Bipartisan or Bust: Reform Principles for the Next Generation of US Foreign Assistance

Despite the tumult of the past year and a half, foreign assistance remains a necessary component of the US foreign policy and national security toolkit. Whether the aim is to advance humanitarian values, protect Americans from pandemics—including the current Ebola outbreak—or to secure the critical minerals that drive the US tech sector, cooperation with low- and middle-income countries will remain central to achieving these aims. The question is not whether the US engages, but how much and how well it does so.

That is where we have an opportunity. Reflecting on critiques of past US aid—including those leveled by actors on both sides of the aisle—here are six core reform principles that should underpin a more effective approach to US international assistance. While many of these principles echo past US and global reform initiatives, the current moment of disruption offers new opportunities for a step change in approach. Getting this right could not only deliver greater impact but also build a stronger political and public case for robust investment.

1. Selective and simple

Prior to its dismantling, USAID provided support to around 130 countries in a range of sectors, though health and humanitarian aid regularly topped the list. While small sums of money can be catalytic under the right circumstances, rather than reflecting a deliberate strategy of high-impact investments, USAID’s lack of prioritization was indicative of the agency’s inability to fend off a barrage of competing demands—including those from Capitol Hill, the White House, Foggy Bottom, embassies around the globe, partner countries, and aid advocates.

This constellation of perspectives undermined prospects for a more targeted investment strategy, even when the agency faced constrained resources. As evidence, look no further than the vast array of spending directives found in annual appropriations measures and documented attempts over the years to shutter USAID missions. Efforts to narrow the aperture—whether from inside or outside government—generated criticism from those whose favored places and issues were at risk of being sidelined. It’s telling that among the major aid innovations put forward in the early aughts was the Millennium Challenge Corporation, which promised a selective approach—one that limits partners to good performers with low incomes—and uses analytical tools to guide its investment decisions.

CGD’s president, Rachel Glennerster, and Siddh Haria have argued that donors should embrace radical simplification—a far narrower approach guided chiefly by evidence (though, importantly, leaving some room for innovation).

Even shy of ruthless prioritization, there’s a logic to adopting a narrower scope than the one that prevailed over the last few decades of US foreign aid. A more selective and simple approach to grant-based assistance would mean investing in fewer sectors, interventions, and countries. That requires identifying priorities, informed by factors such as need, US comparative advantage, partner performance, and an understanding of what works. Outside of humanitarian response, where there can be compelling reasons to offer support in a range of settings amid conflict or in the wake of a disaster, delineating a more limited footprint for grant-based US assistance could offer several benefits. While it would require making tough trade-offs, it could enable more targeted and realistic goals, accounting for existing evidence and the context in which it might be applicable. And with a narrower scope, the perennial challenges of measuring and communicating impact ease slightly.

In anticipation of more limited resources, there’s a clear case for channeling the lion’s share of grant-based assistance to critical needs in lower-income countries, and exploring opportunities for other forms of engagement, including reviving concessional bilateral sovereign lending to ensure scope for investments that advance development objectives along with foreign policy and strategic goals in select middle-income countries. The key will be to identify clear objectives, assess the right instruments to deploy for a given context, and measure and track against those predefined aims—all while working with bipartisan champions to make the case that selective and simple is a more stable path to impact and durable rebuilding.

2. Time-bound

A critique of US international assistance prior to 2025 was that aid felt endless. Even as a host of indicators broadly trended in the right direction, there remained scores of development challenges ripe for intervention—not to mention humanitarian appeals in desperate need of resources. Progress was celebrated, but calls to do more came in the same breath. Given how many lives can be saved with a relatively modest investment, there are strong arguments for continued aid spending overall, but identifying clear goals and timelines for projects and portfolios would improve implementation and bolster political support.

USAID awards—whether cooperative agreements, grants, or contracts—generally ranged from three to five years. But very often those awards were re-upped, rescoped, or rebid, giving the impression of a perpetual flow of funding. Some of this relates directly to the issue above—by working in so many places on so many issues, it was difficult to communicate effectively, whether to a general audience or even to lawmakers somewhat favorably disposed to providing support abroad. Again, among the key innovations of MCC was its compact model, which boasted a five-year clock. Ultimately, an approach more grounded in explicit timelines will need to look well beyond individual awards to consider overarching strategic engagement in a country, sectoral development objectives, and the contexts in which aid provides life-saving support and requires a more conscientious calculus.

Efforts such as USAID’s journey to self-reliance, initiated under the first Trump administration, to use data to underpin more frank conversations about transitioning countries away from grant-based assistance, but the initiative remained sufficiently detached from the appropriations process to do little to rein in the scope. Amid today’s more contentious debates over foreign aid resources, congressional spending directives are more likely to compound than disappear. In the absence of greater trust between Capitol Hill and the executive branch, these issues are certain to persist.

