Reforms amid Reductions? House Panel to Question USAID Administrator Mark Green on FY19 Budget

March 20, 2018

Tomorrow, USAID Administrator Mark Green heads to Capitol Hill to defend the Trump administration’s FY 2019 foreign assistance budget request. It won’t be easy. Lawmakers have pushed back hard against the drastic cuts to US global development and humanitarian spending proposed by the administration.

And while, under Green’s leadership, USAID has advanced several smart ideas to improve the agency’s effectiveness—including developing a framework for thinking about aid transition, piloting new ways to pay for results, and improving procurement processes—there remain significant questions about how these efforts will fare in the absence of sufficient resources and whether proposing such deep cuts provokes a level of skepticism that jeopardizes reform efforts.

Here are some specific issues I hope receive attention during tomorrow’s hearing:

USAID’s independence

At this time last year, the Trump administration was reportedly contemplating folding USAID into the State Department as part of an effort to “streamline” the federal government. The consensus reaction from the development community was that preserving USAID’s independence is paramount. For several months we’ve heard repeated assurances that consolidation is no longer on the table. But ongoing unease about the relationship between the State Department and USAID suggests the point remains relevant.

The rapport between the department and agency is liable to change with new leadership on the horizon for State. Even so, the hearing provides a useful opening for the many members who support USAID’s independence to go on record and give Green a chance to make the case for it.

“Journey to self-reliance” (or strategic transitions from aid)

Green’s vision for USAID’s development work is centered on a “journey to self-reliance”—supporting the development of countries’ capacity to finance and manage their own development so they can eventually transition away from aid. This vision isn’t new—previous administrators have espoused similar convictions. But Green’s proposal to develop a transparent and evidence-based approach to deciding if, when, and how to transition a relationship with a country from one based on grant-based economic assistance to one focused on trade support and other forms of development finance is more focused than many previous efforts and deserves recognition.

An idea, however, is only as good as its implementation, and there are a number of unanswered questions about how this concept will be put into practice. If the hearing delves into Green’s signature “journey to self-reliance,” I hope members ask, how would USAID seek to redefine its relationship with a country based on the new framework? How will proposed metrics be used to inform decisions about readiness for transition and/or the approach USAID should take in a particular country, and what makes them an appropriate tool for this purpose? What is the relationship between the “journey to self-reliance” framework and other strategy-setting processes?

And how does it feed into processes that seek to include local priorities and goals? Directives and initiatives from Washington already tend to dominate missions’ strategic decisions; how will USAID ensure its “journey to self-reliance” framework doesn’t become yet another Washington-based tool that limits the influence of country-determined priorities? 

Domestic resource mobilization

An administration-released factsheet on the FY19 budget request highlighted a new commitment to domestic resource mobilization (DRM)—$75 million for activities that help countries self-finance their own development. This is a welcome push that aligns well with USAID’s “journey to self-reliance” framework, as well as with the internationally endorsed Addis Tax Initiative, which asks donors to increase their support for DRM.

But even amid widespread support for DRM, there are real gaps in what we know about assistance in this area. To begin with, we don’t even have a good account of how much we’re currently spending on DRM, though this is improving. We also know relatively little about the effectiveness of various interventions, which largely fall into the camp of more-difficult-to-evaluate technical assistance. I hope, as part of the new initiative, that Green can articulate how the agency will define success in this area and assess the degree to which its investments achieve their intended outcomes.

Procurement reform

While it may not sound glamorous or exciting, getting procurement right is foundational to USAID’s effectiveness. Previous administrations have spearheaded some important shifts in how USAID makes awards, but more work remains to ensure award types are better aligned with USAID’s vision for how it wants to do business.

Though the procurement reform review is not yet complete, I’d like to hear Green’s initial thoughts on how the agency is planning to procure and design programs to better (1) build “self-reliance” by strengthening local capacity to design and implement programs, (2) ensure programs are either informed by evidence or identify opportunities to generate evidence, and (3) enable speedy and responsive programming outside of disaster response (where the agency already has the ability to act quickly).

Evidence and evaluation

The Trump administration makes a lot of references to the importance of evidence-based decision making. And USAID, with Green at the helm, has demonstrated this commitment in some noteworthy ways. Within the last year, for instance, the agency hosted a day-long event showcasing evidence and evaluation and announced participation in a new development impact bond (DIB), an innovative results-based financing scheme.

On the other hand, the administration’s proposed budget would strike a massive blow to USAID’s evidence and evaluation functions. The FY19 budget request contains a 40 percent cut (compared to FY17 levels) to the Bureau of Policy Planning and Learning—the headquarters of the agency’s learning, evaluation, and research efforts. And it would slash funding for the Global Development Lab (the Lab) by 80 percent.

Within the Lab, the evidence-focused components have been particularly shorted. Last year, USAID closed new applications for Development Innovation Ventures (DIV), the part of the Lab that rigorously tests new ideas for solutions to development problems and helps scale those that prove successful.

Green has talked a lot about improving the efficiency and effectiveness of USAID. The hearing provides an opportunity for him to highlight some of the innovative ways USAID is using evidence to pursue these objectives, but he should also be pressed on the risks that downsizing the agency’s evidence engines poses to the broader effectiveness agenda.

Fragile and conflict-affected contexts

At least a third of USAID’s assistance goes to fragile and conflict-affected states.* Fragile states are where poverty is increasingly concentrated, humanitarian relief is most needed, and US national security interests are often most pressing. Fragility, however, is extraordinarily complex, often confounding the most well-intentioned efforts by donors to promote stability and development. Recently introduced legislation (H.R. 5273), sponsored by a number of panel members, would require USAID—along with the State Department and Department of Defense (DOD)—to take a hard look at what works and what doesn’t in aid to fragile states, create a strategy for violence reduction in select countries, and better assess impact.

With over 15 years of experience providing assistance to fragile states, USAID should already have some thoughts on how to approach these questions. It would be great to get Green’s take on how USAID should adjust its procurement, program design, and implementation processes to respond quickly to emergent needs and adapt interventions in constantly evolving fragile environments.

Interagency coordination

One of the big threads in the recent US foreign assistance reform and redesign conversation has focused on how the fragmentation of aid across 20-plus agencies compromises its efficiency and effectiveness. Eliminating this fragmentation isn’t really on the table—it would be hugely complicated and require a complete rework of the distinct roles of various agencies. But it may be possible to ease the symptoms of fragmentation through improved coordination and collaboration.

This has been critical in the context of a cross-cutting initiative like Power Africa—and would likewise be necessary for doubling down on DRM. The new proposed US International Development Finance Corporation would need to coordinate closely with USAID. And the agency has highlighted the need for better coordination with DOD in its work in fragile states. For each of these needs, what can USAID do to improve coordination and collaboration? What does good coordination look like in practice?

*In FY16, 29 percent of USAID’s obligations went to the 20 most fragile states as ranked by the Fragile States Index


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.