Development interdependence: Locally driven, globally informed

Concept of locally led development

The objective of locally led development is for national actors, including government, institutions, and citizens, to drive their own development. An outstanding issue in the path to localization is determining the appropriate role of external actors as they transition from a leading to a subsidiary role in development. 

The donor community has been on a two-decade trek to sort out the meaning and execution of local ownership—the concept that development is most effective and sustainable when it is driven by local stakeholders based on local priorities, local design, local execution, local monitoring, and local evaluation. The 2005 Paris Declaration on Aid Effectiveness was seminal in emphasizing the role of local ownership, interpreted principally as the national government. Intergovernmental debates evolved through the 2008 Accra Agenda for Action and the 2011 Busan Partnership for Effective Development Cooperation, which stressed, among other stakeholders, the role of local governments and civil society organizations. 

Much of the recent discussion on aid effectiveness has focused principally on local ownership. But the original Paris Declaration sets forth five interdependent principles that contribute to aid effectiveness, of which ownership, possibly the most essential, is but one—alongside alignment, harmonization, managing for results, and accountability. These principles remain a helpful guidepost, even as they continue to be updated.¹

The concept of locally led development is based on the shortcomings of traditional top–down approaches and the recognition that the agency of local stakeholders, along with local management of resources, are what are most relevant. The current laser targeting on local ownership is an appropriate response to three-quarters of a century of development driven too often by donor priorities and perspectives and accountability to their own constituents, often at the expense of local priorities and perspectives. The shift is probably necessary to steer the supertanker-like operations of donors to a more locally driven dynamic.

The endgame

However, localization should not be seen as the destination. Nor is it appropriate for all circumstances, and it can be taken too far. While being guided by local voices and priorities is always essential, every country in the Global South is on a different development trajectory. For example: 

• Developing countries have a mix of capabilities to advance their own development and needs for external support. 

• Many countries are mired in conflicts, humanitarian crises, and fragility that impair locally led development. 

• Too many countries have governance that is predatory, non-inclusive, or non-responsive to the needs and priorities of citizens. 

In addition, in these contexts and others, international knowledge, experience, capabilities, and access can contribute to the diffusion of innovation and successful participation in a global political and economic order that positively affects development. And there are universal values—human rights, inclusion, gender equity, democracy—that the U.S. and other donors seek to advance and will not abandon. 

It is important to acknowledge that, despite localization being the focus in many dialogues on development, it is one of multiple steps along the development journey. Think of localization in terms of the related concept that self-reliance is not the economic endgame either. As far back as the 18th century, Adam Smith explained that trade and specialization surpass economic self-reliance in creating economic efficiency and wealth for the overall benefit of society. 

The endgame is inclusive economic, social, and political development that is owned by national and local stakeholders and built on the best of local and global knowledge and capabilities, best characterized as locally driven, globally informed. 

USAID’s targets

Take the case of USAID. Building on the path initiated by her predecessors, Administrator Samantha Power has made USAID a leading advocate for localization. Setting a hard target of 25% of “eligible” U.S. foreign aid being programmed directly to local organizations by 2025 is an appropriate goal to move processes toward the more ambitious 2030 target of 50% of all United States government aid being locally designed and implemented, an acknowledged innovation on how to measure locally led development. 

But fixed targets lead to hard questions:  

• What is the appropriate definition of what organization/program qualifies as “local”?  

• What foreign aid falls under the rubric of “eligible”?  

• What are the pitfalls of promoting “local development autarchy” (e.g., executing development programs without the benefit of global expertise and experience), and how can they be avoided?  

• What is the appropriate role of traditional international expertise and development implementers (INGOs, universities, companies)? 

In an interconnected world, it is difficult to define what is local and know how strict a definition is appropriate. 

Definition of local

USAID (a) has a definition of “local entity” that is subject to interpretation by each of its operating units (country missions and headquarter bureaus and offices), and (b) identifies categories of assistance “eligible” for direct funding to local entities on a relatively narrow base of all U.S. development and humanitarian assistance. Publish What You Fund (PWYF) bases its calculation on (a) a stricter definition of local (local organizations with no connection to international actors) and (b) a wider band of USAID budgetary accounts. Compared to USAID’s calculation that in FY 2022 10.2% and in FY 2023 9.6% of its funding is going to local organizations, a sampling of country programs by PWYF and Oxfam using their more rigorous definition of local and a broader scope of eligible fundings, found about half that level going directly to local entities.  

The advantage of a strict, clear definition is it makes it easier to assess progress and accountability. The disadvantage is that it can miss important nuances. USAID’s practice of allowing each of its many operating units to determine what counts as local allows for nuance but permits inconsistent determination of what is local.  

The conundrum of a definition revolves around who is in control and how to determine that. This can be seen in a few examples (both real and conceptual) of existing organizational and program structures that may or may not be determined as local:    

• Local and national government. 

• A U.S. nonprofit running a USAID-funded program 100% staffed by local citizens whose function is to respond to technical assistance requests from a government ministry. 

• A U.S. nonprofit, most of whose senior staff (VP level) are non-U.S. citizens resident in developing countries and whose function is to provide finance and other support to indigenous organizations, and with a third of the board from the Global South. 

• A regionally based NGO governed from and works only in developing countries—may be characterized as a “Southern-led INGO”. 

• An international nonprofit that is a federation of independent, sovereign national organizations. 

• A global consulting firm that is a network of independent national entities governed by the collection of Northern and Southern partners, sometimes with Southern partners in the majority. 

These examples are mostly locally or regionally managed with a level of global input.

Role of international expertise

In the ongoing debate among USAID and its implementing partners, and within the broader development community, both in the U.S. and globally, as to the appropriate role of those international implementing entities, it is useful to identify what the role of international actors might be in supporting local actors in a localization frame. What are the functions of international expertise and implementers that are relevant to a local/global dynamic, and how can they perform a supportive rather than a controlling role? Possibilities include: 

• Share knowledge and experience from other countries and communities. 

• Provide access to global networks. 

• Serve as a mediator between local stakeholders. 

• Provide political coverage or protection for local stakeholders. 

• Strengthen capacity. 

• Convene partners and stakeholders, local and global. 

• Help access funding. 

• Provide administrative functions required by donors (i.e., back-office functions such as financial accountability, risk management, and reporting and compliance functions). 

This mental walk-through of why and how international expertise and entities can contribute to locally led development occurs in a frame of broader questions that are almost philosophical in nature. The answers to these will be driven by context, values, and worldview. But there are higher-order questions that must be addressed first: 

• What does success in localization/locally-led development look like—sustainability, cost effectiveness, efficiency, best use of donor resources? 

• What do we mean by “local”—national government, local communities, women’s groups, NGOs, companies, individuals? 

• Different identification of who or what is “local” may depend on the circumstances and objectives. 

• Who determines who or what is “local”?

3 framing questions

The central issue of this essay is to consider what role international actors should play in the pursuit of successful development localization. The topic has received inadequate attention and would benefit from explicit discussion among local stakeholders, donors, and implementers. In particular, three specific issues need to be addressed: 

• Is there a role for international expertise and entities in the localization frame, and if so, what is that role? 

• Can USAID, other donors, and intermediary organizations create structures and operating dynamics that provide global experience and expertise in ways that respect and support local actors being in control of priority setting, design, and execution? 
• In what ways can USAID modify its procurement processes to facilitate the participation of local and national Southern organizations?²

Below is a summary of the ideas put forth during the roundtable in response to the three framing questions at the end of the essay. The conversation was robust and focused principally on the three framing questions. The views expressed were as diverse as the participants, with an overall perspective that there is a role for international actors in a localization frame, that power and control have yet to be effectively handed over, and lots of ideas but no consensus on the most effective way to accomplish that.

Question: Is there a role for international expertise and entities in the localization frame, and if so, what is their role?

• Fund Raiser: Mobilize resources for local organizations.
• Convenor: Provide a venue for dialogue between local organizations, INGOs, and funders.
• Networker: Connect local organizations with INGOs.
• Knowledge broker/Interpreter: Translate and interpret donor requests and requirements to local organizations.
• Trainer/Coach: Strengthen knowledge and capabilities in technical areas of development.
• Capacity builder: Strengthen capacity in areas of human resources, leadership, and responsiveness to local needs and priorities.
• Intermediary: Serve as the go-between for local organizations and international funders, specifically for local organizations not capable or desirous of direct relationships with international donors.
• Advocate: Represent Southern voices in international networks and dialogues.
• Proposal writer: Assist with proposals to international donors.
• Defender: Serve as a shield for local organizations from local political pressures.
• Mediator: Mediate among local organizations and with international entities.
• Administrative supporter: Provide back-office support to meet donor administrative requirements.

Question: Can USAID, other donors, and intermediary organizations create structures and operating dynamics that provide global experience and expertise in ways that respect and support local actors being in control of priority-setting, design, and execution?

Key recommendations included for USAID to:

• Provide funding to cover the full overhead expenses of local organizations.
• Translate proposals into multiple languages.
• Hold convenings in the South and in places that do not require a visa.
• Create standards and norms to manage risk and minimize inherent risks to local organizations.
• Avoid implementing organizations co-opting the localization agenda (e.g., nationalization of country offices, decentralization of power from headquarters).
• Extend funding through locally trusted intermediaries (like the United Way).

Question: In what ways can USAID modify its procurement processes to facilitate participation of local and national Southern organizations?

