put out a bold proposal … and demonstrate that there were alternative ideas to merger — and why merger didn’t make a lot of sense,” Ingram said.

Others see an opportunity to caution the new administration against some of the sweeping changes it has reportedly entertained. Given widespread disagreement with the idea of merging USAID and the State Department, pursuing that plan would mean entering a costly fight the administration might not win. In lieu of that the White House might consider some smaller changes that could actually help achieve its stated goal of optimizing U.S. development programs, according to experts from the Center for Global Development.

No intent to merge USAID into State, says deputy secretary of state

The administration does not currently intend to merge the United States Agency for International Development into the State Department, Deputy Secretary of State John Sullivan told the Senate Foreign Relations committee.

“We wanted to make the point that there is a real agenda for constructive reform that doesn’t have to involve folding anyone into anyone else,” said Jeremy Konyndyk, a CGD senior fellow who directed foreign disaster assistance during the Obama administration.

“There’s been so much focus in the media and so much speculation and fear in the development community about a State-AID merger or other things in that vein. Our council here is, walk before you run on some of that,” Konyndyk said.

CGD’s proposal calls for organizing U.S. development around four core priorities: Fragile states, inclusive growth, global health, and humanitarian assistance. The authors also propose a set of 14 “immediately actionable reforms,” including building flexibility into USAID’s procurement system so it can respond faster in unstable environments and making the agency’s hiring mechanisms more “rational.”

“There might be big talk around huge reforms, [but] those require really big lift and previous attempts have not been successful,” said Cindy Huang, a CGD senior fellow who served at the Millennium Challenge Corp. and State Department.

“The piece that I think is targeted for this time is, what are the practical steps that we can take — not all easy, but relatively modest compared to other proposals that have been put out recently — that will ‘grease the skids’ or really have a chance at building momentum?” Huang added.

All of the reform proposals have driven home a message that lasting change will require cooperation that extends beyond the White House, and particularly to the U.S. congress. Senators Young and Shaheen lent their names to a reform task force organized by the Center for Strategic and International Studies, which launched its proposal this week.

“We need to proceed with reform deliberately and strategically. That means, not proceed with hasty and arbitrary cuts to development assistance when we haven’t conducted [any] strategic analysis,” Young said.

The CSIS proposal, alongside a bill that Young and Shaheen introduced in the senate, calls for the creation of a new national development strategy, which would outline how global development investments support the U.S. national security strategy — and align resources and policies to do that.

While more specific recommendations would stem from the new strategy, CSIS’s report points to areas the task force thinks are ripe for reform. They include closing some non-critical country missions and programs, devising a process to transition countries off of U.S. assistance, and reforming personnel systems. The task force also specifically rejected some Trump administration proposals, such as merging USAID’s development assistance account with the State Department’s economic support fund.

“At a think tank what is our main purpose? ... Sometimes what we’re here to do is to stop stupid stuff from happening. I think very much that’s what we’re trying to do with this report,” said Connor Savoy, a CSIS deputy director.

What comes next?

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Last month, Acting USAID Administrator Wade Warren announced — in an email obtained by Devex — a “Transformation Task Team,” which will coordinate the review process in line with President Trump’s executive order on reorganization. That team is led by Jim Richardson, a senior adviser to USAID, who served as chief of staff to former congressman Mike Pompeo, now Trump’s Central Intelligence Agency director.

“This team will bring together all of the previous internal workstreams, public comments, views from USAID leadership, and external stakeholders to best represent USAID,” Warren wrote in the email.

So far it’s not clear whether any of the three recently-released proposals have found their way formally into the review process. The CSIS proposal has the advantage of accompanying legislation that would see its “national development strategy” codified into law. The three groups that have produced proposals are well-aware of each other, and part of the path forward could be collaboration.

“What we’ve seen in the last six weeks is people coming to this space,” said Ingram. “People on the Hill are starting to pay attention to this, and I hear, indirectly, that people in the administration are paying attention,” he added.

In public discussions of the reform ideas, members of the development community have expressed a few reservations though.

“I think we have to be careful … around efficiency and effectiveness,” said Michele Sumilas, managing director at Bread for the World and former USAID chief of staff.

“When I was at USAID we tried to find efficiencies and we made these assertions we were going to save hundreds of millions of dollars … There is not hundreds of millions of dollars of efficiency in the system,” Sumilas said.

Others questioned whether the U.S. development community should accept the basic premise underlying many of the reforms — that in order not to be drastically cut, U.S. aid programs need to do better.

“For a long time it’s been my opinion that the development community’s been on defense … It’s a very awkward position to be in because it feels like we’re trying to stave off bad things from happening,” said Larry Cooley, president emeritus of MSI.

“What would it really take to try to pull together a forceful consensus of people that does not feel like trying to defend something that was, but really tries to make the best case for something that might be?” he asked.

* Update, July 28, 2017: This article has been changed to clarify that MFAN secured 100 endorsements of its principles for aid reform, while the specific proposals reflected the views of MFAN's co-chairs.

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