Ideas to Action:

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U.S. Foreign Assistance for the 21st Century: Q&A with Steve Radelet

December 8, 2008

CGD senior fellow Steve RadeletCGD senior fellow Steve Radelet, co-chair of the Modernizing Foreign Assistance Network, shares a surprising new analysis of U.S. aid spending (it has fallen sharply in the past two years!) and explains how the next administration can bolster America’s security and reputation through better investments in reducing global poverty, fighting disease, and creating economic opportunity around the globe.

Q: What should President-elect Obama and his transition team be thinking about as they look for smart ways to strengthen U.S. global development as a pillar of U.S. foreign policy?

A: First, I think it’s important to acknowledge that President-elect Obama said more about global development in his campaign than any other incoming president. His “Common Security, Common Humanity” strategy sets out a bold agenda to bolster America’s security and reputation and show our nation’s values through investments in alleviating global poverty, fighting disease, and creating economic opportunity around the globe. At the same time, Obama has recognized that Americans want smart and effective government programs that work.

U.S. foreign assistance has had some great successes, including supporting the Green Revolution in agriculture, helping to eradicate small pox, supporting HIV/AIDS prevention and treatment programs, getting more girls into school, and building infrastructure to attract foreign private investment and spur local business. But our overall efforts are not as effective as they should be. They suffer from lack of coordination across more than 20 different agencies that provide assistance, from burdensome restrictions in outdated legislation that severely restrict our ability to respond effectively on the ground, and from a lack of an overall guiding strategy. And while funding for foreign assistance has grown over the last decade, it declined sharply during the last two years, as some of my colleagues and I describe in a new CGD Note “What’s Behind the Recent Declines in U.S. Foreign Assistance?

President-elect Obama, his team, and key leaders in Congress have the opportunity to make every dollar we spend on development programs much more effective, especially since there is bipartisan consensus on the need to move forward. The Democratic Party platform recognizes this imperative: “We will modernize our foreign assistance policies, tools, and operations in an elevated, empowered, consolidated, and streamlined U.S. development agency. Development and diplomacy will be reinforced as key pillars of U.S. foreign policy, and our civilian agencies will be staffed, resourced, and equipped to address effectively new global challenges.” The Republican Party platform makes a strong call for “a review and improvement of the Foreign Assistance Act of 1961 oriented toward: alignment of foreign assistance policies, operations, budgets and statutory authorities; development of a consensus on what needs to be done to strengthen the non-military tools to further out national security goals; greater attention to core development programs…and great accountability by recipient countries.” So there is enormous agreement in both political parties about what needs to be done.

The Modernizing Foreign Assistance Network, which I co-chair, has recommended a four-part approach to address these challenges and strengthen our assistance programs:

  • Develop a National Strategy for Global Development;
  • Reach a “Grand Bargain” between the Executive branch and Congress on management authorities; and plan, design, and enact a new Foreign Assistance Act;
  • Streamline organizational structures and improve capacity, preferably by creating over the long run a Cabinet-level Department for Global Development, or possibly a strong non-Cabinet professional development agency; and
  • Increase funding for and accountability of foreign assistance.

These steps will go a long way towards creating the development capacity necessary for the United States to effectively face 21st-century challenges.

Q: What initial actions can be taken during the transition period and in the early days of the new administration to begin this process? Are you calling for the Millennium Challenge Corporation (MCC) and the President’s Emergency Plan for AIDS Relief (PEPFAR) to be folded into USAID?

A: MFAN recommends that the president-elect and his team take two key early steps. First, they should announce soon a strong, experienced, high profile nominee for USAID Administrator, simultaneously name that person as interim head of the MCC and PEPFAR, and make him or her a key part of the National Security team. This step would begin to provide much-needed coordination and coherence across our assistance programs, and would elevate development to a new level in our foreign policy dialogue. It would also create a package of responsibilities that would attract a strong, very high-profile leader that has the vision and leadership skills needed to drive the modernization effort forward over the next few years. At the same time, with one very senior leader named to provide vision and head the overall effort, three strong professionals should be named to run USAID, the MCC, and PEPFAR on a day-to-day basis, much as we have now. We do not recommend eliminating either the Office of the Global AIDS Coordinator (OGAC) or MCC structure, eliminating the OGAC coordinator or MCC CEO positions, or folding these activities into USAID as it is now constituted. OGAC and the MCC should be maintained as strong and separate programs with special characteristics, just as they ultimately would be under the aegis of a strong development agency in the future.

Second, we recommend that the incoming administration name a “Deputy National Security Advisor for Development” with joint NEC/NSC responsibility for interagency and White House coordination and coherence of development policy. This person’s responsibilities would include coordination across programs and policies regarding democracy, humanitarian assistance, and crisis and conflict response, and ensuring consistency with U.S. trade policy. This position would be supported by several senior director positions at the NSC/NEC. Two key actions would be coordinated by the directorate with the new development nominee: developing a National Strategy for Global Development (in tandem with the new National Security Strategy), and initiating a review of all foreign assistance and international crisis management authorities, including those in DoD, to determine which authorities are most appropriately civilian and which are most appropriately military.

