Opinion: How USAID is primed to transition countries from aid

At his Senate confirmation hearing, U.S. Agency for International Development administrator Mark Green made it clear he expects the agency to transition away from supporting certain sectors and countries during his watch. “Every program should look forward to the day it can end,” he said.

Every president has promised foreign assistance will create the conditions under which it is no longer necessary, as Green noted. Thankfully, the new USAID administrator does not seem to endorse the White House’s push to slash aid budgets, which would arbitrarily close missions and programs without a well-developed exit strategy. USAID’s history shows that successful transitions are planned and implemented with the partner countries and driven by development priorities.

Also without supporting massive cuts, Congress has mandated since 2016 that all new foreign assistance country strategies identify triggers for transition, set benchmarks toward achieving those goals, and outline ways of moving the U.S. relationship beyond aid. With that congressional push, USAID and PEPFAR have both developed criteria for phasing out selected sectors and entire countries. So, in administrator Green’s new role, he will find USAID is already primed to move forward with this priority.

USAID’s prior experience with transitions during the 1980s, 1990s, and 2000s offers lessons learned and success stories. This experience goes well beyond the oft-cited case of South Korea, which transitioned in 1980. It includes numerous European countries such as Bulgaria, Lithuania, Portugal and Turkey, as well as Latin American nations such as Argentina, Chile, Costa Rica and Panama.

Some of these past transitions were carefully planned and implemented through binational agreements over a period of years. Those transitions utilized a wide variety of USAID legacy mechanisms, such as enterprise funds, endowments and jointly managed foundations to help maintain the economic and social progress that U.S. aid dollars had supported. USAID’s prior experience also includes sectors and missions that were abruptly cut and closed, especially in the 1990s, resulting in damaged international relations and declines in poverty indicators.

As well as learning from USAID’s history, we must also update our transition approaches. While providing a $10 million endowment for a “leave behind” foundation may have been the best option in the 1990s, the booming economies in today’s middle-income countries provide new opportunities. Five years ago, the World Bank found that developing and emerging economies were managing nearly $8 trillion in government revenues. This suggests that a USAID investment of $10 million to improve domestic resource mobilization and public financial management would be a better fit for some countries. DRM could be a more powerful, dynamic and sustainable “leave behind” strategy for 2017, since it allows countries to fund their own development priorities at scale.

USAID is prepared for carefully planned transitions in other ways as well. The recent revisions of its program cycle guidance make clear that sustainability through local ownership is central to program design and implementation. That sustainability is essential for addressing a stark risk of transitions: progress and goodwill generated by prior U.S. investments will be lost.

Rigorous impact and ex-post evaluations show local ownership is vital for creating enduring change. The sustainability and legacy of U.S. development assistance requires strengthening the capacity of local systems to produce development outcomes. USAID’s guidance describes the best practice: “align with the priorities of local actors, leverage local resources, and increase local implementation to sustain results over time.” A 2012 USAID review of its earlier transitions in the health sector concluded the same: “it is evident that sustainability or self-sufficiency rests on country-owned and country-managed processes.”

One can see a clear link between locally owned programs and the growing power of developing economies. No longer reliant on U.S. aid, they are more than ready to take the lead in their national progress and build strategic partnerships with the United States. This shift in the underlying power dynamics will manifest itself regardless of whether aid programs continue. Yet, by practicing an ownership approach to transitions, USAID would have a better chance of maintaining the progress and goodwill resulting from our support to these emerging powers and potential allies.

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