Since strict aid graduation terms can be difficult to establish and even harder to enforce, other avenues of engagement may help undergird political support. One step is to expand the US development toolkit to offer more alternatives to traditional grant-based support—for instance, concessional loans and sovereign loan guarantees to select partner countries. From there, the US should develop a framework that uses data to inform topline decisions about the appropriate mix of resources (for example, across grants, loans, export credits, and insurance products) and how that mix should shift over time and income levels. Such a framework would provide a constructive starting point while leaving room for judgment, depending on the sectoral objectives in a country and political and strategic considerations. In addition, specific programs should include benchmarks for increasing partner-country contributions over time, alongside direct investment in a country’s technical and fiscal capacity to fund and manage the programs.

3. Innovative and agile

Arguably, one of the largest shortcomings of US international assistance has been its inability to move quickly, adapt, iterate, try new things, and help drive innovation. Infamously complex procurement rules left limited room to maneuver. Implementing partners scoped interventions tied to logic frameworks, locking in the direction of travel.

The sluggish annual budget and appropriations process also contributed to the system's lack of agility and innovation. Often, the fiscal year is already well underway when lawmakers reach an agreement on a final spending bill, at which point there’s a multi-step allocation process, including a consultation mandated by Congress, that can delay the flow of funds. As a result, money moving through the programming pipeline may be responding to challenges of months and even years prior. In places where circumstances are evolving quickly, there’s a risk that resourcing decisions were based on a context that no longer exists. The system would benefit from greater flexibility paired with data to inform allocations and program design.

Even absent significant changes to these processes, procurement reforms could create meaningful room to increase impact. One goal should be to shift contracting away from tracking inputs and toward financing outcomes—paying for results and evidence of development progress rather than adherence to a predetermined work plan. New procurement flexibilities should be paired with guidance on when paying for outcomes makes sense to align incentives and improve cost-effectiveness, drawing on the experience of institutions such as the World Bank.

Another opportunity is to bring back USAID's tiered evidence fund, Development Innovation Ventures (DIV). For nearly 15 years and with bipartisan support, DIV used an open, tiered model—small awards to pilot ideas, larger ones to test them rigorously, and the largest to scale what worked—to build a portfolio that an evaluation found delivered a 17-to-1 social return. Importantly, DIV paired innovation with evaluation: DIV funded more than 150 randomized controlled trials, generating evidence that fed back into investment decisions. After USAID's dismantling, philanthropy stepped in to relaunch DIV as an independent organization, the DIV Fund. Any future US government innovation effort should rebuild DIV, seek to mainstream and scale its successes through partner countries, private, and multilateral channels, and also consider DIV as a template for creating similar mechanisms built around piloting, rigorous testing, and scaling what works.

Finally, the aid system has also long been short on the "big bets" needed to carry proven innovations to market and, where appropriate, to support their adoption at scale (think: Operation Warp Speed), including by partner governments and private firms. Some of these opportunities are simply too large for an aid budget and are better advanced through other parts of government, whether BARDA, ARPA-E, or DFC, particularly through pull-financing mechanisms and other partnerships that align incentives to drive innovation. The US benefits from an unmatched combination of scientific capacity, deep capital markets, and convening power. That comparative advantage could be far better leveraged.

4. Collaborative and country-led

Even in its most ambitious moments, the US could never achieve any development objective alone, not least because it is supporting countries with their own economic and development aspirations. Too often, the US bypassed partner-country governments and systems. While this makes sense for some programs (for example, strengthening civil society), the reasons were often about risk aversion rather than deliberate design. The instinct to avoid weak systems is understandable, but it undercuts a country's capacity and disincentivizes it to bring projects onto its own budget. Despite serious challenges with the current bilateral global health agreements, including unreasonably compressed timelines, the concept of countries increasing domestic revenue over time to cover basic services is an important one.

In addition to working with countries differently, the US should be more deliberate in choosing between multilateral and bilateral channels. Multilateral institutions offer reach, burden-sharing, and a natural home for transnational challenges—pandemic preparedness, climate resilience, and conflict and fragility, even as many of those institutions are in need of reform. Bilateral channels offer greater ability to direct resources, more visibility, and a tighter link to strategic priorities. While some consideration is currently given to multilateral versus bilateral mechanisms, the US has never conducted a robust multilateral assistance review to assess its strategy and the effectiveness of its relative investments. Given reduced budgets, it would be prudent to ensure a better match of the channel to the objective: leaning on multilateral platforms where coordination, scale, and long time horizons matter most, and reserving bilateral engagement for places where direct relationships, including for foreign policy reasons, and US comparative advantage are important. In addition, the US should continue to use its voice within the respective governing bodies to shape multilateral agendas and boost this complementarity.

