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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 President’s budget submission was perfectly timed this year to coincide with Ground Hog Day. And just like Bill Murray, we lined up to argue yet again about whether the current president has demonstrated a true commitment to global security and poverty.
The Millennium Challenge Corporation (MCC), an independent US foreign assistance agency, was established with broad bipartisan support in January 2004. MCC
has a single objective—reducing poverty through economic growth—which allows it to pursue development objectives in a targeted way. There are
three key pillars that underpin MCC’s model: that policies matter, results matter, and country ownership matters.
One of the key pillars of MCC’s model is that country ownership matters for results. In broad terms, the idea of country ownership is that donors’ engagement with developing countries should reflect the understanding that partner country governments, in consultation with key stakeholders, should lead the development and implementation of their own national strategies and that foreign aid should largely serve to strengthen recipients’ capacity to exercise this role.
When MCC was founded, there was widespread skepticism about the effectiveness of foreign assistance. Many observers, both external and internal to development institutions, agreed that too much aid was being spent on poor projects in service of poorly defined objectives with correspondingly little understanding of what these funds were achieving.
Publish What You Fund launched their fourth annual Aid Transparency Index (ATI) today. The overall finding is that while many donors have made a number of international aid transparency commitments, the majority are falling short and not publishing useful information.