• If there was one overarching point, it was that if the funder requires funding in a certain fashion, the implementer will comply.
• Make local partners the default. Require documented rationale for why international actors are operating without a local partner.
• Provide more transition awards.
• Include funding for capacity strengthening of local organizations.
• Provide standalone and integrated capacity-strengthening awards.
• Make local organizations the prime applicant and the international implementer responsible for financial due diligence.
• Move more funding through grants, thereby reducing the administrative/reporting requirements.
• Include handing over the power of projects to local organizations as a required deliverable.
• Measure against local capacity strengthening best practice indicators.
• Separate the sub-contractor and prime relationship at the point of the award.
• Change the program cycle to include the whole systems strategy development with international and local stakeholders participating in the development of the strategy. Then fund organizations, people, and partnerships rather than projects.
• Require exit strategies for development and humanitarian assistance.
• Provide funding for INGOs to serve as the convener of local organizations for project co-development.
• Restrict solicitations only to local actors, excluding ones that are deemed affiliates.
• Reduce the administrative paperwork, including simplifying periodic reporting.
• Hold the local grantee against its own objectives, not the donor’s package of indicators.
• Build in accountability to local stakeholders.

USAID’s localization efforts build upon many years of past efforts and lessons learned around promoting local ownership. Many of these lessons inform how the agency understands the role of international partners—including INGOs, large and small development contractors, faith-based organizations, and United Nations agencies—in advancing locally led development.

One fundamental lesson relates to the rationale for locally led development. For years, the international community has considered local leadership and ownership over goals and processes to be critical for effective programming and sustained results. While there is still broad consensus on this point, the motivation for locally led development has expanded to include a focus on equity, with greater inclusion of the people and communities affected by the aid system. Shifting power requires rethinking everyone’s roles and practices, including those of international partners.

A second, related lesson pertains to how USAID frames its localization goals. In the past, the agency has emphasized direct local awards as the main way to advance localization and track its progress. Now, with more emphasis on shifting power, USAID is also examining how it creates opportunities for local actors to exercise influence over development programming. Control of resources is an important form of power, but local actors can also exercise power in other ways: setting the agenda; developing solutions; and bringing their capacities, leadership, and resources to bear to make those solutions a reality. International partners have an important role to play in creating opportunities for these types of local leadership and in supporting the broader development and humanitarian assistance community in being responsive to those locally identified priorities and solutions. 

Drawing upon these lessons, USAID has reaffirmed its commitment to shifting funding and decisionmaking power to the people, organizations, and institutions that are driving change in their own countries and communities. Since 2021, USAID has been working toward two agency-wide localization targets: 

1. To channel a quarter of USAID funding directly to local partners. 
2. To ensure that, for the majority of USAID programs, local actors are in the lead for project design, implementation, and results measurement. 

While USAID’s direct local funding target often gets more attention, the local leadership target is equally important. And it is to this goal that international partners can make valuable contributions. 

The (many) opportunities for international partners to advance locally led development

International partners can help shape international systems, including the aid system, to be more inclusive of local actors. They can support local actors’ integration into international networks and markets and facilitate coordination and collaboration between donors, INGOs, and local actors. They can contribute evidence on the impact of locally led approaches and help advocate and mobilize resources for locally led development. 

In their work with local actors, international partners can collaborate, learn, and adapt with local stakeholders throughout program implementation, for example through accountability and feedback mechanisms. They can bring local actors into co-creation processes during design and implementation. 

International partners can fund subawards to local organizations in ways that elevate local leadership. They can view their relationships with subawardees not just instrumentally, as a way to deliver specific elements of a program, but as an equitable partnership that aims to strengthen the broader local system. They can strengthen local subawardees’ organizational health by budgeting to support their full cost recovery (for instance, by implementing the revised federal regulations, effective October 1, that permit a 15% indirect cost recovery rate for subawardees). International partners can also serve as subawardees in support of directly funded local partners. 

International partners can also engage in valuable capacity strengthening, mentoring, and coaching of local organizations, building on their existing strengths and supporting them to achieve their goals. 

The international partner community is having important conversations about its role in advancing localization. INGO leaders are emphasizing locally led development and identifying the changes their organizations can make to advance these goals. Some INGO boards are paying increased attention to their organizations’ localization efforts, alongside other elements of organizational health. Movements like the RINGO Project (Re-Imagining the INGO and the Role of Global Civil Society) and the Pledge for Change are providing spaces for international organizations to think and talk with Global South-based organizations about what it means to form more equitable partnerships with local actors. 

USAID’s enabling role

USAID also has a role to play in encouraging and shaping the nature of relationships between international partners and local actors. The Agency recently revised its operational policy on the program cycle to set expectations for staff to integrate local knowledge and local leadership across strategic planning; program design; implementation; and monitoring, evaluation, and learning processes. To guide efforts to integrate local leadership into its programs, USAID has developed tools and resources, many of which are relevant to international partners. Some are broadly applicable, like the locally led development spectrum and checklist tool. Some are sector-specific. For example, the Bureau for Democracy, Human Rights, and Governance (DRG) produced a series of papers outlining the shifts that better elevate local leadership and support more effective rule of law, civil society, and governance programs. And the Bureau for Resilience, Environment, and Food Security (REFS) published new “Localization Activity Design Guidance” for activities related to Feed the Future initiative. 

USAID is starting to be more intentional about understanding the ways its programs create space for local actors to exercise leadership. In 2023, the agency developed and piloted a new “locally led programs indicator” that tracks the extent to which programs utilize, over the lifespan of an award, a range of “good practices” that advance locally led development, including listening tours; co-creation; local subawards; participatory monitoring, evaluation, and learning processes. A new USAID report, “Committed to Change: Localization Progress Report FY 2023”, discusses the results of the pilot, as well as some adjustments the agency is planning to make to the indicator. Forthcoming changes will streamline and clarify what the metric seeks to measure and reflect greater ambition for what it means for a program to demonstrate commitment to local leadership. 

A role for everyone, grounded in values

The development and humanitarian ecosystems are made up of a wide range of actors. The central objective should be to leverage and build upon the unique expertise, resources, knowledge, skills, and networks of all actors in a manner that creates or supports the conditions for local actors to exercise their leadership. Those conditions are predicated on relationships based on transparency, listening, trust, mutuality, and respect. Attention to these values, by donors and international partners alike, can help build a more effective, inclusive, and equitable aid system.

In bilateral development partnerships, the Millennium Challenge Corporation (MCC) adopts a relatively unique operational model. MCC programs work with international contractors but under the authority and management of local stakeholders, which include representatives from the partner government, civil society, and the private sector. The model is an example of the question posed by George Ingram in the opening essay—can donors “create structures and operating dynamics that provide global experience and expertise in ways that respect and support local actors being in control of the priority setting, design, and execution”.

MCC’s operationalization of country ownership has three tangible dimensions: countries determine the investments, implement the programs, and are held accountable by their domestic stakeholders.

Countries control the prioritization process: Once eligible for MCC compact or threshold assistance, partner countries choose the sectors where MCC invests, based on an economic analysis of the countries’ key constraints to economic growth and informed by meaningful engagement with citizens, civil society, the private sector, and other donors. MCC and partner countries then work together to design investments that meet country priorities, are cost-effective, and have strong potential to reduce poverty through economic growth. MCC does not set out to focus its investments in any specific sectors.

• Countries implement their own programs: MCC has small in-country missions in program countries (typically only two U.S. direct hires). MCC requires partner country governments to establish accountable entities to lead program implementation. These entities, typically established by law or other formal instruments and known as Millennium Challenge Accounts (MCAs), are led, managed, and staffed by country nationals and work directly with existing government ministries and other domestic stakeholders.
• Countries are accountable to domestic stakeholders for results: Each MCA reports to its own board of directors (or similar governing entities), including ministerial officials and representatives of the local civil society and private sector. Thus, MCA boards are accountable to national governments and their citizens for the implementation of MCC-funded programs, transparent decisionmaking, and achieving results.

Notwithstanding how country ownership is operationalized in MCC’s model, as described above, the reality is that there are only a few entities, usually based in the Global North, that can build infrastructure at the scale required by MCC-financed programs or address specific due diligence requirements.

The uniqueness of MCC is characterized in two specific ways. First, the programs being implemented by international entities were codesigned with government counterparts. Second and more important, the local accountable entity, the MCA, selects the implementing contractor and oversees its work—i.e., the MCA is the client. The MCA performs procurement and contract management functions for implementing their programs—meaning they are at the helm of decisionmaking and monitoring the performance of the international (or local) entities they have selected to implement planned activities. This separates the MCC model from other donors’ models through a commitment to provide more authority and control (and thus, more power) to country counterparts. To illustrate: When MCC says it is providing a 345-million-dollar grant through a compact with Malawi, as we did in 2011, Malawians managed 100% of that money through their locally accountable entity.

There are some important nuances related to the degree to which the MCA can localize or fully manage the procurement process. First, MCC’s “Program Procurement and Grant Guidelines” ensure that MCA-conducted procurements are done through international competitive bidding. There is no American preference and no local preference. Second, once the required procurements have been identified and a procurement plan approved by the MCA board, they must submit key documents to MCC for “no objection” before proceeding with procurement. In other words, while the MCA performs the work, there is an accountability structure in place that is responsive to MCC’s requirements and standards.

Recently, MCC has undertaken an exercise called Procurement@20 aimed at shifting an even greater degree of ownership and responsibility for the procurement process to MCA partners. These reforms reduce the number of MCC touchpoints during the procurement process and optimize the role of the MCA Board of Directors in procurement oversight. On average, internal assessments suggest that the Procurement@20 reforms will reduce procurement timelines by 30%. These changes grant MCAs more authority and more accountability for ensuring quality procurements while also saving time.

