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In this study, CGD visiting fellow Carol Lancaster analyzes the dramatic changes in U.S. foreign aid during the Bush administration, including the increased use of aid to address failed states and to fight HIV/AIDS and the global war on terror; changes in organization; the establishment of an entirely new aid agency—the Millennium Challenge Corporation (MCC); new approaches to delivering aid, including the MCC’s “performance-based aid”; and the use of large amounts of aid to address a single problem, as with the President’s Emergency Plan for AIDS Relief (PEPFAR).
Lancaster analyzes the origins of these shifts in aid, their promise, and their potential problems. She also analyzes major policy issues and organizational challenges that these changes raise. She concludes with recommendations on the purposes and organization of U.S. aid for the future.