Partnering well also extends beyond governments—to the private sector, philanthropy, diaspora communities, and fellow donors whose resources increasingly dwarf official aid. Finding a way forward with this full range of partners also requires humility: awareness that the US has been an unreliable partner in recent years, and, rather than relying on rhetorical commitments, seeking to align incentives in credible ways (such as well-designed, multiyear government-to-government agreements and fulfilling pledges and paying down arrears to multilateral development banks).

5. Transparent and accountable

Robust transparency and accountability processes are what allow taxpayers, lawmakers, and partner countries alike to see where money goes and what it buys. The US was a leader on aid transparency in the past, publishing detailed spending data and committing to international reporting standards. However, the disruptions of the last year have eroded basic visibility into what the US is funding and to what end. Rebuilding that visibility is a precondition for rebuilding trust, particularly with a Congress inclined to legislate in detail when it is uncertain about how funds are being used. Transparency should go beyond data on aid flows to include greater clarity on the objectives of the assistance. Greater clarity would also increase the credibility of engagement with partner countries, which should have more information about programs if they are to take responsibility for services over time. The same is true for other partners, including donor agencies and major philanthropies, who are directing limited resources to development and seeking to use them wisely and in coordination with US investments.

Accountability, in turn, has to mean more than compliance. The relevant question is not only whether funds were spent as directed, but whether, to the extent possible, programs were well designed, whether their impact was measured, and whether a range of appropriate evidence shaped what came next. That requires investing in data infrastructure and analytical capacity—including newer tools for measurement and verification that leverage AI—to track results on an ongoing basis. Further, it requires a communications function capable of translating those results to audiences in the US (beyond Capitol Hill) and partner countries. This could include investments in partner country capacity to design, track, and report effectively, a key benchmark toward reducing the need for foreign aid.

6. Bipartisan or bust

For all the criticism it has attracted lately, US foreign assistance has historically been a bright spot of bipartisanship. Its most durable innovations—PEPFAR, MCC, and DFC—were launched under Republican administrations and forged and sustained with support from both parties over several administrations. That basis was a key part of their success. The vast majority of aid programs operate on timelines measured in years and decades; they cannot deliver if their funding and direction lurch with every election.

Which is why the principles above are, in the end, as much about politics as about program design. A more selective, time-bound, coherent, innovative, collaborative, and transparent approach is also a more defensible one—easier to explain to the public and easier for lawmakers across the aisle to stand behind. Rebuilding a robust coalition of political support will also require rebuilding trust between Capitol Hill and the executive branch. Absent a bipartisan core, even the best-designed reforms may be undermined by a lack of the requisite political support. On foreign assistance, it really may be bipartisan or bust. That’s no small challenge. But as reflected in the recent supplemental budget request from the Trump administration to Congress to respond to the Ebola outbreak and mitigate the risks to Americans, the need for foreign assistance remains. The question is whether we can work across the aisle to build an effective and durable system to meet the challenges of today and tomorrow.

Conclusion

For decades, the US foreign aid architecture has been criticized for its fragmentation. Spanning a wide range of agencies, institutions, directives, and objectives, its complexity has long undercut its effectiveness.

While a degree of policy incoherence might be expected for a globally engaged, economic powerhouse like the US, the extent of fragmentation can exacerbate the situation. On occasion, development policy reform efforts have sought consolidation (as in the US International Development Finance Corporation), but more often they have added to the constellation of actors. Coordination attempts, too, have fallen short. The creation of the original “F Bureau” at the State Department was meant to provide greater coherence and transparency. In practice, it added another layer of process without resolving the underlying tension among competing mandates, and successive attempts at reorganization have struggled to do better. To be clear, the destruction of USAID—and dismantling of a few smaller agencies and institutions—hasn’t solved the problem or rationalized the organizational approach. The mass termination of foreign assistance awards and the loss of real development and humanitarian expertise have done and will do genuine harm, while also leaving a vacuum that demands to be filled thoughtfully. Though the opening for reform is real, the US government's capacity to program aid has been drastically reduced; that gap will not close on its own.

In narrowing the scope of assistance and establishing clear time-bound objectives, there may finally be an opening to achieve what decades of reorganization could not: a more coherent foreign assistance capability. While passing new authorizing legislation may be a bridge too far in the next few years, there is a new opportunity to create a clear lead for development goals, a focused portfolio, and a default mix of tools linked to the income level of the partner country. The harder task is not redrawing roles and responsibilities, but in a time of massive geopolitical and technological flux, deciding what the US is trying to accomplish so that the available tools can be pointed in the same direction.