Furthermore, MCC is undertaking an exercise to explore ways to deepen its commitment and implementation of country ownership and locally led development. This effort aims to pursue and reinforce principles at the heart of locally led development: more local ownership over priorities, implementation, and resources. The goal is to support development leaders to pursue development in the ways local partners see fit.

This review includes conversations across the MCC and within civil society. Most importantly, this review includes discussions with our MCA colleagues who know what it will take for MCC to support their ability to deliver MCC programs in close consultations with their local stakeholders.

We ask external audiences to pay attention to MCC efforts and keep the organization accountable to its commitment to country ownership and locally led development.

At the end of the day, donors such as the MCC don’t “do development.” Instead, the governments, their people, companies, and civil society are at the helm of solving their development challenges. MCC hopes to partner in a manner that supports its leadership. And ultimately, we hope the agency’s model, and what has been learned from 20 years of experience can be a successful approach from which other donors can learn.

The development and humanitarian needs around the world in 2024 are daunting, and the aid system will require robust and effective responses from all stakeholders to meet global challenges. As an organization rooted in Catholic Social Teaching, Catholic Relief Services (CRS) centers its work on the ideas of subsidiarity and solidarity. Subsidiarity requires acknowledging that those closest to a challenge are often best positioned to identify a response and that all people have the right to be the authors of their own future. As such, one must look to local development and humanitarian institutions as expert voices on community and national needs and essential leaders for effective solutions. Solidarity calls on everyone to stand together with sisters and brothers around the world to support these solutions and to work together toward a world free of poverty and injustice, and in a way that respects the dignity of all people.

The drive for a more locally led future: Progress, and much left to do

These organizational values, as well as experience working in partnership with thousands of local organizations, lead to ardent support for the movement for more locally led development. It has, therefore, been heartening to see growing support for localization efforts in recent years from donor agencies, Congress, peer agencies, and other stakeholders. As George Ingram’s opening essay notes, the need for local leadership in development and humanitarian efforts is now widely recognized.

However, while it is important to recognize the increased attention localization has received and to celebrate policy progress (such as USAID’s Local Capacity Strengthening Policy, and recent changes in the “Assistance and Acquisition Policy”), it is equally important to be clear-eyed about where progress has stalled. Reflections on the roles of local and international actors in the aid system must be rooted in current reality. They must take care not to fall victim to outdated tropes or misperceptions.

Currently, nearly all donor resources and decision-making power remain in the hands of international actors. Despite ambitious targets, international entities still receive over 90% of USAID funding (see Publish What You Fund’s research, which indicates it is closer 94.3%). On the humanitarian side, USAID’s Bureau for Humanitarian Assistance has reported that 99% of its funding goes to international actors. Localization efforts are, of course, about more than just funding. But leadership opportunities and significant decision-making roles remain elusive for local actors as well. As the Movement for Community-led Development notes in a recent open letter, there is “longstanding frustration by many local leaders [about] being effectively excluded from international conferences and meetings about locally-led development”, and this frustration is mirrored at policy tables, coordination mechanisms and policy dialogues. Given this reality, any argument that raises concerns about localization going too far should be approached with great wariness.

Similarly, despite some assertions to the contrary, in reality, there should be no lack of clarity around localization’s objectives nor confusion that localization of aid is the end goal. Poverty alleviation, effective and just development, and effective humanitarian assistance are the goal. The political question at hand is merely if the aid system is ready to realize a shift in power and move beyond assuming that international organizations are the only stakeholders ready and able to lead any part of the process.

Aid stakeholders’ changing roles

As the aid world has increasingly recognized these twin needs for both local leadership and global partnerships and solidarity, the debate has not been about whether global actors have a role to play but rather how each stakeholder can most effectively have the greatest development impact. Much has been written in recent years about the future roles, and potential impact INGOs can have in a changing aid system, including the Grand Bargain’s caucus on the role of intermediaries, Peace Direct’s “Nine roles intermediaries can play in international cooperation”, George E. Mitchell, Hans Peter Schmitz, and Tosca Bruno-van Vijfeijken’s “Between power and irrelevance: The future of transnational NGOs”, and the body of work coming out of the RINGO project. Throughout all of them, there is a clear consensus emerging that stresses the need for INGO adaptability and increasing their capacity to take greater intermediary roles such as technical assistance provider, process facilitator, advocate, solidarity partner, network supporter, etc.   

Many INGOs have seen the powerful impact taking on these kinds of roles can have for local partners and communities, and for development outcomes. The biggest challenge for INGOs to take on these roles more robustly is the current INGO operating model and the lack of available resources to transform it. As long as INGOs are funded only to directly implement projects, ceding leadership to local actors and taking on new more intermediary roles will remain challenging. The most direct way to help INGOs transform is for donors to change what they fund.

Partnerships between local and global organizations can be effective. Whether via the United States President’s Emergency Plan For AIDS Relief (PEPFAR) transition awards that have helped local organizations transition from sub to prime implementer of large-scale health programming, or through the High-Performing Implementers (HPI) Initiative where targeted solutions packages have helped national governments transition into principal implementers of Global Fund awards, or through the EMPOWER program, where demand-driven capacity investment and support result in local partners leading increasingly complex emergency response, INGOs can play a helpful role in advancing locally led development. However, too often these roles require self-funding, as they do not line up with donor funding opportunities.

If donors like USAID want INGOs to play more effective intermediary roles, their action must go beyond policy change and look firmly to resources. Specifically, USAID should consider:

• Ensure adequate funding for effective, holistic, demand-driven capacity strengthening in line with its Local Capacity Strengthening The policy’s principles are powerful and hold the potential for transformational organizational change. However, its impact is directly correlated with the resources that are available and allocated for its application. Whether through stand-alone capacity-strengthening programming, or capacity-strengthening efforts that are integrated in key sectors, USAID must ensure that its level of investment in local organizations is aligned with its locally led development vision.
• Increasing, expanding, and strengthening transition awards. PEPFAR has shown that transition awards can be powerful mechanisms for local organizations to grow into new leadership opportunities and for INGOs to play an effective part in advancing that process. Their success should be built upon, and their use should be
• Supporting effective, trust-based equitable partnerships. It is well-documented that effective localization processes are often rooted in quality partnerships. CRS has found that the strongest partnerships are rooted in mutuality, trust, transparency, and commitment. However, too often, the time and resources required to support these relationships do not line up with procurement and grants management processes. USAID should ensure that partnership activities (identification, co-creation, strategic collaboration) that support effective capacity-strengthening and transition processes are also adequately supported and resourced.
• Prioritizing accountability, including by tightening the definition of local actors and ensuring meaningful metrics: It matters what type of institutions are able to take advantage of newly dedicated localized funding vehicles and local actors (see the NEAR network’s paper on definitions) and the international community (see IASC’s position on definitions) have been clear on what the parameters should be. A fair playing field specifically for local institutions to access funding is critical. It is not helpful to include misleading categories like “locally established” entities in the target group for access to localization funding if or to have a definition of “local entities” that includes international subsidiaries. Doing so will undermine policy goals.

Transforming the aid system is not easy, and there is much left to do. To be effective, donors and policymakers should focus on centering local leaders and their institutions, leveraging and strengthening quality partnerships, and supporting global stakeholders to adapt, all in the service of effective, efficient, sustainable and just development.

What role would local actors like INGOs to play in the humanitarian and development system? It is a question that INGOs should continuously ask local partners, other local organizations in the operating context, and representatives of local and national institutions, including government officials. While there will be myriad responses, common themes likely will emerge based on the sector, geographic location, and capabilities of the INGO doing the asking.  

For example, Oxfam Pilipinas undertook a process to explore its role in the humanitarian and development sectors in the Philippines as it became a national organization and the country affiliate of Oxfam International. As a result, within the country, Oxfam Pilipinas will now focus its own localization agenda on localizing knowledge, decision-making spaces, and money. This will mean working to see local actors more substantively involved in the creation, diffusion, and articulation of knowledge; greater representation of local actors in spaces of discourse, debate, contestation, and decision-making; and greater access by local actors to development funds. These steps will have implications for Oxfam Pilipinas’ operating model, core competencies, and leadership role within the country.   

In a different country context, partners in Iraq see an important, specific role for INGOs in their influencing capacity. A 2020 Oxfam America report described a local NGO’s  perspective, “There is still a huge need for international actors, both for funding and capacity building. And the pressure they bring by shedding light on things has more impact than if locals shed that light. The watchdog role is real. If the internationals pull back, the checks and balances disappear.”  

These two examples illustrate why it’s so important to ask local actors what they need in their context and that a “one size fits all” approach to the changing role of INGOs will not work. Donors, including USAID, also should continue to increase their engagement with local actors to design activities and awards that are responsive to local priorities and have local organizations implementing them. Out of that process, INGOs can then plug into where those locally driven projects need their support—not their leadership.  

Fortunately, USAID has been creating tools and guidance for years to ask local actors what is needed and how to address challenges in their communities. These tools and guidance can be the building blocks for further clarifying the roles of INGOs and local actors in a specific context. For example, USAID’s  “Whole Systems in the Room” (WSR) is “an approach that brings together as many different stakeholders as possible, often in an intensive workshop, to strengthen relationships, to learn from each other’s perspectives, to build consensus and identify solutions to development problems they are facing, and commit to collective action” (USAID, Toolbox of Empowerment, 2022). Co-creation resources abound for use by Missions and implementing partners, as do Collaborating, Learning, and Adapting resources. Finally, the Locally-Led Development Spectrum and Locally-Led Development Indicator also provide opportunities for gaining greater clarity on new roles for INGOs seeking to change power dynamics within the aid system.  

