• Inside Development
Past, Present and Future

The long and winding road toward US aid reform

By Nellie Bristol17 December 2010

Clockwise from the top: U.S. President Barack Obama, U.S. Secretary of State Hillary Clinton, U.S. Agency for International Development Administrator Rajiv Shah and the incoming House Foreign Affairs Committee chairwoman, Rep. Ileana Ros-Lehtinen. Photo by: Yoshi, U.S. Department of State, CSIS and U.S. Congress

When U.S. Secretary of State Hillary Rodham Clinton walked into the department’s Dean Acheson Auditorium Dec. 15 to release the Quadrennial Diplomacy and Development Review, she appeared startled by the size of the crowd. The 868-capacity chamber was standing room only.

“I appreciate the great interest that this turnout evidences,” she told the assembly of government employees, invited groups and the media. It was, indeed, a day many in the room had long been waiting for, some for years.

Global health and development were a priority for Barack Obama even before he was elected president. As a candidate, he pledged to double U.S. foreign assistance within five years, a promise from which he subsequently backtracked amid lingering financial calamities. Once in office, he renewed U.S. support for achieving the Millennium Development Goals and boosted multilateral development efforts at the United Nations and beyond.

“He is really reading the play book of many of the strongest voices in development and global health,” said Ruth Levine, then a senior fellow at the Center for Global Development, during the campaign. Levine now serves as USAID’s director of evaluation, policy analysis and learning.

A long time coming

When the fledgling Obama administration announced two parallel reviews of U.S. foreign affairs – the QDDR and the presidential study directive on global development, led by the White House’s National Security Council – aid advocates cheered, sensing the opportunity to increase aid effectiveness and elevate U.S. development policy to the level of diplomacy and defense.

Clinton announced plans for the QDDR in July 2009, and many hoped for a relatively quick process that would prompt speedy passage of foreign assistance reform legislation, shepherded by a Democratic-controlled Congress. Then came delays, reportedly caused by tensions within the administration over how duties would be divided between State and USAID. The QDDR initially was expected in the spring. Then September. Then October. As lawmakers grew increasingly frustrated, they finally received briefing documents on what would become the 216-page report Clinton released last week.

Initial reactions to the QDDR

The general reaction to the document from the development community has been positive.

“A triumph of rationality,” said Bread for the World President David Beckmann. “We were worried that there wouldn’t be enough clear focus on development, that development would be swallowed in US power. But what they’ve managed to do is set up processes that will maintain a clear focus on development within US government, but at the same time recognize that [country] ambassador[s are] responsible for maintaining overall coordination of the U.S. government.”

Also applauded was the move to house both Feed the Future, the President’s global food security initiative, and the Global Health Initiative at USAID instead of another agency such as the State Department or the Centers for Disease Control and Prevention.

The moves “recogniz[e] right there that [US]AID is to become the lead agency on development,” said George Ingram, co-chair of the Modernizing Foreign Assistance Network. “Given all the prominence the administration has put on these two initiatives, that’s a huge vote of confidence.”

USAID Administrator Rajiv Shah officially unveiled USAID’s new Bureau of Food Security Nov. 22. USAID’s assumption of GHI is targeted for the end of fiscal year 2012, but will be based on the agency’s ability to meet ten benchmarks that largely focus on its ability to activate and deploy interagency support for the program. In the meantime, the effort will be overseen by a coordinator at the State Department, who will also supervise the transition of the program to USAID. This delay, to be sure, has raised some eyebrows among aid advocates eager to see USAID take more complete control of U.S. foreign assistance swiftly.

Questions remain about DOS-USAID relations

Washington insiders have been praising the QDDR’s emphasis on conflict prevention, evidenced through the establishment of a new Bureau for Crisis and Conflict Operations.

“It speaks to prioritization of conflict response and conflict prevention as a discipline that requires tools and skills,” said Paul O’Brien, Oxfam America Vice President of Policy and Advocacy Campaigns. The document also clarified that USAID will lead in humanitarian situations while the State Department will lead in security and political crises and conflicts.

To be sure, there have been criticisms – and many open questions.

Lines of command between State and USAID remain unclear in many scenarios, O’Brien pointed out.

“Sometimes suffering is prolonged by the failure of the government to respond to the needs of their people,” O’Brien said. “But those are often the same governments the United States needs to keep onside for diplomatic and immediate security purposes. When State leads, how are they going to make sure that monies spent in those contexts target humanitarian, not political outcomes?”

Connie Veillette, who heads the Center for Global Development’s Rethinking U.S. Foreign Assistance program, echoed the criticism.

“It’s difficult to draw lines the way they’ve drawn them,” she said, calling the divisions “precarious.”

Veillette also said she was concerned about the QDDR’s lack of detail on how the Obama administration intends to streamline U.S. aid initiatives as part of its “whole-of-government” approach. More than two dozen federal entities currently run international programs, she noted, an approach that leads to overlap and confusion for aid recipients.

