Total U.S. development assistance has fallen 22 percent since 2005 from $27.9 billion to $21.8 billion in 2007. In real terms, this was the smallest amount since 2002, excluding assistance to Iraq, Afghanistan, and HIV/AIDS programs. Senior fellow Steve Radelet and his coauthors examine the decline, and ask whether President Bush's pledge to double assistance to Africa is likely to be realized or not.
With the U.S. Millennium Challenge Corp. (MCC) soon to release the scorecards and performance data that form the basis of the FY09 country selection round, Sheila Herrling and Amy Crone examine how countries fare on the control of corruption indicator, the only “hard hurdle” that countries must pass to qualify for MCC money, in this new MCA Monitor Analysis.
Meeting today’s foreign policy challenges requires a new vision of American global leadership based on the strength of our core values, ideas, and ingenuity. It calls for an integrated foreign policy that promotes our ideals, enhances our security, helps create economic and political opportunities for people around the world, and restores America’s image abroad. We cannot rely exclusively or even primarily on defense and security to meet these goals. CGD senior policy analyst Sheila Herrling and senior fellow Steve Radelet argue instead that we must make greater use of all the tools of statecraft, including diplomacy, trade, investment, intelligence, and a strong and effective foreign assistance strategy.
The White House and the World: A Global Development Agenda for the Next U.S. President shows how modest changes in U.S. policies could greatly improve the lives of poor people in developing countries, thus fostering greater stability, security, and prosperity globally and at home. Center for Global Development experts offer fresh perspectives and practical advice on trade policy, migration, foreign aid, climate change and more. In an introductory essay, CGD President Nancy Birdsall explains why and how the next U.S. president must lead in the creation of a better, safer world.
In September 2008 official aid donors and recipients will meet in Accra, Ghana, to discuss how to make development assistance more effective. CGD president Nancy Birdsall and co-author Kate Vyborny suggest that advocates of better aid who really want a win at Accra forget haggling over broad conceptual issues and focus instead on getting a public commitment from donors to one or more very concrete steps to improve aid effectiveness and to hold donors accountable.
Donors spend billions of dollars to fight HIV/AIDS in developing countries, but poor integration between donors and host country health systems risks undermining international efforts to prevent and treat AIDS. In this analysis, CGD’s HIV/AIDS Monitor argues that donors need to pay more attention to their overall effect on health systems, finding that the big international donors often create duplicate AIDS-specific systems that competitively draw on the health resources of developing countries. The report recommends taking specific steps to more broadly improve health information systems, improve supply chain systems, and strengthen the health workforce.
In Reinventing Foreign Aid, CGD non-resident fellow William Easterly has gathered top scholars in the field to discuss how to improve foreign aid. These authors, Easterly points out, are not claiming that their ideas will (to invoke a current slogan) Make Poverty History. Rather, they take on specific problems and propose some hard-headed solutions.
Measuring Progress with Tests of Learning: Pros and Cons for "Cash on Delivery Aid" in Education - Working Paper 147
Improving education has been a central goal of international development for decades, and the best indicators of improvement measure student performance. But can such measurements be used as incentives to stimulate more rapid improvement in education? There are no simple answers to this question since test-based measures pose a myriad of technical challenges. In this CGD Working Paper, visiting fellow Marlaine Lockheed reviews some of these challenges and the effects they could have on measuring the success of “progress-based aid” programs. She suggests four ways to successfully incorporate measures of learning outcomes into programs for progress-based aid.
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 the global war on terror, the establishment of an entirely new aid agency—the Millennium Challenge Corporation (MCC), and the use of large amounts of aid to address a single problem, as with the President’s Emergency Plan for AIDS Relief (PEPFAR).
CGD senior fellow Vijaya Ramachandran argues in this essay that the next U.S. president can play a valuable role in helping Africa to overcome two crucial barriers to poverty reduction: lack of power and lack of roads. Ramachandran urges the next president to create a $1 billion Clean Energy Fund for Africa to facilitate the transfer of U.S. infrastructure technology, including renewable energy; and to encourage the World Bank and the African Development Bank to focus on cross-country regional infrastructure projects, also with a strong emphasis on clean technology. The essay is included in a forthcoming CGD volume: The White House and the World: A Global Development Agenda for the Next U.S. President.
Rep. Howard Berman (D-CA), the new chairman of the House Foreign Affairs Committee, has vowed a major overhaul of U.S. foreign assistance. He joins a growing list of members of Congress and the defense, diplomacy and development community who recognize that U.S. foreign assistance programs are badly in need of modernization to meet the challenges of the 21st century. In this new essay, adapted from a forthcoming CGD book The White House and the World: A Global Development Agenda for the Next U.S. President, CGD senior fellow Steve Radelet offers a blueprint to align U.S. foreign assistance with American values and foreign policy goals: develop a National Foreign Assistance Strategy; create a new cabinet-level department for development policy; rewrite the 1961 Foreign Assistance Act; place a higher priority on multilateral assistance channels; and increase the quantity and improve the allocation of funding.
Read the Essay
With President Bush's trip to Africa making headlines this week, CGD senior fellow Steve Radelet and research assistant Sami Bazzi offer a close look at the latest U.S. foreign assistance numbers. Bottom line: although America's aid has more than doubled since 2000, the new money went mostly to Iraq, Afghanistan and a small number of debt relief operations; and almost all was allocated through bilateral rather than multilateral channels. Assistance to Africa more than quadrupled from $1.5 billion in 1996 to $6.6 billion in 2006 and has been enormously important in funding humanitarian relief and HIV/AIDS programs. But even with the increases, U.S. assistance to Africa still averages less than $9 per African per year. And U.S. assistance for Africa has become less selective: since 2000 the shares going to the poorest countries and to the best-governed countries have fallen.
The U.S. Foreign Corrupt Practices Act is supposed to prevent U.S. corporations from giving bribes while conducting business abroad--bribes that encourage corruption in poor countries and stymie development. But some corporations use gaping loopholes in the law and its international counterpart, the OECD Convention on Combating Bribery, to win contracts and enjoy special advantages without fear of prosecution. Combating Corrupt Payments in Foreign Investment Concessions: Closing the Loopholes, Extending the Tools, a new report by CGD non-resident fellow Theodore Moran, describes the nature of these corrupt relationships and the harm they cause. It also offers suggestions on how to prevent them, including re-drafting the U.S. law and the OECD convention, tightening enforcement, and extending the Extractive Industries Transparency Initiative to other sectors and industries.
Through the Looking-Glass, and What OLS Found There: On Growth, Foreign Aid, and Reverse Causality - Working Paper 137
The econometric quest for evidence on aid effectiveness continues. Practitioners in the $80 billion-a-year aid enterprise care about their work and hanker for objective evidence that they are helping. In this working paper, CGD research fellow David Roodman argues that there is a clear aid-growth relationship, but instead of being positive and running causally from aid to growth, it is negative and runs from growth to aid--aid, that is, as it is usually measured: as a fraction of GDP. Roughly speaking (and not surprisingly!), when GDP goes up, aid/GDP goes down. Roodman argues that choices that economists commonly make in running the numbers often flip the apparent sign and direction of the aid-growth link, making it appear that aid is raising growth.