Donors also must directly fund local organizations beyond current levels. Approximately 90% of USAID funding still goes to INGOs, international for-profits, and universities (USAID, Localization Progress Report, 2023). This must change. Local actors should be leading the response to humanitarian and development challenges. Donors have incredible power to shape the aid system and create incentives by choosing who and what to fund; specifically, donors should be funding local organizations to spearhead responses and INGOs to provide specific support. Therefore, it matters how donors define and differentiate between local stakeholders and INGOs. 

Unfortunately, several donor definitions of “local,” including the one USAID has adopted for its current localization agenda, do not make a clear enough distinction between local organizations and INGOs. The current definitions leave significant room for international organizations with offices around the world to receive funding as “local” entities. This issue is apparent in the underlying data from USAID’s 2022 and 2023 Localization Progress Reports, among other sources. For example, recent research by Oxfam and Publish What You Fund on USAID funding to development and humanitarian assistance organizations has demonstrated that USAID’s current localization initiative would benefit from a stricter definition of a local entity by excluding affiliates connected to INGOs.  

Ultimately, there is a need for the unique contributions of local partners, INGOs, and donors given the nature and scale of today’s humanitarian and development challenges. But if the sector is serious about having the individuals and communities most affected leading in the design and implementation of responding to these challenges, INGOs and donors must systematically ask local partners what role they would like INGOs to play and then create incentives and funding structures that enable each stakeholder in the system to embrace their new role.

There are two compelling and complementary arguments for localization—one rooted in morality, politics, and history; and the other, an instrumental case, rooted in development practice. While each of the two arguments has merit in its own right, this essay focuses on the instrumental case for localization—specifically, the link between localization and achieving sustainable outcomes at scale.

Since 2015, I have co-led the Scaling up Community of Practice (SCoP) that has 4200 members from more than 400 organizations in 70 countries. Approximately half of the SCoP’s members and organizations, and a growing portion of its leaders, hail from and reside in lower- and middle-income countries. The SCoP operates 10 working groups focusing on scaling development, climate, and humanitarian outcomes in a range of sectors and settings. Three of the most important insights from that work are: (1) with few notable exceptions, only governments and commercial markets have the capacity and incentive to deliver goods and services sustainably at scale; (2) transformational scaling involves permanent change in country-level systems and institutions; and (3) the time required for an effective transition to scale innovative products, services, and practices is rarely less than a decade.

Given these realities, successful scaling is almost impossible if it is not driven, led, funded, and provided by effective local institutions with the needed reach, capacity, source of funds, and staying power. Official development assistance (ODA) and private philanthropy—often delivered through time-bound, one-off projects that collectively represent a small share of the recurrent budget in many sectors and countries—are significant only to the extent they support, foster and enrich these permanent, place-based, demand-driven institutions and solutions. Simply said, no meaningful localization means no sustainable scaling.

The “sustainable outcomes at scale” argument for localization has implications for the nature of localization as well as its importance. For some, “local” means community level. For others, it means national. From the scaling perspective, national trumps local, with community-level interventions necessarily accompanied by the need for a realistic strategy for reaching very large numbers of communities. Likewise, from a scaling perspective, the first priority goes to those local institutions with the capacity and incentive to achieve development, climate, and humanitarian outcomes over time and at scale. That usually means focusing first and foremost on national and sub-national governments, linked where appropriate with major local private sector actors and key local intermediary organizations like universities, banks, and think tanks. The important exception to this is cases where these institutions are unreliable stewards and partners, but even here, the bias should be to support their reform rather than their subordination.

Fragile states are a special case because of the outsized importance of foreign assistance and the challenges posed by predatory governments, disputed legitimacy, or underperforming institutions. In these countries, people often view issues through the prism of underlying grievances, and the selection of local partners can easily have the unintended effect of exacerbating rather than mitigating these tensions. The reverse is also true. Conflict-sensitive actors and engagement strategies can sometimes provide important secondary benefits in addressing a conflict’s underlying drivers. In either event, localization is not conflict-neutral, a reality that takes on particular importance in a world where fragile states are the recipients of U.S. and global foreign assistance.

Finally, the scaling perspective has implications for the choice of local implementing partners since those organizations ideally constitute important parts of the local institutional infrastructure. A competitive assortment of effective, country-based service delivery, policy analysis, and advocacy organizations, private firms, NGOs, think tanks, and public institutions play a central role in most wealthy countries, and the strengthening of these institutions should be an important priority in emerging economies and newer democracies. That requires organizations that are built-to-purpose for local markets and requires a willingness by host governments and others to engage those institutions through grants and contracts. Foreign aid can help catalyze the evolution of this set of institutions by using them in a way that facilitates and stimulates their broad use by a host country’s government agencies and other established institutions including, but not limited to, external donors. Thus, according to insights from the SCoP,  anything that supports positive movement in that regard is progress. Anything that works against the growth of a dynamic and competitive array of local public and private institutions able and willing to serve an array of domestic clients is inadvertently a step in the wrong direction.

The potential roles of international funders and implementers are significant but not central in supporting the needed changes in policy and practice. On the funding side, while external resources are small relative to the size of most problems and tend to be time-bound, they often have outsized influence when they provide the bulk of the discretionary resources needed to introduce and scale new practices. Used properly, they can materially advance sustainable scaling. Likewise, when they are inattentive to the dynamics of long-term change, they can seriously distort the incentives and strategies of local actors.

During funding implementation processes, U.S. and other international partners can play important roles as well. To mention four:

• Where necessary, most obviously in fragile states, external third parties are often able to position themselves as independent actors for key analysis, convening, intermediation, and fund management activities.
• In countries where there continues to be a shortage of local organizations able to meet donors’ rigorous standards, international partners can play a capacity-building role and/or shelter local actors from some of the more idiosyncratic donor requirements.
• In countries where there is not yet a strong competitive market for local analytic and implementation services, donors can help to seed that market and showcase its utility.
• International partners can help establish linkages for host governments and other local organizations with global expertise and with relevant organizations in the U.S. or other countries.

To contribute to sustainable outcomes at scale and effective localization, it is essential that these external funding and implementation roles be designed and performed with an explicit eye to enhancing, not substituting for, the capacity of organizations with local legitimacy and permanent national presence to occupy center stage and to perform each of these functions over time.

As the opening essay and the subsequent roundtable discussion illustrate, these and other lessons are being learned and shared in real time and at warp speed. I am genuinely excited to know what the conversation will sound like the next time we convene.

Locally led development is a process of transforming the current system to a more equitable one where those closest to an issue decide how it should be addressed and do so with the support of allies. Such a systemic transformation requires the engagement of multiple stakeholders, including communities, community-based and local organizations, local governments, entrepreneurs, funders, and international civil society. Indeed, most local organizations do not want INGOs to disappear. What they seek are equitable, trust-based partnerships where their knowledge, lived experience, and leadership are recognized and supported. Thus far, local actors have been squeezed for resources and forced to follow expert guidance from external actors, often against their better judgment. William Easterly’s “Tyranny of Experts” illustrates how that notion of expertise has not only been a tool of dominance but an often misguided one.

The Minority World (typically called the Global North) needs to develop greater expertise in listening, fixing the deep inequities in the global development system and supporting the wealth of local expertise in the Majority World (often referred to as the Global South). Minority World entities have to support more Majority-World experts to take the lead in all relevant research and policy analysis. Locally led development is about centering the expertise of communities and local organizations, ensuring they have the power and resources to design and implement solutions, and recognizing their ownership over these solutions.

INGOs and Minority-World actors have a role to play in locally led development. They can use their influence and reach within their own countries to amplify the voices and demands of local actors. They can also dispel myths around corruption, lack of trust and capacity of local entities, which are grounded in patterns of colonialism and structural racism. They can protest budget cuts by bilateral agencies, advocate for greater cost recovery for local organizations, well-being funds, and contingency budgets. Minority World actors can also serve as facilitators, connectors, and interpreters; funder rules and guidelines are almost always impossible to decipher, particularly when they are in foreign languages (like English or French).

The report on “The nine roles that Intermediaries can play in international cooperation” by Peace Direct provides a good starting point for Minority World actors to re-examine their roles in a locally led ecosystem in the spirit of solidarity and humility. However, what local organizations seek are not intermediaries but allies. Participants in the April roundtable frequently spoke in terms of the ecosystem that supports locally led and community-led development. USAID and others must focus on investing in ecosystems that center grassroots communities and build outwards.

What is called for is a radical commitment to “local first” in all development activities, including systems thinking and strategy design—not just priorities and implementation. In situations of poor local governance and fragility, as noted in George Ingram’s opening essay, it is actually local actors and their networks who would be best placed to undertake a systems analysis and decide how to address those challenges in the fragile environments where they work. If local actors desire external perspectives and references, they can seek out sub-regional bodies or other Minority-World actors. The role of INGOs in these situations is to support and provide information and capacity strengthening as and when requested, without overshadowing the agency and leadership of local actors.

For communities to thrive, there must be a well-financed and responsive first tier of government able to work in effective partnership with grassroots civil society. Strong local governance is a key pathway to sustainability, and it has largely been ignored and starved for resources and decision-making autonomy.

Civil society thrives and can scale up its impact when it can operate within inclusive and resourced networks from both local and global funders. Are there intermediary funding institutions that can channel and steward larger governmental, philanthropic, or ODA resources to hundreds of community-based organizations in a manner that is responsive to their needs (timing, payment modalities, size of grants)? In many countries, this is largely missing. And yet, there exist, within almost every Majority-World country, local networks of organizations that can play this role with support and resources.

