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USAID Makes Steady but Slow Gains on Transparency

WASHINGTON, Mar 22 2013 (IPS) - The United States’ main foreign assistance agency is getting widespread plaudits for new data on a series of internal reforms aimed at aid improvement, but some development experts are pointing to a persistent opaqueness from the agency.

In a first-of-its-kind report released this week, the U.S. Agency for International Development (USAID) has laid out the progress it has made under a key reform initiative undertaken over the past three years.

“This report does provide a nice, concise summary with policy descriptions and challenges, but it could go further in its attempt to be transparent,” Sarah Rose, a senior policy analyst on the Rethinking Foreign Assistance team at the Center for Global Development (CGD), told IPS.

The report focuses heavily on new evaluation policies aimed at increasing accountability and country ownership, incorporating new technologies (“from improved seeds to mobile phones”) and leveraging “high impact” partnerships, specifically with the private sector.

In the past, USAID has been widely criticised for a lack of transparency. While the agency is currently in the midst of a massive overhaul of related policies, just this past October an advocacy group called Publish What You Fund ranked USAID just 27th out of 43 foreign aid agencies, in terms of transparency.

To address such criticisms, in 2010 President Barack Obama unveiled a policy directive that spurred the new round of reforms. At the forefront of its objectives were the development of “robust … budget and evaluation capabilities”, progress toward which the new report outlines.

For instance, a new policy has been introduced that requires every major U.S. aid project to undergo a rigorous evaluation conducted by an independent third party. The report touts that this new policy has already been called “a model for other federal agencies” by the American Evaluation Association, a professional association for evaluators, and that it has led to budgetary changes in a third of the cases examined.

Some aid organisations have also expressed enthusiasm about increasingly collaborative partnerships between the United States and recipient countries, a break from the old structure in which the host countries were seen as less active participants in project design.

“The progress demonstrated in the report, especially on promoting sustainable development through high-impact partnerships, demonstrates a commitment to ensuring that people are the leaders of their own development,” Gregory Adams, Oxfam America’s director of aid effectiveness, said in a release.

They point particularly to the development of Country Development Cooperation Strategies (CDCS), five-year plans drafted collaboratively by the United States and recipient countries that identify the needs of partner countries and detail specific paths forward. CDCSs ostensibly give host countries more of a stake in USAID development projects.

The new report finds that the percentage of USAID funds allotted to local institutions grew from 9.7 in 2010 to 14.3 in 2013. That puts the agency at the halfway mark of a five-year goal of 30 percent by 2015.

Transparency concerns

Still, many see room for improvement in USAID’s partnership strategies.

“USAID has done a good job refurbishing its human capacity and bringing on additional people,” George Ingram, the co-chair of the Modernizing Foreign Aid Assistance Network (MFAN), an advocacy group, told IPS.

“But it needs to do a better job providing its employees with training and advanced managerial skills to help them keep abreast of new developments.”

Transparency and accountability concerns are also central. Although the report outlines a 50-percent increase in local partnerships by USAID, it lacks detail about what local institutions were partnering with USAID.

“There are a number of stakeholders who want to know exactly what those local partnerships are,” CGD’s Rose told IPS. “Doing so would allow stakeholders to do their own analyses.”

Similarly, although the paper reported that USAID had increased its public-private partnerships by 40 percent over the past three years and leveraged an additional 383 million dollars of non-U.S. government money toward development goals, the report made little mention of the companies or projects involved in those partnerships.

For some, the greatest threat to increased transparency could be a greater reliance on private-sector funds in development assistance. This has been at the core of a decade-long shift in USAID projects, and now looks set to continue to increase.

“In a world where foreign direct investment flows vastly outpace development assistance,” the report states, “we have to enable global investment and local private sector entrepreneurs to serve as engines of sustainable growth for even the most vulnerable communities.”

MFAN’s Ingram says that public-private sector initiatives can indeed be complementary in supporting economic growth in host countries.

“To some extent, government organisations are good at formulating plans about what needs to be done,” he says. “But the private sector knows how to get those things done – on the ground, in the marketplace, for their clients.”

But Ingram also notes looming barriers to public-private cooperation, highlighting the possible obstacles to transparency that a strengthened public-private partnership would imply. There is a degree of “public trust”, he says, to which government agencies are beholden by virtue of operating on taxpayer funds.

“In honouring and respecting that public trust, [government agencies] end up developing a lot of rules and regulations to make sure that the way they conduct business is open to public scrutiny,” he says. “In the end, there has to be some balance between the rules and responsibilities that come with public funds, and the private sector that isn’t used to that.”

Indeed, the private sector’s inclination toward efficiency and profit at the expense of oversight and accountability is precisely what concerns many development advocacy groups here in Washington.

In a conversation with IPS earlier this month, Janet Redman, director of the Sustainable Energy and Economy Network at the Institute for Policy Studies, a Washington think tank, expressed concern about public-private aid collaboration blurring the line between two very different measures of progress.

“The danger lies in pretending gross domestic product and foreign direct investment are the same thing as making economies more sustainable and enabling them to meet the needs of their citizens,” she said.

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