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As the largest bilateral donor in the world, the US government can play a leadership role in pushing aid effectiveness principles and sustainable development practice. The past two administrations have interwoven, to varying degrees, a number of these principles into the reform agenda of USAID as well as new institutions and initiatives like the Millennium Challenge Corporation, PEPFAR, Feed the Future, and Power Africa.
CGD evaluates US efforts to implement these reforms and principles which include:
The principle of country ownership reflects the idea that local actors including governments, civil society, and the private sector should have a stronger leadership role in the formulation and implementation of development activities in their country. Country ownership is central to the approaches of MCC, Feed the Future, and Power Africa, while USAID and the State Department have increasingly focused attention on shifting a greater share of implementation leadership and responsibility to local actors.
Foreign Aid Transparency & Accountability
In recent years, there has been a major global push to increase the transparency and accountability of foreign assistance. The US government has the potential to be a global leader in aid transparency and accountability, but it has struggled to make progress on its international commitments.
Domestic Resource Mobilization
Domestic resource mobilization (DRM) broadly refers to the process of countries raising their own money to finance their development agenda. US government efforts to support DRM have focused on helping governments expand their tax bases, improve tax compliance, and increase the capacity of tax administrations. In addition to an emphasis on resource collection, current US efforts around DRM also emphasize the importance of the transparent and accountable expenditure of resources by governments.
Results or outcome-based aid has long been a key area of study for CGD. Compared to traditional models of US foreign assistance, these funding models shift attention from inputs to outcomes -- measuring and rewarding real progress, encouraging innovation and adaptation, aligning incentives, limiting corruption, and reducing waste of donor funds. Results-based aid approaches have shown promise in improving service delivery and country ownership.
The recent Ebola outbreak in Liberia underscored the need to focus on health systems strengthening and local resiliency. But who should take the lead? As the case of Liberia shows, even in a country still reeling from a health crisis and with perpetually low capacity, there are opportunities for donors to take a more ambitious approach to country ownership and institution strengthening.
Even among policymakers, there is plenty of misunderstanding around how the US government’s premier agency charged with advancing a private sector-based development agenda, the Overseas Private Investment Corporation (OPIC), actually operates. When we searched for a database with key OPIC project-level information, we couldn’t find one. So we spent months manually entering all of the publicly available information on OPIC projects into a single location, the OPIC Scraped Portfolio dataset.
For some time, we’ve been cheering MCC’s interest in pursuing approaches that pay for outcomes and encouraging the agency’s stakeholders to get onboard (here and here). Now we can applaud an important step forward. The agency’s new compact with Morocco, which both partners celebrated at an event last Thursday in Rabat, spells out the potential for a results-based financing component—a welcome development.
To what extent have aid agencies delivered on their commitments to transparency? How do these agencies’ transparency efforts compare to one another? And beyond mere publication, what else needs to be done to make sure that available data is put to good use?
“Transparency has the potential to transform the effectiveness of aid spending,” said UNDP Administrator Helen Clark at a recent CGD event co-hosted with Publish What You Fund to launch its 2016 Aid Transparency Index. For the second year running, UNDP comes out at the top of the index – and in this week's CGD Podcast, Publish What You Fund’s CEO Rupert Simons says that generally, we understand more clearly who gives what to whom and why.
I want to discuss country ownership in US development activities. Let’s take the case of El Salvador. As you may have heard, El Salvador has the highest homicide rate in the world right now. But what you may not know is that El Salvador is also home to the largest locally-led public-private partnership in USAID’s history.