The US Development Policy Initiative at the Center for Global Development launched the Foreign Assistance Agency Briefs for a simple reason. Foreign assistance is in the spotlight, slated for significant budget cuts during the Trump administration, yet it remains poorly understood. The series of five briefs contained here provide a snapshot of the primary US foreign assistance agencies. And while these agencies implement nearly 90 percent of US development and humanitarian assistance, there are twenty agencies in total that implement aid-related programs. Additionally, the United States has the Overseas Private Investment Corporation (OPIC), which does not manage foreign assistance funds but uses other tools to catalyze private investment in developing countries.
State Department guidance underscores the importance of its work in furthering development: “The surest path to creating more prosperous societies requires indigenous political will; responsive, effective, accountable, and transparent governance; and broad-based, inclusive economic growth. Without this enabling environment, sustained development progress often remains out of reach.”
Attention presidential transition teams: the Rethinking US Development Policy team at the Center for Global Development strongly urges you to include these three big ideas in your first year budget submission to Congress and pursue these three smart reforms during your first year.
Since its establishment more than 54 years ago, the United States Agency for International Development (USAID) has expanded into an $18-billion-a-year agency, operating in over 145 countries and in nearly every development sector. But USAID is often constrained in its ability to adapt to emerging development challenges due to differing political priorities among key stakeholders and resource constraints. This memo is the result of a roundtable discussion in July 2016 on how the next US administration, in close concert with Congress, can build upon and maximize the development impact of USAID.
US leadership in multilateral institutions such as the World Bank and regional development banks is flagging. These institutions, rated as some of the most effective development actors globally, provide clear advantages to the United States in terms of geostrategic interests, cost-effectiveness, and results on the ground. Restoring US leadership in institutions like the World Bank will mean giving a greater priority to MDB funding, which today accounts for less than 10 percent of the total US foreign assistance budget and less than 0.1 percent of the total federal budget. Prioritizing multilateral assistance in an era of flat or declining foreign assistance budgets will necessarily mean some reallocation from other pots of foreign assistance money, as well as an effort to address the structural impediments to considering reallocations.
This paper examines courses of action that could help the bank could adapt to shifting development priorities. It investigates how country eligibility standards might evolve and how the bank might start to break away from its traditional “loans to countries” model.