USAID has taken important initial steps in becoming more accessible, with translations, a simplified website, transition grants and increased audit thresholds and per diems. One of the biggest obstacles to realizing locally led development, however, is competitive processes. The challenges of development require a whole-of-society approach that facilitates all able and willing actors to work together, not a system that makes local organizations compete with each other for scarce resources.

Decentralized development in health, education, livelihoods, etc., can be tackled the same way one would plan polio vaccinations: put the money up first, then invite various stakeholders (local government, local civil society, community leaders) around the table at the district level with a good map, align on targets and distribution of activities and means of reporting. Currently, this is done in reverse—competing consortia are formed, almost always led by INGOs or large private contractors who come up with plans with their own money; local organizations have neither the time nor resources to compete in such processes. This situation is further compounded when country offices of international organizations begin to bid in funding for local organizations.

Funders like USAID can play a vital role in transforming the development and humanitarian systems to make them more locally led. They can do this not just by providing more direct, flexible, robust, multi-year funding to local organizations but also by putting in place measures that require all implementing organizations to put communities in the driver’s seat in their programming, from planning to design, implementation, and evaluation. The measures USAID is taking to increase the de-minimis rate for indirect costs to enable cost recovery for local organizations are noteworthy. However, as long as these measures remain optional, international actors may continue to starve local organizations of much-needed operational capital to make their proposals more competitive. Similarly, co-creation can become a highly extractive exercise unless it comes with adequate compensation for the time, knowledge, and leadership of communities and local organizations.

USAID can take the following steps to not just become more locally led in its approach but to strengthen the local ecosystem:

1. Ensure that the policy measures being taken to support local organizations (such as the increase in de-minimis rate for indirect costs) and community leadership (such as co-creating with community members) are implemented by Minority World actors, making funding conditional on performance on these measures.
2. Strengthen and fund local and regional networks – these networks are composed of local organizations and can, therefore, channel funding directly to them in ways that are suitable to their needs. They are more accountable to their membership than any external intermediary and work on the principles of collaboration, not competition.
3. Fund and support new organizational structures based on power sharing and equitable partnerships, and innovative initiatives that strengthen the local ecosystem.
4. Make provisions for pre-award costs to be reimbursed through mechanisms like design phase funding and paid co-creation.
5. Create and maintain spaces for direct interaction with local and community-based organizations to understand how they are experiencing USAID policies and calls for proposals and how the systems can be tailored to their needs.
6. Continue to take steps to ensure language access and total cost recovery for local organizations.
7. Invest in programs that strengthen local government institutions and their capacity to work with communities.

The U.S. development community has been advocating for locally led development under banners such as country ownership, the journey to self-reliance, and localization for more than 15 years. Yet, a significant shift occurred in 2019 when USAID released its first-ever Acquisition and Assistance (A&A) strategy. Before then, localization was more of a policy question: Would USAID actually commit to initiatives like Administrator Raj Shah’s 30% target or would that be undermined and minimized? After the A&A strategy was released, localization became more of an operational question: How would USAID do it? How would USAID change the way it does business, simplifying its requirements to award funding to acquire services and deliver assistance? How would USAID reform its procurement processes and compliance requirements so that local organizations in developing countries would see USAID as an attractive partner?

Then-USAID Administrator Mark Green wrote, “The A&A Strategy is a shift away from traditional approaches that can unduly constrain our staff and partners … we will embrace USAID’s new approach to self-reliance … Diversifying our partner base and integrating locally-led development into how we deliver ….”

Since 2019 and the launch of the New Partnerships Initiative (NPI), less burdensome USAID procurement approaches like co-creation and concept papers have become widespread. Procurements restricted to local organizations occur regularly. USAID has begun to publish key documents in languages other than English. It has set up a website called Work with USAID.gov where local organizations can learn the basics of working with USAID and make themselves more visible to the development community.

USAID’s procurement team has also looked within the Federal Regulations to identify other opportunities for procurement reform. This year,  the White House Office of Management and Budget (OMB) took several steps in the right direction by issuing new Uniform Grants Guidance, affecting USAID and all federal agencies. One key change will allow federal grant recipients to charge up to 15% for their indirect cost recovery. That is a 50% increase over the previous ceiling, recognizing that local organizations have been absorbing the costs of doing business with USAID and that USAID should cover more of those expenses.

This issue is particularly important for expanding USAID’s partnership with local civil society organizations. Indirect cost recovery provides funding that organizations can use to strengthen their institutions, including compensating their leadership, developing proposals, training their staff, and keeping the lights on. Local organizations seeking to work with the U.S. Government for the first time do not have a Federal negotiated indirect cost rate agreement (NICRA) like established implementers and must absorb most of those costs themselves – an expense that can be prohibitive. OMB’s new Uniform Grants Guidance also embraces accepting proposals in languages other than English, lowering another barrier to entry and recognizing that local language skills are often vital for successfully implementing development and humanitarian programs.

In the same vein, a draft, the Locally Led Development and Humanitarian Response Act, would enshrine these procurement reforms and embrace several more by authorizing USAID to:

• Restrict bids to local entities on awards up to $25 million, five times the current ceiling.
• Accept the international accounting standards commonly used outside the U.S. so local entities expert in those practices can still apply.
• Allow USAID to begin working with organizations that have been unable to register in the System for Award Management (SAM), a United States government platform for paying vendors, due to its long waitlist.

At a recent Plan International policy event, USAID’s new Chief Acquisition and Assistance Officer Jami Rodgers outlined his goals for the team of six hundred procurement professionals he leads, as they make the binding day-to-day decisions about how USAID does business. He outlined the goals of the recently launched “A&A Accelerate” initiative. This includes a focus on recruiting and retaining contracting officers and agreement officers, including by investing in the USAID mission Foreign Service Nationals (FSNs), hiring eligible family members, and leadership certification. The recent 250% increase in the number of FSNs with administrative warrants certainly helps in this regard, and their ranks should continue to expand.

Rodgers also mentioned increasing interest in innovative procurement mechanisms like transition awards (an award to a local subrecipient to help it transition to becoming a direct recipient of USAID awards) and said he has encouraged his staff to continue to pilot, test, and scale novel approaches. He pledged to provide risk tolerance that would allow USAID to do business differently in service of the goals of locally led development. Transition Awards are a type of USAID award that delivers program results while also preparing local subrecipients to manage a USAID award in the future.

Yet much remains to be done. In April, the current USAID Administrator Samantha Power testified before Congress that, “It’s also just famously hard to work with USAID. We have a lot of compliance requirements, many of which are imposed by folks up here, but many of which we would embrace ourselves … . We’ve tried to simplify the application process, so it doesn’t crowd out those who don’t have the lawyers, the accountants, you know the armies of people to be able to comply.”

As the recent USAID and OMB procurement reforms become operational, a few more of those barriers will be coming down, making USAID’s shift to direct funding of local entities less burdensome and more impactful.

The localization agenda has helped steer the global conversation on sustainable development in new and helpful directions–centering the critical role of local leadership and expertise and challenging old ways of working informed by colonial-era practices and mindsets. This said, current commitments from global donors to local organizations alone will not be enough to achieve the locally led development paradigm. Local actors still face barriers to accessing funding and recognition. For example, USAID support remains elusive and out of reach for a significant number of local organizations despite their meeting the criteria of local actors. To bring forth the needed investment in developing new mindsets among local and global actors alike, and also to support local actors to gain access to global insights and knowledge that will enable them to work in ways that are both locally rooted and globally informed. Intermediaries such as networks can play a valuable role in operationalizing localization agendas. 

Sustainable development happens when the people closest to the developing context drive and own the process. When the people in local communities are exposed to what’s working and what’s been learned in other similar contexts through a network of local actors, progress happens faster. This “locally led, globally informed” approach is ingrained in intermediary organizations such as Teach For All,  a global network of 62 independently led and locally governed civil society organizations- including Enseña por Paraguay – that is guided by a shared purpose, values, and vision, as well as unifying principles and standards that all network partners and our global organization are governed by.

The role of a global network is to accelerate the progress of its locally led partners. Yet this network structure has to date been under-appreciated by USAID and other bilateral and multilateral organizations as a potential intermediary to both accelerate locally led development and provide operational support. For example, through networks local organizations can access coaching and guidance to bid competitively for bilateral and multilateral partnerships. Enlisting the support of a global network intermediary could help USAID move the needle towards their 25% local funding target by accessing local partners with built-in support from global counterparts. Additionally, local partners within networks could have the benefit of accessing funding and partnerships they wouldn’t otherwise have the capacity to approach or implement alone. 

In some instances, local partners who participate voluntarily in order to advance their own local interests have faced penalties for being connected to a global network. This dynamic has raised the question of who defines localization. Even within the current discourse and despite well-intentioned efforts, it is too often Global North actors who set the localization priorities and approaches, while the voices of what local partners want and need are left unheard. Here again, networks are a way to enlist local partners and amplify their voices across contexts and towards a shared orientation of collective learning and impact towards our broader localization goals. 

Networks are an untapped resource that could help shape a new path forward and help bridge the gap from discourse and policy to implementation and action.

The Network for Empowered Aid Response (NEAR) defines localization as a transformative process of changing the way support to communities is designed, funded, and delivered, where local response systems have the agency and resources they require to support communities before, during, and after crises. This approach not only strengthens the efficacy and sustainability of aid but also challenges existing power dynamics within the aid system by placing local response systems at the heart of community support. Local actors and communities must be at the forefront of driving, designing, and delivering aid, given their deep understanding of the complexities and needs within their communities.