There is no silver bullet here; no one recommendation will be enough to bring our foreign assistance up to date and make it as effective as it can be. And we know it is not possible to have a new development strategy, new legislation, and consolidation (hopefully into a new cabinet agency) on the first day, so these recommendations represent the first key actions along the road toward meaningful reform. Without the initial step to put one person in charge of our three largest development programs, we risk continuing the diffuse leadership and uncoordinated efforts that will undermine the prospects for serious modernization of U.S. development programs to effectively combat poverty, fight disease and hunger, and widen the circle of development and prosperity.

Q: Why should the United States care about foreign assistance and global development in the midst of the financial crisis?

A: The financial crisis makes it imperative that we focus on rebuilding the U.S. economy, and it clearly will put significant strains on an already overburdened budget. But at the same time, it shows us yet again that U.S. and global prosperity rise and fall together; the same is true for domestic and global security. The very issues that we want our global development programs to address—including poverty, hunger, and economic stagnation—are being exacerbated by the current turmoil.

Unfortunately, America’s image in the world has deteriorated sharply in recent years, undermining both our standing as a global leader and our ability to create a better, safer world. The financial crisis has exacerbated this situation. Understandably, many Americans will be tempted to turn inward to try to protect their own interests. Yet the reality is that, now more than ever, the prosperity and security of Americans is integrally linked with the prosperity and security of the rest of world.

While we work to fix the economy at home, people around the world will be looking for the United States to restore its international leadership to help limit the economic and political consequences of the crisis. Our success or failure in restoring U.S. and global economic stability to create jobs, increase trade and private investment, and prevent the emergence of rogue nations and groups that foster insecurity and fear will depend in large part on our ability to strengthen all of our tools of global engagement, including building a more robust diplomatic corps and much more effective development programs to complement our defense and security programs.

For our long-term security and prosperity, one of the worst things we could do is to draw back from our efforts to engage with the world and support people in developing countries. President-elect Obama and his team clearly understand that, and have the strong support of leading members of Congress such as Howard Berman, Nita Lowey, Betty McCollum, Christopher Dodd, Richard Lugar, and Robert Menendez. The economic crisis is both a mandate and an opportunity to fundamentally reform our national security and foreign policy so that every investment we make abroad is strategic and cost-effective. So why should we care about strengthening our engagement with developing countries right now? In short, we can’t afford not to.

Q: Isn’t all this talk about modernizing foreign assistance an inside-the-beltway conversation? Does anyone outside Washington care?

A: Survey after survey shows that Americans are supportive of development assistance, but they want to be sure that our money is being spent effectively to help those who need it. Particularly with the deep concerns over the direction of our foreign policy in recent years, people across the country want the United States to engage in smart new ways with the rest of the world. The ONE campaign was ubiquitous during the presidential primaries and debates. Organizations like Bread for the World, Oxfam, and Save the Children have networks of millions of Americans that are actively engaged in the issues and talking to their members of Congress. Recent polling suggests that a strong majority—76 percent—of those questioned support modernizing foreign assistance. They want to see results and believe that reforming foreign assistance will help ensure that our programs are helping promote prosperity and security globally and at home.

Q: Some argue that while we need to modernize our foreign assistance programs, we can do a lot without new legislation. Do we really need to rewrite the Foreign Assistance Act?

A: If we are serious about real reform, the answer is yes—as much for the process of executive branch and congressional collaboration as for the substance that emerges. It is true that we can, and should, take several steps to strengthen our programs that do not require new legislation. These include rebuilding the professional capacity of our development organizations, streamlining procurement procedures, building a more effective monitoring and evaluation capacity, and reversing presidential directives that in their totality undermine program effectiveness, among others.

But at the core of many of the problems we face are the burdensome requirements that have been built up over the years as part of the Foreign Assistance Act of 1961. The dialogue with Congress on these issues is so broken that the act has not been re-authorized for more than 20 years. We need to rebuild the trust between the executive and legislative branches and reach a “Grand Bargain” on management authorities, responsibilities, and operational modalities. This step is crucial for supporting our personnel in the field so that they can be responsive to the highest needs in particular countries and make sure every dollar we spend is done so effectively.

It is important to recognize that legislation alone is not the answer—rewriting the Foreign Assistance Act must be seen as part of a complete package that includes developing a new strategy for global development, consolidating programs into a new, strong development agency, and increasing funding and improving the allocation of funding over time.

Q: What else needs to be done to finally bring U.S. foreign assistance into the 21st century?

A: One of the most important steps towards realizing this goal will be for President-elect Obama, his foreign policy team, supportive members of Congress, and our community of development professionals to keep making the public case that U.S. global development efforts are critical for our national security and long-term prosperity. We have to emphasize that foreign assistance modernization is inextricably tied to the creation of a new foreign policy approach for the United States and will bring more strategic depth, efficiency, and accountability to our global development efforts. This is particularly important because the financial crisis, geopolitical instability, and emerging demographic pressures will cross paths in more unpredictable ways over time. We can’t afford not to prepare to address these challenges now.

It will take leadership and cooperation to complete foreign assistance modernization, which I believe the Obama Administration will see as a way to realize its own political and foreign policy goals. In the short term, changing the way the system works will make government work better and be more cost-effective. More importantly, it will create a structure that will be up to the task of handling President-elect Obama’s proposed increases in foreign assistance strategically and efficiently, and ultimately ensure that U.S. development programs meet our foreign policy goals for creating better, safer world.