“How do you get coherent strategies and coordinated activities where programs are not working at cross-purposes?” she said. “It becomes much more difficult the more [separate programs] you have.”

Uncertain legislative future

The real test now, Clinton acknowledged, is implementation. Many of the reforms outlined in the QDDR are already under way at both USAID and State. But there is strong agreement among development professionals that congressional support is needed both to authorize some of the changes the document calls for and to engender long-term support for the restructuring.

“The next step is to give some of the reforms the force and durability of bipartisan legislation, so when Secretary Clinton is no longer secretary of state, a reformed State and USAID is an enduring legacy,” Bread for the World’s Beckmann argued.

Sweeping U.S. aid reform may remain out of reach next year considering the fact that most members of the Republican Party, which won control of the House of Representatives in November, have not been vocal champions of foreign assistance.

But some people see a silver lining. Beckmann, for instance, expressed the hope that the new political landscape would force Republicans and Democrats to work together on bipartisan reform.

But frustration persists among aid advocates who say that delays in the QDDR process have made it harder to achieve much-needed reforms.

“They took way too long to get to this stage; they missed an entire legislative session,” said Alan Chvotkin, executive vice president and counsel for the Professional Services Council.

Jim Kolbe, a former Republican member of Congress now with the German Marshall Fund and MFAN, hit a similar note.

“This is probably not going to be a high priority,” he said of foreign assistance reform in the Republican-controlled House, which will assume work on Jan. 5. “What’s going to be different from the current Congress is that you will have a chairman of the [House Foreign Affairs] Committee who is committed primarily to cutting foreign assistance.”

Reform supporters will “have to work very hard to try to help her and her committee and her staff understand the importance of soft power to U.S. security,” Kolbe added.

Indeed, the incoming House Foreign Affairs Committee chairwoman, Rep. Ileana Ros-Lehtinen, has made it no secret that she would pursue cuts to the foreign affairs budget. The Florida Republican also wants to push multilateral reform and cut U.S. contributions to the United Nations.

The Obama administration’s take

But Anne-Marie Slaughter, State Department director of policy planning and a key architect of the QDDR, said the reforms do not require a large influx of funding. Many of the planned reforms should appeal to lawmakers interested in making government more efficient, she said after the document’s release.

In the long run, the reforms should be cost savers, USAID Deputy Administrator Donald Steinberg told congressional staff Dec. 16. They would reduce the agency’s reliance on contractors, which he said is more expensive than the agency using its own resources. In addition, he said, the focus on conflict prevention could save large amounts of money if it could avert military involvement.

Although large amounts of additional funding won’t be required, Slaughter said, State and USAID are counting on Congress to stick to its current fiscal commitments which provide funding for additional hiring.

“We can’t do what Congress wants us to do without the bodies,” she said, referring to ambitious hiring plans that are part of USAID’s Development Leadership Initiative.

Slaughter said she did not want to “pre-judge” next year’s chances for aid reform, saying: “We have to see where we are with the new Congress.”

Procurement reform

USAID’s plans to increase in-house capacity and reform procurement is of particular importance to the agency’s contractors, a group whose staff includes many former USAID employees who left during the years the agency was shrinking.

Such reform may result in more but smaller contracts – and a need for more contract officers to administer them. And while USAID has increased hiring over the last several years, the agency continues to suffer a shortage of mid-level personnel; additional expertise will be needed to carry out procurement reforms being established.

“If the staffing comes along with the proposed reforms it could be very workable,” one contractor told Devex. “I would question whether they are large enough to fully implement what they’ve got on paper so far.”

A growing appetite for budget cuts among lawmakers, and especially the new Republican majority, could complicate even efforts meant to eventually save government funds.

Any sign of fraud, waste or abuse could also prompt Republicans to question whether USAID was ready to engage an entirely new set of partners in the developing world and beyond.

“The problem is, when you’re going to a brand new organization in a country that you’ve never worked with before, you tend to have occasional fraud or missing money,” one contractor said. “As soon as the Republicans see that, the pendulum starts to swing back toward more accountability of taxpayers’ money.”

Meanwhile, USAID partners remain on high alert, worrying that politics and ideology – rather than empirical data – will drive procurement reform.

“There is a lot of good stuff in the QDDR,” one official with a major USAID contractor told Devex. “The concern is it should be driven by what’s best for development, not ideology. Otherwise we’re doing the developing world a disservice.”

Contracts should be awarded to “whoever can deliver the best results for the people we’re tying to assist,” he noted.

The debate on who that might be will continue long beyond Clinton’s release of the QDDR.

About the author

Biopic3
Nellie Bristol

Nellie is a Washington-based correspondent whose Devex coverage has focused on international development and global health. She holds a master's in public health/global health and has more than 20 years of writing experience with publications such as The Lancet, Health Affairs and Global Health magazine. She also works with the Aspen Institute's Ministerial Leadership Initiative for Global Health and the Kaiser Family Foundation.


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