International actors have a role to play, especially in response to increasing needs and more complex crises. To find their new role within the system, they must actively shift power to local organizations and be rooted in the values of solidarity, complementarity, trust, and equity. In practice, this would mean not only supporting but actively facilitating and centering the work of local actors and communities, strengthening their existing efforts without overshadowing their leadership.

There is concern, though, about the instrumentalization of the localization agenda by some international actors as the agenda gains greater political visibility within the global development sector. For example, there have been instances where INGOs nationalize their country offices or decentralize power from headquarters to country offices, conflating this with localization. Such actions can not only stall but even undermine the more ambitious objectives of localization—not to mention negatively impact the agency of communities and the role of local and national civil society. While the continuous growth of some international intermediaries is antithetical to localization, it is noteworthy that other INGOs are beginning to explore different business models. One example is ADD International, an INGO that is successfully shifting away from a traditional INGO structure with a UK-based head office and country offices, establishing a new global structure and exiting from existing programs within five years.

The challenges laid out above underscore the importance of establishing an agreed-upon definition of localization and of local actors, supported by local actors themselves. Definitions are indeed challenging; however, extensive work on the definition of local actor has already been done, paving a way for international actors to stand in solidarity and utilize a robust definition that has broad-based support among local civil society. For example, NEAR’s membership has defined non-state local organizations as those that are “present in locations before, during, and after a crisis; accountable to local laws; accountable to communities where they work; led by local nationals, and not internationally affiliated in terms of branding, governance, or financing (that results from that affiliation)”. The Inter-Agency Standing Committee also has a widely endorsed definition of local actors, utilized by a number of donors.

Another concern is that localization has stalled in humanitarian contexts. Both of USAID’s “Localization Progress Report” show that USAID funding to local actors for humanitarian assistance sits at approximately 1%, compared to the FY23 overall average of 9.6% of agency obligations. This figure is mirrored in the wider global humanitarian system, where only 1.2% of funding went to local actors in 2022. That same year, funding to international multilateral actors increased by 47%.

While international actors struggle to meet their localization targets, particularly in humanitarian contexts, local actors are creating ways to advance localization within even the most challenging environments. The Local Intermediary Actor Network (LIA), for example, is committed to increasing funding accessed by smaller local and grassroots organizations. Another example is NEAR’s Change Fund, a global humanitarian response fund that is locally led, from its governance to its funding decisions. In some cases, philanthropic organizations—due to their higher degree of flexibility in funding—have played a key role in supporting new initiatives to get off the ground. USAID and other donors should leverage the collaboration and learning potential presented by the “Donor Statement on Locally Led Development,” which includes both government and philanthropic signatories.

Recommendations

Donors such as USAID play a vital role in creating policies and guidance that push international intermediaries to rethink their business models, act as equitable partners, and channel higher-quality funding to local actors. Donors can also require international actors, including U.N. agencies, to provide justification when not working with local actors, as well as exit strategies that were once common but increasingly a thing of the past. These changes, both incremental and cultural, push the needle toward local actors being in control of priority setting, design, and execution.

USAID should also:

1. Incentivize and prioritize international intermediaries that are adopting new business models, shifting from models centered on their own continuous financial growth to models that are based on solidarity with local actors.
2. Listen to local actors and measure progress on localization based on how local actors define progress themselves.
3. Sustain and scale localization efforts in humanitarian contexts, where solidarity is needed most.
4. Support emerging and transformational locally led financing models to play a role in creating the system of solidarity of the future.

Like the debate around renewable energy in the U.S., the debate around localization feels removed from reality.

In terms of energy, people joust about coal, renewables, and fracking, but the energy marketplace is already moving to its own rhythm toward pragmatic energy investments. For example, more than 80% of new electric generating capacity in the U.S. this year will be solar and battery storage investments. 

Similarly, few people contest any longer the reality around localization in the development sector, and localization themes already dictate decision-making by funders and INGO implementers. The INGO development landscape “operating system” is heavily weighted toward local ownership, solutions, and implementation.

Yet, the binary of the localization conversation persists, and it’s a risk. Are you local? International? Both? One, but trying to pretend to be the other? The goal should be a healthy ecosystem that advances development, the Sustainable Development Goals (SDGs), rights, progress, universal health coverage (UHC), and more. (Ruth Berg’s Friday Notes from December of 2023 captures the risk of the binary nicely.)

Instead of local versus international, it is the networked, transnational development model that appeals to an organization like mine, Population Services International (PSI). Like many INGOs, we see the value in local leadership and local context expertise, and we see the primacy of individual health consumer voices in the conceptualization and design of our interventions. National governments play a critical role in directing the flow of donor resources and coordinating civil society interventions—in our case of the health sector—to drive progress on health indicators and system resilience. Our role as an INGO is constantly evolving and adapting as local capacities strengthen and different actors become better positioned for implementation.

But just as local or national context specialists and implementers become more important, the need for transnational connection and learning grows even stronger. International implementers have decades of experience with large institutional funders and their compliance loads (e.g., USAID, the Global Fund); INGOs have developed purpose-built capabilities for resource mobilization from institutions and individuals that meet an obvious need in a sector where access to funding is getting more challenging, not less.

Funders looking for scalable solutions to transnational health and development challenges often insist on transnational implementing partners. This preference arises from a desire to try a similar approach in multiple settings, achieve economies of scale in implementation, and to capture wider learnings faster. 

PSI has observed a growing number of USAID awards that require INGOs to help to nurture and grow local implementers to eventually assume a “prime” role during the latter stages of an award. In some cases this has involved creating a local entity that can mature quickly or working with existing local entities to advance their institutional development. PSI has prioritized the institutional development of its own implementing infrastructure. This includes establishing structured governance processes at the country level, building networks for independent board directors who will become future governors of independent institutions, solidifying risk management and internal audit cultures within local entities, and partnering in these efforts once parts of PSI have been spun off to become independent.

In the last decades, we have spun off more than a dozen such entities, in our own institutional development journey. Examples include the Society for Family Health (Nigeria), Population Solutions for Health (Zimbabwe), and Family Health Solutions (Malawi).  These entities have established themselves as national civil society implementers providing value to their host governments, funders, and health consumers. Whether they choose to work with us on future opportunities is a matter of sovereign decision-making. But we value sustaining bonds of connection with these entities, as they share our strategic approach and engage in parallel problem-solving to PSI.

How can USAID and other funders continue to foster the development of this ecosystem of health implementers, including local, national, and international entities from both the Global North and the Global South? Much work has already been done in this regard. Key elements to ensure continued progress include:

• Transparency of dialogue and discussion with partners (to the extent permitted by procurement and acquisition restrictions) by USAID missions, regarding what is possible and by when as countries continue to take ownership of their development journeys. The fact that INGOs or local partners may be interested parties does not mean they don’t have valid points of view to share about the unintended effects of local or international procurement mandates. As U.S. Global AIDS Coordinator John Nkengasong often says, localization is not the objective; ending the HIV epidemic is the objective. Respectful dialogue about tactics versus strategies is often a missing part of the wider conversation with USAID.
• More resources for the Office of Acquisitions and Assistance (OAA) and more contracting and agreement officers overall across the agency are vital. Because more partners and more local partners mean more and smaller awards. The personnel needed to speed up this process are often lacking.
• The agency’s decision to increase the de minimus indirect cost recovery level from 10% to 15% of an award is very important and should unlock easier participation by local or national entities that do not have the track record to have justified a NICRA (negotiated indirect cost rate agreement). The lower level was too much of a disincentive to established local players whose cost structure and ability to deliver value were not meaningfully captured by a 10% cap. No one should fall for the fallacy that local implementation is or should be cheaper implementation, because it is not.

George Ingram’s opening essay uses the 2005 “Paris Declaration on Aid Effectiveness” as its opening framing. We would argue that the Declaration, certainly a milestone when it was released almost twenty years ago, is no longer the most appropriate framework for assessing development effectiveness.

Since the “racial reckoning” that emerged in 2020, the international development sector has witnessed arguably the most profound challenge to its legitimacy in its history, with calls to decolonize donor and INGO practice and shift power to local organizations and leadership. Through this lens, the “Paris Declaration,” with its five equally weighted principles, looks outdated.

In global consultations Peace Direct has organized over the years, local actors around the world have articulated time and time again that local ownership is both the process and the destination. It is not simply a means to an end. This is the case even if it is less effective, at least in the short-to-medium term. This may seem counterintuitive to development professionals who wax lyrical about the virtues and importance of aid effectiveness, but let’s pause for a moment and consider the following:

• Are local organizations allowed to make mistakes as they navigate the complex contexts they operate in and gain experience in aspects of work that they have not had the opportunity to lead before? Mistakes are a rich source of learning, and yet local organizations are punished for making them because to do so makes them less effective implementers in the eyes of donors.
• Should local organizations in all areas be expected to compete equally as effectively with infinitely better-resourced INGOs despite decades of under-investment, prejudice, and patronizing behavior by donors and policymakers?

There has never been a level playing field, and there still isn’t one, so let’s not assume that local organizations can score goals each and every time the ball is passed to them. To be clear, local leadership does lead to better outcomes for communities, but one cannot assume that this will always happen quickly. This is why discussions around aid effectiveness should be reframed to consider issues of power, equity, dignity, and agency, which are aspects absent in most global frameworks. Inserting these dimensions reinforces why local ownership is so important in the debate around aid effectiveness.

