The Organization for Economic Cooperation and Development just released a report that gives a more comprehensive look at U.S. foreign assistance from the outside than we have seen in some time. Though these reports seldom get much attention, this one offers constructive input at a challenging time, as the U.S. moves to reform its assistance program and consolidate the last decade’s development gains at a time of falling budgets.
Shepherded by Brian Atwood, chairman of the OECD’s Development Assistance Committee and a former administrator of U.S. Agency for International Development, the report notes areas of progress since the last DAC review of U.S. assistance in 2006. Since then, the U.S. has met its commitment on volumes of assistance, while improving coordination between the Department of State and USAID, driving development innovation through the Millennium Challenge Corp., and focusing more sharply on results. Each area of progress has meant more lives saved in poor countries.
The report also devotes considerable attention to the critical issue of foreign assistance reform, which had gained but then lost traction over the last year in Washington. The DAC commends the Obama administration for its efforts to drive reform through new policies, including the first-ever presidential policy directive on global development, the Quadrennial Diplomacy and Development Review, and the Millennium Development Goals strategy, all released in the latter part of last year. In particular, it commends the U.S. for increasing its multilateral engagement on development policy and showing renewed emphasis on key aid effectiveness principles from the Paris Declaration.
But the DAC also echoes the anxiety many development watchers feel about whether the U.S. has the political energy to push the reform agenda forward. For our security, our economic competitiveness, our global leadership, and the well-being of millions of people in the developing world, reform progress is essential.
To keep reform moving, the report advocates changes that align with the agenda being pushed by the Modernizing Foreign Assistance Network, a diverse coalition committed to more effective foreign assistance:
Modern legislation: Rewrite the Foreign Assistance Act of 1961, an outdated piece of legislation that contains a proliferation of overlapping and sometimes contradictory statutes. The process of rewriting the FAA would provide a unique opportunity to develop a strategic compact – the so-called “Grand Bargain” – between the Congress and the administration that would give assistance efforts a more stable footing over the longer term.
Efficiency and coordination: In addition to outdated legislation, the report notes that as many as 27 U.S. government agencies are involved in foreign assistance programming. To strengthen measurement and evaluation and policy coherence, USAID should have a more pivotal role in interagency development policy coordination.
21st-century development agency: Consistent with the policy of the administration to make USAID a world-class development agency, the report calls for further strengthening the agency by rebuilding its staffing levels and training, expanding opportunities for local staff, strengthening USAID’s role in the budget process, and improving its engagement with civil society and the private sector.
Development distinctiveness: The report encourages U.S. policymakers to consider the unique nature of development in makingpolicy. Accountability should not focus so heavily on immediate results and outputs, as it does now, because development is a long-term enterprise and innovation is stifled in the current formulation. The creation of a long-term development strategy, as promised but not delivered by the Obama administration, would go a long way in addressing these issues.
Humanitarian assistance – bureaucracy, budgeting and transparency: While recognizing the value of the new Humanitarian Policy Working Group, the report points out that the complicated bureaucratic structures and lack of a cross-government policy hinder the U.S. ability in responding to humanitarian needs in a coherent and consistent way. Predictability on funding for humanitarian assistance, a key concern for developing countries trying to put assistance to good use, is complicated by the dependence on funding via supplemental appropriations. The absence of transparency in decision making leads to the impression that policies are driven by political considerations, instead of strategic interests and local priorities.
Fragile states: The report notes the stark contrast in the dual policies of assisting countries that are good performers and engaging more heavily in fragile and post-conflict states, and the concomitant need for the U.S. to create a development strategy that addresses the risks of each.
The DAC is to be commended for writing an informative report that offers constructive and concrete recommendations for advancing foreign assistance reform. The question is whether the Obama administration and the Congress will take the recommendations to heart and work together to finish the job.