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U.S. Foreign Aid Approach Is Outdated, Experts Say

WASHINGTON, Apr 18 2014 (IPS) - U.S. foreign aid is becoming increasingly outdated, analysts here are suggesting.

Rather, reforms to U.S. assistance need to focus on issues of accountability and country ownership, according to a policy paper released this week by Modernizing Foreign Assistance Network (MFAN), a prominent coalition of international development advocates and foreign policy experts.

“Aid should be structured in a way that citizens and NGOs can monitor how the government implements development projects." -- Casey Dunning

“Aid is a strong expression of U.S. moral, economic, and national security imperatives, and in many contexts the U.S. is still the most significant donor,” the paper states. But according to many metrics, U.S. aid is both non-transparent and inefficient.

“The United States needs to frame and deliver aid in a structured way that would support the effectiveness of aid in partnership countries and generate sustainable results,” Sylvain Browa, director of aid effectiveness at Save the Children, an independent charity, told IPS.

“In such dynamic environments, where all aid remains critical to savings lives, curing diseases and putting children in school, new players come to stage, and these include local leaders and citizens who know first-hand what their priorities are.”

In terms of aid quality, the United States ranked just 17th out of 22 major donors according to the Commitment to Development Index in 2013. Each year, the index ranks wealthy countries on how efficiently they help poor ones in areas of aid, trade, finance, migration, environment, security, and technology.

According to that ranking, just one U.S. agency was rated “very good” in terms of transparency. The agency responsible for the bulk of U.S. foreign assistance, USAID, was rated just “fair”, while the State Department and PEPFAR, the landmark anti-AIDS programme, were rated “poor” and “very poor” respectively.

MFAN suggests that a newly streamlined policy agenda, structured around two “mutually reinforcing pillars of reform” – accountability and country ownership – could significantly improve the effectiveness of U.S foreign aid.

“The donor-recipient paradigm of foreign aid is outdated,” the report states, and without priority on these two pillars, “we revert to old, tired, and stagnant paradigms of aid – paradigms that unnecessarily perpetuate aid dependency.”

The new program is designed to empower communities, which in turn should carry out country ownership, says George Ingram, MFAN’s co-chair and a senior fellow at the Brookings Institute, a think tank here.

“The two pillars are prerequisites to build the kind of capacity that will help enable leaders and citizens in the aid-recipient countries to take responsibility for their own development,” Ingram told IPS, “such as spending priorities, as well as making evidence-based conclusions about what works and what doesn’t.”

The report emphasises that such changes are also somewhat time-sensitive. Given looming domestic and international deadlines, MFAN’s analysts say the next two years constitute “an important window of opportunity for U.S. aid reform”.

“The midterm elections in 2014 are certain to shake up the membership of Congress,” they write. “In 2015, the Millennium Development Goals will expire and a new global development agenda will take its place. And 2016 will bring a new administration and further changes on Capitol Hill.”

Local destiny

The recommendations have received quick support from other development groups.

“The paper is of universal importance to all aid agencies, implementers and thinkers,” Casey Dunning, a senior policy analyst for the Centre for Global Development, a think tank here, told IPS.

But she warned that there were inherent difficulties in the recommendations, as well.

“There is a lot of rhetoric on what country ownership means or what accountability encompasses,” she says. “Ambiguities in definitions and measurements of accountability and country ownership make it difficult to make aid more effective. However, the MFAN report helps to find metrics for capacity-building and to see what it actually means.”

Save the Children’s Browa, too, notes that the concepts outlined in the report are not necessarily new.

“But when put together, these pillars are vital to building local capacity and creating local ownership of resources and tools for development,” he says, “so that country leaders and citizens can take leadership in their destiny.”

To achieve better transparency, the report’s authors are calling on the U.S. government to fully implement new global standards called the International Aid Transparency Initiative (IATI) by the end of 2015. In addition, the ratings of the Aid Transparency Index should be extended to all U.S. government agencies, which currently doesn’t happen.

Further, all U.S. agencies should begin contributing comprehensive financial information to a landmark new online government information clearinghouse, known as the Foreign Assistance Dashboard.

Finally, aid and development decisions need to be guided by rigorous evaluation, MFAN says. Together, transparency and evaluation will help these agencies to achieve stronger results for both U.S. taxpayers and communities receiving U.S. assistance.

In all of this, Ingram notes, learning is one of the most important aspects in the policy proposal. “Data and evaluations are useless unless we learn from them and use them to make better decisions and achieve better results,” he says.

Defining partners

The aid paradigm has already shifted, MFAN’s report suggests. “Today, countries that give support through bilateral assistance and countries that receive such support are partners,” it states.

Yet how exactly to define those partnerships remains a work in progress.

“Aid should be structured in a way that citizens and NGOs can monitor how the government implements development projects,” CGD’s Dunning says, “and how the resources are utilised.”

Would such an approach run the risk of strengthening corruption at lower levels? Dunning says this isn’t necessarily the right question.

“We can’t shy away from the corruption issue, since it’s such an integral issue for debate,” she says. “And transparency is the key. It is vital to every programme, every sector. Together with other tools, such as evaluation and learning, transparency contributes to sustainable country ownership, which militates against corruption.”

MFAN’s Ingram, meanwhile, sees the empowerment of local communities as an anti-corruption tool in itself.

“Engaging smart and trusting people who know the culture and know how to manoeuvre through the dynamics of that country is very important,” he says.

“Informed and empowered citizens who demand good governance and sound priorities act as a check against corruption.”

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