In 2008, the Modernizing Foreign Assistance Network released a bold proposal: empower U.S. development by making the U.S. Agency for International Development a cabinet-level agency. This proposal was certainly ambitious. It helped push the conversation around elevating development as a key pillar of U.S. foreign policy, an idea we have consistently advocated, along with core principles of aid effectiveness, including accountability and sustainability.
The Trump administration has a unique opportunity to rewrite the development playbook to make our aid stronger, smarter and more driven to achieve better results for the American people, as well as people in developing countries. To seed that effort, we recently released a proposal that streamlines U.S. aid architecture into two new agencies: a consolidated aid agency and a development finance corporation. The proposal addresses key obstacles to foreign aid effectiveness with structural solutions. We hope it will spur a constructive conversation on what smart structural reform entails.
While progress has been made in the elevation of development, much more can be accomplished. President George W. Bush was the first president to include development in the National Security Strategy, and during the Obama administration the USAID administrator routinely participated in National Security Council meetings. It is encouraging that President Donald Trump gave the USAID administrator a seat at the NSC Deputies Committee table. However, none of these are a permanent measure that institutionalizes the development voice in the highest-level discussions on foreign policy.
This is why we are calling the head of a new Global Development Agency to be assigned cabinet rank. Better interagency coordination has long been an aspirational goal, but has proven hard in practice. As Peter McPherson, former USAID administrator under President Ronald Reagan, said at our launch event at Brookings, “the coordination role is going to be extremely difficult to achieve, but in fact that may be one of your strong arguments for cabinet rank.” As our world grows more complicated, these complex crises demand a coherent foreign policy from the United States, which includes giving each of the three D’s — development, diplomacy and defense — equal weight. A cabinet-level official for development would be the U.S. representative internationally on these issues and would improve the U.S. response to global challenges such as famine, climate change and pandemics such as Ebola.
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The current proliferation of programs and agencies translates into, at best, daunting coordination efforts. The Trump administration is right to want to address issues of efficiency, as long as the motivation isn’t based solely on achieving cost savings, as signaled by the arbitrary and steep cuts to State and USAID in the president’s FY18 budget request.
Our proposed Global Development Agency overhauls the existing fragmented structure — consisting of over 20 agencies involved in some kind of foreign assistance — by consolidating multiple agencies and programs under one roof. Additionally, this structure establishes clear lines of authority that are blurred by the current bureaucratic maze. In our proposal, structure aligns with mission. The State Department is enabled to focus on its strategic diplomatic mission and the GDA can focus on longer-term development. J. Brian Atwood, former USAID administrator under President Bill Clinton, spoke to this aspect of the proposal at our event saying, “consolidation is important for efficiency reasons and because you want State to be focusing on its main mission, and you want USAID to be focusing on its mission.”
Efficiency can be gained by clarifying roles and responsibilities, as well as by adopting an integrated, coordinated approach to development that is flexible within and across sectors and agencies. That is why we propose the new GDA be organized by goals and objectives instead of sectors and regions. This model breaks down silos between sectors and within countries, where there are a multitude of agencies implementing different projects at the same time with only partial knowledge of the whole picture. The State Department and the Department of Defense will remain organized by region, and the GDA will relate to them through country desks and the director receiving guidance from the secretary of state.
GDA’s five focused centers (in lieu of USAID’s current 12 bureaus) would help foster country ownership and sustainability. Our development work would establish a clear path from humanitarian assistance to partnership with the Millennium Center, which is modeled on the Millennium Challenge Corporation and would expand MCC’s best practices across the new agency.
Official development assistance is a dwindling slice of the development finance pie. Private sector resources are critical to ending extreme poverty and advancing inclusive economic growth. Recognizing the need for the U.S. government to adapt to the changing landscape, our draft proposes standing up a separate Development Finance Corporation. The DFC would put the United States’ most innovative development finance tools — Overseas Private Investment Corporation, USAID’s Development Credit Authority, and U.S. Trade and Development Agency — into a single, more robust development finance institution.
Our proposal aims to bring together the best of U.S. development efforts into a coherent structure that is driven by objectives, results and mission. With a Foreign Assistance Act that has not been overhauled since its enactment nearly 60 years ago and the administration’s redesign process for State and USAID well under way, the United States’ aid architecture is in dire need of bold ideas and creative solutions. This proposal offers several concrete avenues for how to pursue efficiencies while also empowering each of the three D’s to focus on what they do best. We look forward to a long overdue conversation in the development community as colleagues release their own proposals for how to modernize and maximize the way in which we deliver U.S. foreign assistance.
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