If local ownership is both the journey and destination, it then becomes abundantly clear why definitions of local matter so much. Ask a local organization based in the Global South whether a country office of an INGO is genuinely local, and they’ll typically tell you no, in no uncertain terms. They will tell you the same for any of the other contortions that Global-North actors are performing to persuade themselves that there is a definition of local that applies to them. It is important for INGOs to accept the role of external actor.

What has been encouraging throughout Peace Direct’s consultations at the global, regional, national, and local levels over the past few years with local actors is that INGOs, donors, and other intermediary organizations do have important roles to play in rebuilding a new system of international cooperation. The quicker INGOs, bilateral donors, and other intermediary organizations can embrace their new roles and give space to local and community-based organizations, the more likely a reimagined system can begin to take shape.

So, what do these roles look like if they are not the traditional implementer, technical expert, funder, or grant manager? In early 2023, Peace Direct, an organization that has no country offices, employs no overseas staff, and does not implement projects directly, published a report outlining “The Nine Roles that Intermediaries Can Play in International Cooperation.”  The report highlights tangible, important roles for INGOs to play: interpreter, knowledge broker, trainer, convenor, connector, advocate, watchdog, critical friend and sidekick. Each one of these roles offers enormous potential to support locally led development in ways that are respectful and appropriate for this moment of transition, moving from an old paradigm into a new one.

It is important to note, however, that some of these roles should be temporary. They are designed to plug holes in a system that does not work as it should. In the effort to find relevance in a system in which Northern organizations have been dominant for so long, let’s not rush headfirst into a new set of roles that entrench positions of power and privilege. Ultimately, any new roles for intermediaries will not sustain the sector at the same size as it is now, and nor should they. The international role should diminish over time. That’s a measure of success in this new important reality.

In reimagining a new system, new structures, and operating dynamics should not come from the existing ways of doing. They must come from collaboration with the communities the locally led agenda seeks to center. A reimagined system of international cooperation should be mutually beneficial and uphold the value and dignity of local and community-based organizations in the Global South. It should address conscious and unconscious power dynamics, overcome the negative perceptions between local organizations and donors, and move away from extractive practices and toward more collaborative approaches. This is the message we heard loud and clear from a recent global consultation with activists and local actors from the Global South on how partnerships should look between the Global North and the Global South. The findings from that consultation can be found in the report “Transforming partnerships in international cooperation.”

Most importantly, the four most commonly cited values that emerged from the consultation that should underpin the new system of international cooperation are trust, humility, respect, and mutuality/reciprocity. These might sound simple, but based on existing practice, they appear fiendishly difficult to embody. This is perhaps the most damning critique of the international development sector to date; that the values considered commonsense in how we treat our fellow human beings are not how Global South actors experience Global North professionals. We can and must do better.

As international development NGOs seek to adapt their expertise, experience, and leadership to support localization, they might find value in seeing themselves as a version of a “backbone organization,” a typology that has emerged from the collective impact movement in the U.S.

Collective impact is an approach that brings a diverse array of stakeholders together in collaborative partnerships focused on making social progress, often across a whole system, in a defined geographic place. A good backbone organization helps build and deepen the “civic infrastructure” that is key to successful collective impact, enabling expertise, relationships, resources, goal setting, data collection and analysis, and more. Backbones do not directly execute or manage programmatic interventions but instead enable the local changemakers who are doing the work by providing a variety of expertise, resources, and training.

Backbone organizations at the national level generally support a network of local place-based partners to succeed: StriveTogether (where I serve on the board of directors), for example, serves a network of roughly 70 partnerships in communities across the U.S. The activities of a national backbone mirror many of the competencies and skills that INGOs have developed over time. While the analogy is not a perfect one, one could imagine an INGO developing a core strategy that is focused on serving and enabling a range of locally led organizations in the Global South, using lessons learned from the approach and mindset used by backbone entities in the U.S.

What are some of the key responsibilities of a backbone organization that could help define the core elements of a modern INGO in the age of localization?

Help local changemakers have a clear purpose and vision, and build the capacity and organizational strength to pull it off.

A backbone in the collective impact model offers tools and training designed to help its local place-based partners maximize their impact, taking advantage of proven methods to strengthen organizational development and ensure an effective purpose, strategy, and execution.

StriveTogether, for example, has developed a theory of action that lays out the pillars of success for its partnerships mapped across a continuum of stages, so a local partner has the basis for building its strategy and can measure its own growth. StriveTogether also facilitates peer exchange and relationships among all the partnerships in its network, providing the basis for shared learning, support, and leadership.

It has also created a training hub that offers a wide range of courses and trainings designed to help the staff and leadership of its local place-based partnerships grow in effectiveness and leadership. It also provides crucial and trusted support as organizations experience leadership transition, changes in resources, and other challenges.

Help set up and enable the effective collection and use of data.

Locally led partners often find it challenging to access, collect, manage, and make the most effective use of data. Backbones entities can leverage economies of scale to access investments in data infrastructure, collection, and analysis, bringing specialized expertise and offering training, experience, and infrastructure to their local partners. From technical data-sharing agreements, to physical infrastructure, to staff expertise to maximize the use of evidence and data in driving results, national backbones are the nexus for a wide range of services specific to the needs of the organizations in their networks.

Help build sustainable leaders, organizations, and interventions.

Backbone organizations help the partners and organizations in their network strengthen their long-term viability. In an era of localization, this might mean managing investments that require mechanisms at a scale that would be difficult for a local partner to do. It could also mean enabling a collective push for policy changes that the members of its network are prioritizing. A backbone is well-placed to help a network of local partners develop a shared policy agenda and collective strategy, and help that network sustain their efforts and facilitate the relationships necessary to make it a reality.

INGOs that follow best practices currently root their work in local expertise and knowledge, utilizing local people to run their projects. Many of them already perform various elements of what a national backbone organization does. Yet they are still often in the primary role of receiving the funds, developing the interventions, running the programs, and being accountable for the results. Adopting a backbone mindset means that INGOs would shift to see themselves as enablers of local organizations that would be the ones leading, owning, and doing that work.

Rather than create the program or system, ensure its effectiveness, and—once established—hand it off to local civil society or government, an INGO with a backbone mindset would see their role as bringing and building the capacity of local actors, who from the start would own and direct the programmatic interventions. Their currency and value proposition would lie in accompaniment, building the expertise and impact of local actors, facilitating a network that collectively engages on shared priorities and policy imperatives, and elevating that network’s shared purpose to new audiences. Many INGOs already do much of this: the change would be to take themselves fully out of the driver’s seat.

There is a role for international expertise and intermediary organizations to facilitate global development. But that role has shifted since the pandemic, which shut down international travel and forced organizations to reimagine their operations. Moreover, the murder of George Floyd in May 2020 sparked a global reevaluation of organizational structures and systems to promote inclusivity and equity. As a result of these two dramatic societal shifts that intensified calls for the decolonization of development, international assistance organizations have been forced to not only make statements about more inclusive and equitable development but also walk the talk internally in their operations.

During my 26 years as a Foreign Service officer at USAID, including as counselor when I was designated to lead the localization efforts on behalf of the administrator under the Obama administration, I saw progress. But I am struck by today’s unparalleled focus on locally led development across the international assistance community. Under Administrator Raj Shah, a target of 30% was set for local organizations to receive direct USAID funding. Under Administrator Mark Green, the journey to self-reliance was the mantra with each USAID Mission developing country roadmaps in partnership with host countries. Under Samantha Power’s administration of USAID, locally led development builds on previous efforts and is augmented by the upheaval over the past four years that has accelerated a questioning of the role of international expertise and intermediary organizations. Although targets have been set for 25% of funding to be directed to local partners and 50% of programming to place local communities in the lead, the global development landscape has changed dramatically and requires an enhanced approach to how international organizations approach the use of international expertise. A target such as 50% is no longer acceptable. Rather, the goal of 100% for local engagement should be the new norm. This awakening not only affects bilateral and multilateral donors but also philanthropy and corporate donors.  

International development is at an inflection point, demanding more be done by global donors who control resources to improve global human development. As Administrator Power recently testified (at minutes 37:40-38:25), “We basically have programmatic dollars that have gone up 68% over recent years and operational expenses that have gone up 27%. So even with you (Congress) protecting our operational expenses, we’re still seeing a 3% cut in FY 24 … But that’s a big issue as we seek, again, to invest the staff time in working with local organizations and smaller organizations.”³The administrator went on to highlight the importance of growing USAID’s contracting officer workforce and empowering local staff, but there will never be enough USAID staff to partner with a larger percentage of local organizations, which is exactly the reason international intermediaries are needed.  

In 1991, following the Haitian coup d’état that deposed President Aristide, I, an inexperienced 25-year-old Presidential Management Fellow, was sent by USAID to run an office in Haiti. I quickly learned that the local Foreign Service National (FSN) staff and partners were the true knowledge centers, not Washington and surely not me. Over the years, I saw USAID make changes to ensure FSNs were at the table and local voices were consulted on everything from strategy to program implementation. I was heartened under the Obama Administration that this was elevated as a priority, which continued during both the Trump and Biden administrations. But given security access and unconscious bias, local staff and partners were and still continue to be prevented from being treated as equals in USAID.

There should be no debate about whether international expertise and organizations are needed, but there should be great debate about how they engage with local organizations.  The organization I led from 2019 to 2024, the International Youth Foundation (IYF), was founded with localization at its core, as demonstrated by its policy of not placing expats overseas unless required by the donor.

