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Pick Your Side: A Spirited Debate on U.S. Aid Policy

March 20, 2006

State Department and USAID

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Moderator: Steve Radelet
Carol Lancaster
Andrew Natsios
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Two former USAID officials mounted a spirited debate over the Bush administration’s planned changes to U.S. development policy at a CGD forum on March 17. The proposed reorganization calls for the creation of a “dual-hatted" USAID Administrator who will also become the new Director of Development in the Department of State. Supporters see the move as rationalizing and upgrading development aid in US foreign policy, while critics argue the changes amount to a take-over of development policy by the Department of State, risking the loss of USAID's development mission to short-term foreign policy goals.

Carol Lancaster, a former USAID deputy administrator who is a professor at Georgetown University and a visiting fellow at the CGD, began by calling the proposed reorganization a “terrible idea.” Lancaster argued that bringing USAID under greater State Department control, and appointing a Director of Development with offices both in USAID and State, would undercut both the volume and efficacy of US development assistance. She declared that the administration was, in effect, mounting a “stealth” strategy to achieve a longstanding goal of folding USAID into the State Department.

Andrew Natsios, former USAID administrator who is also now a professor at Georgetown University, rejected the idea that the Bush administration had a stealth strategy to merge USAID with the State Department, noting that efforts to integrate the two dated back to the Clinton administration. Natsios highlighted President Bush support for development assistance, pointing out that Official Development Assistance, or ODA, has increased from $10 billion to more than $27 billion during the Bush years, a faster increase than at any time in four decades.

Asked to name the three biggest problems with current aid policy, Lancaster responded that the need for better organization, the lack of attention to poverty not caused by state weakness, and the failure to evaluate the impact of aid interventions were the most pressing issues. For his part, Natsios felt that misalignment of resources, Congressional budget earmarks, and the lack of a quadrennial review of aid policy were the biggest barriers to success.

Both speakers agreed that the more rigorous evaluation was necessary. But they disagreed on the degree to which Congressional earmarking was responsible for the misalignment of resources in the aid community. Neither did they find common ground on the premise that the president’s designated Director of Development, Randall Tobias, might politicize development because of his position’s strong institutional tie to the State Department. Lancaster stated her fear of greater politicization of development aid, while Natsios argued that Tobias’ greater clout would give development policy a bigger boost within the administration.

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