Yohannes and Shah Head to the Hill: Duet or Competition?

MCC CEO Daniel Yohannes and USAID Administartor Rajiv Shah will testify together before the House Foreign Affairs Committee on Wednesday. This is the first time since MCC was created that the two agencies will testify together* and the first time since 2005 that MCC will appear before the full House authorizing committee. The hearing gives the two agencies an opportunity to present a united front on the Obama administration's new global development policy. But the expected shrinking FY2012 budget also means there is ample room for tough questions about where the next (or last) dollar should go, which programs are more effective and how, if at all, multiple agencies will be able to do more--and fulfill the president's vision--with less.It's a good signal from the House Foreign Affairs Committee that they are pulling together multiple U.S. development agencies into one hearing. (It would be fascinating, if impossibly unwieldy, to have the heads of all 21 U.S. federal agencies that work on development in one hearing. Of course, that would get way beyond this committee’s jurisdiction which is another problem.)Secretary of State Hillary Rodham Clinton and Treasury Secretary Timothy Geithner were the first to testify before authorizers and appropriators on the FY2012 development budget. Their hearings focused heavily on the Middle East, but also raised questions about how Congress should prioritize the various development initiatives. The Shah and Yohannes hearing should dig deeper into specific development issues but the shrinking budget and need to prioritize will remain. If I were Shah or Yohannes, I'd be prepared for (at least) three types of questions on the overall development approach:

1. USAID or MCC? It may be overly simplistic to suggest members of Congress would ask “USAID or MCC” but they can (and should) be asking where the next (or last) U.S. development dollar will get the biggest bang for the buck. The benefit of the Obama administration’s global development vision is that it unifies multiple agencies around core goals: economic growth, country ownership, selectivity, transparency, results and impact. As USAID embraces more robust country ownership, economic growth and food security, it starts looking a lot more MCC-like. And on the flip side, as MCC works in more lower middle income countries that less-obviously pass the indicators (read: Indonesia), it starts looking more like USAID. The two agencies need to talk about their common goals but be crystal clear about their different approaches, areas of expertise, and focus countries. They should emphasize what they do but also what they don’t do. In the absence of an overhaul of the Foreign Assistance Act of 1961 or other major organizational reform, it makes sense to have separate agencies with distinct missions, mandates and structures to turn taxpayer dollars into development impacts. In the long run though, U.S. policymakers should still be asking whether it would be more efficient to bring more (or all) U.S. development efforts under one roof.
2. Whither the interagency reform process? The Presidential Policy Directive on U.S. Global Development (or PPD) also asks all U.S. agencies with development programs to coordinate through an interagency process. In the absence of broader reform, the widely-praised policy directive takes a first step to make sense of U.S. development actors and programs (including U.S. trade, migration, investment and other policies that have a big impact on development). But in the shrinking budget environment, calls to coordinate--because it’s a good thing to do--become an unfunded mandate. It has to be hard for agencies to find the staff and time to engage in tough interagency conversations while budgets, programs and staff are being squeezed. Congress is responsible for holding agencies accountable to their core programs and mandates. But who is holding those agencies accountable for fulfilling the administration’s vision of a more streamlined and coordinated 21^st century development apparatus? Unless Congress embraces these principles too, the incentives for agencies (and some NGOs) to turn inward could outweigh prospects for collaborative reform. (Open for debate and bait for Todd Moss: is this a bad thing?)
3. How should Congress prioritize among U.S. development programs? Clinton and Geithner both fielded this question in their hearings. Not surprisingly, the answers fall along agency interest lines: Clinton prioritized the Global Health Initiative and Feed the Future; Geithner prioritized funding for the international financial institutions. It makes perfect sense for each agency to defend the programs most squarely under their domain. But Congress must decide between and among these programs and there is not, as of yet, a single answer from the administration on what comes first, what might have to give or how to decide. The presidential policy directive highlights a few priorities: global health, food security, climate change, work in fragile states, and enhanced multilateral engagement. It also calls for more selective and effective aid. MCC was created to be focused and selective while USAID is designed to cover a wider range of countries and programs. Does this matter when comparing MCC’s $1.125 billion FY2012 budget request to USAID’s? Surely it should be balanced with measures of effectiveness. MCC has impact evaluation built into most of its programs, USAID is undertaking a major effort to move in this direction, and the administration has launched a Dashboard to track funding (if not yet outcome) data. It is probably too soon for any of these to inform FY2012 budget decisions. In the meantime, efforts like the Quality of Official Development Assistance or QuODA assessment put some quantitative and qualitative measures on the effectiveness of development agencies but there are reasonable debates as to whether these are the best or only measures Congress should be taking into account. Figuring out who and how to decide which programs to prioritize (and which to eliminate) are much harder questions for Congress and the administration to answer. But someone will have to answer them to finalize the FY2012 budget.

Yohannes and Shah will get much more specific hearing questions on their agency’s programs. And they should be prepared to list some cuts each institution could reasonably make (USAID: close missions? Cut Europe, Eurasia and Central Asia assistance? MCC: Threshold? Delay Indonesia?). Throughout the hearing, Shah and Yohannes should present a unified front on the overall objectives of U.S. development assistance, but be crystal clear on the distinct roles and responsiblities each agency plays. I'm hoping that instead of two voices singing the same part or a competitive performance, Shah and Yohannes will sing a development duet.What would you ask Shah and Yohannes?*CORRECTION: I goofed! USAID and MCC testified together on May 13, 2004 before the House Appropriations Subcommittee on Foreign Operations and Related Committees. Check out the transcript and thanks to my readers for pointing it out to me!