A Future for Development Assistance
Out of the rubble, an opportunity waits to be seized.
The current crisis presents us with an opportunity to create a new, stronger, and more effective USAID. Here are the improvements that should be baked into new legislation to build a better USAID:
1. Define development clearly. This is necessary to protect USAID from those who have never understood it. Some, for example, equate development assistance with grants of investment capital, or with humanitarian aid, or medicines to fight epidemics like HIV/AIDS and Ebola. Such other forms of assistance are important, but they are not development assistance: The favorable transformation of economic, political, and social institutions, where favorability is judged to the extent that the transformation results in greater numbers of people who are able to escape poverty and achieve prosperity.
2. Restrict USAID’s focus to development assistance alone. Move all other kinds of foreign aid to more appropriate agencies. Students of bureaucracies know this will make USAID more effective by allowing staff to concentrate their knowledge and skills. Move humanitarian assistance to FEMA. Move the fight against outbreaks of infectious diseases to the CDC. Move transactional assistance (the Economic Support Fund) to the State Department alone, involving no support by USAID for implementation.
3. Prevent the State Department and USAID from implementing their respective programs (transactional ESF and development) in the same country. The objectives of these two types of programs are fundamentally incompatible, and we’ve known that for a very long time. According to David Bell, USAID’s second administrator, talking in the 1960s about how foreign aid had been administered prior to the establishment of USAID, “There was a strong feeling among most of us in the new [Kennedy] Administration that aid decisions had been improperly subordinated in the previous arrangement to the views and judgments of the State Department’s Assistant Secretaries and office chiefs.” (Oral Interview, JFK Library, 1965 p. 107.) Congress later acknowledged this fundamental incompatibility by moving its authorization for transactional ESF out of the “development” section of the Foreign Assistance Act, and into the section of that act closely related to military aid.
4. Eliminate the Millennium Challenge Corporation. It is fundamentally a grantor of investment capital, not a development assistance agency. However, absorb the MCC’s strategy for creating compacts into USAID. Countries that have made progress in development can turn for concessionary investment capital with appropriate risk insurance to the various national and multilateral financial institutions (e.g. the world’s various development banks and the International Monetary Fund) that have been created for that purpose.
5. Require all food aid to be administered by the Department of Agriculture, not USAID. If food aid is to be delivered in a country where USAID has a development program, USAID must certify that the food aid is not inconsistent with that program, e.g. that there is a food-related crisis in the country. Food aid must never be confused with development assistance.
6. Through an Office of Development Coordination, empower USAID to look beyond a country’s national borders, even to look within the United States itself, to address impediments to development, recognizing that American special interests are often complicit in keeping an undeveloped country in poverty.
7. Through an Office of Public Education, give USAID an effective and independent voice, so that it can speak directly to the American people and to their representatives about the real problems of development, explicitly recognizing that development is complicated, frequently misunderstood, and often intentionally described in misleading ways to benefit special interests.
8. Reserve to Congress the authority to confirm its approval of a particular development program in each country, known as a “development compact”. This will hopefully prevent a White House administration from robbing a development program to pay for something else.
9. Fund development programs for five years, which is about how much time is required for development programs to show results. It would, for example, “permit the developing country to undertake the kind of difficult political measures, such as raising taxes or accomplishing a land reform program, which needed to be undertaken if development was to be achieved.” (David Bell, Oral Interview, JFK Library, 1965 p. 107.)
These fixes are all embodied within a proposed new Act for International Development of 2026. That draft legislation begins with the following justification:
(a) The security of the people of the United States is best sustained and enhanced within a community of countries that are able to meet the aspirations of their own peoples for a better life.
(b) In the poorest countries, domestic and international political, social, and economic institutions too often serve to prevent those who work hard from providing for their families and for their posterity.
(c) When hope for a better future is lost, extremist ideologies may gain a foothold, and the pressure for irregular migration mounts, posing a threat to the security of the United States.
(d) To forestall this threat, domestic and international political, social, and economic institutions must be developed so that they reward the poorest individuals for their hard work, affording hope for a better future.
If you find this draft legislation compelling, do propose it to your members of Congress.