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The reorganization of US foreign assistance announced today by Secretary Rice has some strong points, but it falls far short of what is needed and could create some new problems.
There is little question that a reorganization of US foreign assistance programs is badly needed. At least 18 federal agencies provide some kind of foreign assistance, and the pattern of proliferation was extended when the Bush administration added the Millennium Challenge Account and the Office of the Global AIDS Coordinator to the mix.

But pulling these programs under stronger control of the State Department raises some concerns that political expediency rather than long-term development goals will determine funding. It was striking that Secretary Rice did not mention poverty reduction at all in her speech in discussing the goals of US foreign assistance. There is now a greater chance that funds will be regularly pulled away from long term development programs in countries under the political radar screen in favor of countries that are important to meet short term political objectives. Countries that are most important to us politically change regularly. Currently Iraq, Afghanistan, Jordan, and Pakistan are high on our list, but for many years Israel and Egypt were the top priority. Just ten years ago the former states of the Soviet Union were of critical importance, and a few years before that it was our allies in the Cold War. There is nothing wrong with the Unites States providing substantial assistance to those countries – we absolutely should in pursuit of important foreign policy goals. But with a larger share of aid programs now under strong control of the State Department, there is a danger that more funding will be allocated in this way to the detriment of countries that are focusing on the long hard struggle for economic development--a goal that is itself very much in keeping with U.S. interests.
The new strategy misses the opportunity for deeper, more fundamental change. First, many of the weaknesses in US foreign assistance have their roots in onerous legislation with too many earmarks, too much “tied” aid, and too many unclear objectives and directives. This legislation was originally written by the Kennedy administration in the midst of the Cold War, and is not suitable for today’s goals and objectives. Without bringing Congress into the loop and pushing to re-write the Foreign Assistance Act, the Administration has missed a key piece of the puzzle.
Second, while reorganization is necessary, this plan only goes part way, and leaves many other US departments providing assistance. This was a missed opportunity to bring all foreign assistance programs under one roof, as the UK did a few years ago when it created DFID. Creating a new Department with clear responsibility for US aid programs would have helped rationalize the programs and make them much more effective in pursuing our goals. Thus even with this change many of our programs will be fragmented and poorly coordinated.
For more discussion see:
U.S. Foreign Assistance After September 11th: Testimony for the House Committee on International Relations
Bush and Foreign Aid
Reforming U.S. Development Policy
Reforming Development Assistance: Lessons from the UK Experience