However, like other international development organizations, IYF had a large headquarters based in the U.S. with American executive and senior leadership teams responsible for the management and expertise delivered in countries across the globe in partnership with local actors. With the onset of the pandemic and global protests in 2020, IYF restructured its operations to reduce the size of its U.S. operations and shift roles to its local offices to directly deliver technical and operational support to local partners. This flipped the role of international expertise to one of supporting local teams as they directly strengthened local systems and built capacity, including financial, administrative, measurement, and evaluation, along with a host of technical areas led by local program teams. As a result, IYF’s executive and senior leadership teams evolved from being wholly American based in the Washington D.C. bubble to a diverse and inclusive team with representatives across the world. Moreover, the global team consisting primarily of Americans now plays a very different role than previously by supporting rather than leading local teams.

This is but one model of how an INGO can play an intermediary role in supporting locally led development. There are many more across the international development community. I would urge USAID to create an incentive for the sharing of case studies that can then inform USAID’s approach.

Many international organizations are on this journey of creating more equitable and inclusive models, which are critical to meeting the moment of a dramatically changed development landscape. International expertise will continue to be needed to play a supporting role to local organizations and actors. As much as USAID and other large bilateral donors and large philanthropies would like to increase direct engagement with local organizations, it requires staff. It is much easier for intermediary organizations that have a diverse funding pool to work in partnership with local actors, including government, private, and civil society, to co-design and implement initiatives. I hope people stop asking if there is a role for international expertise and start focusing on how it can be done for more inclusive and equitable development where local actors are in charge of their destiny.

At the heart of locally led development and humanitarian action is the fundamental question: What, exactly, is local? Is it having local leadership, local boards, local registration, local affiliation, or all the above? These issues consume many debates within the advocacy community.

Ironically, all these questions exclude the most local of all entities: community-based organizations (CBOs). These are the actors we should be centering. They are as local as you can get.

While there is no official data for assistance flows to sub-national organizations, it’s safe to say that very little aid reaches CBOs, which are, by definition, created and run by people from and in the community they serve. Many are not officially registered units, nor do they have organizational bank accounts or boards of directors, rendering them invisible to the locally led agenda. Most often, a visionary leader represents the entity, but that does not mean they are opaque, undemocratic, or unaccountable.

In every country to which I have traveled over three decades in the international development sector, there are virtually always local initiatives run by women at the village level. Some, like the Mata Masu Dubara networks of Niger, are highly organized networks with transparent governance systems. But most often, they are simply a motivated group of women who decided to take matters into their own hands and uplift their communities.

These micro-sized CBOs can have macro-sized impacts. One example of this type of group is the Village Savings and Loans Association (VSLA). These are far more than the typical savings group. VSLAs in over 77 countries have launched women into politics, taken on COVID-19 surveillance and education, reduced gender-based violence in households, and sent generations of children to school—all without an outside financial investment. Small impact? Multiply this by more than 800,000 VSLA groups worldwide.

It is rare that a CBO will be able to access anyone at USAID, let alone complete an application or meet compliance requirements. So, how to get funds to these highly impactful informal actors?

One answer is through a process called accompaniment in which intermediaries, which take many forms, walk alongside CBOs and provide advice when asked, capacity when invited, and small grants or fixed obligation awards exactly when and how the CBO needs them. Sometimes, this takes the form of buying a group a vehicle, paying for event space and catering, purchasing building supplies for the community, or paying for a trainer. It is really not that complicated. But it does require intermediaries to be in close contact over a long period of time with CBOs and their communities, much like foundation program officers track their grantees over time. Some international organizations have been doing this effectively for decades.

This approach delivers transparency and accountability to taxpayers and lawmakers. The intermediary organization is responsible for justifying and documenting each and every disbursement of funds or purchases, as every single partner to USAID does already.

A year after the Indian Ocean tsunami in 2004, I traveled to rural Sri Lanka and met an extraordinary group of women who named themselves the Tsunami Women’s Network. This group of women banded together and pooled what little they had to start helping other women in the community recover from the physical and emotional devastation.

As I wrote in my book, “Teach a Woman to Fish,” one of the women in the group shared with me:

 “All these charity groups came and then they withdrew. They did not have a long-term plan or program. Asha (name changed) suggested to us that a women’s savings society wasn’t the end of the journey, that we have to go further. At the initial stages she visited us several times, and she told us about how they organized themselves in [her village, location removed]. Asha pointed out the value of organizing and getting together. She also invited us to go to [her village]; that gave us an insight as to how we could organize ourselves. We started with the savings scheme, and now we have four divisions of savings groups. We got ourselves all together and formed the Tsunami Women’s Network. … It was a new era for us. Now we can go anywhere, talk to anybody, and ask any question we want. We are powerful now.”⁴

Another of the members of the network scaled up this power for broader impact. Aruna’s (name changed) village had no water to drink. So instead of doing nothing, she organized a strong advocacy campaign. As she told the story: “I said to the local politician, ‘You provide the water, we’ll provide the labor.’ The village got the trenches ready, laid the pipes, and then told the guy, ‘Now turn on our water.’  The politician was so shocked, he went running and did it right then.”⁵

Local groups of women acting together. This is where the magic is happening. Let’s get as local as we can and help these powerful community change agents get things done.

George Ingram’s opening essay notes that the “2005 Paris Declaration on Aid Effectiveness” memorialized donor commitment to an effective, sustainable sector by adopting locally led approaches. Since then, donors have set increasingly specific targets for both the direct funding of local organizations and the integration of local leadership into the framing, design, implementation, evaluation, and accountability of development interventions.

As a Humentum report noted earlier this year, donor governments have deepened their fidelity to localization through the 2016 Grand Bargain localization commitments, the partnership principles of the 2030 Agenda for Sustainable Development, the Local SDG Platform, the Core Humanitarian Standard on Quality and Accountability, the Charter for Change, and the 2022 Donor Statement on Supporting Locally Led Development endorsed by 21 donor countries and subsequently by 26 private foundations. While divergent in their definitions of what constitutes local, these mechanisms reflect a general appreciation that donors and other stakeholders should be “recognising and enabling local actors’ agency in: framing; design; delivery, including control over resources; and accountability, in given local and operating contexts” where they work.

Given this nearly two-decade push for locally led approaches, some have expressed exasperation and disillusionment with the sheer dearth of funders, including USAID, who have yet to achieve these targets. They ask, “Why aren’t we there yet, and is it even possible?”

It is possible, and necessary. Increasingly, global development professionals view the sector as an interrelated and interdependent ecosystem. It is an ecosystem in which USAID and other donors, INGOs, and local organizations, including civil society organizations (CSOs) and national nongovernmental organizations (NNGOs), are highly interdependent for their institutional health and overall impact.

Humentum’s recent report, “Operationalizing Locally-Led Development: Cultivating a Healthy Global Development Ecosystem,” stresses that the current health of this ecosystem, however, is undermined by power imbalances, collective mistrust, funding inefficiencies, and largely transactional partnerships. Indeed, for far too long, donors and international organizations have dictated too many programming elements. With few exceptions, donors have meted out highly restricted, compliance-laden funding that fails to fully cover CSOs’ costs of doing the work. As a result, CSOs and their leaders—those closest to the need—are frequently under-resourced, under-valued, and marginalized by the very sector that depends on their success. All of this, in turn, has reinforced deeply entrenched power imbalances.

There is a growing recognition that for the whole to be healthy, each institutional actor needs adequate resources, organizational autonomy, operational capacity, and relational power to thrive. Adopting a systems-change approach, seen through the lenses of locally led and equity, can channel common values to build and buttress the systems and structure of collective work, determine who does the work and how to work together, identify how that work is funded, and agree to shared accountability structures for how the work is being done.

Since 2021, Humentum’s engagement with around 5,000 professionals from over 100 countries to identify and interrogate the hydraulics of sector transformation uncovered within four key components of organizational operating models strategic steps to cultivate a healthy ecosystem. These include:

1. Institutional architecture: Make change happen through more decentralized, democratized governance and organizational structures, bringing decision-making and resources closer to those who do the work.
2. People and culture: Implement equitable and values-based human resources and compensation policies and practices, taking a principles-based approach to managing people, organizations, and partnerships.
3. Funding and financial systems: Fully fund organizational operating and overhead costs, ending the non-profit starvation cycle, invest in institutional capacity, and create mechanisms for more locally defined, flexible, trust-based funding.
4. Risk and compliance: Design and implement protocols for risk-sharing (rather than risk transfer), mutual accountability, and simplified and harmonized due diligence and compliance requirements.

For a healthy global development sector, the focus must be on “how” locally led and equitable development is operationalized. Truly transformative change to the ecosystem will most readily happen when the sector harnesses the levers of change within individual and collective operational policies, practices, and principles. This can be simultaneously simple and complex because the “how” looks different depending on where you sit in the ecosystem:

• Donors: Donors have a special opportunity and obligation to nurture and sustain the global development ecosystem. Because they control the purse strings, donors’ power can subordinate and stifle the role of international and local actors alike. To enable the sector’s transformation, donors must fund the transformation process. (Re)balancing power requires the financial resources, systems-change tools, and accountability mechanisms necessary to incentivize transformation. Donors should invest their resources in the operational vitality of organizations and then get out of their way. Let them do what they do best without imposing arcane and burdensome compliance requirements: Provide flexible, multiyear funding, full cost recovery (cover overhead expenses), and unrestricted funding. Donors should challenge themselves to implement simplified, flexible procurement processes that facilitate local actor design and leadership. Finally, all donors with locally led targets, such as USAID, should set and mandate reporting on indicators that track progress to local ownership as both a process and an outcome. USAID could increase accessibility to its funding by simplifying procurement mechanisms and compliance requirements that are within its control. For instance, USAID could uniformly apply its policies and practices to U.S.-based and non-U.S. entities alike, mandate reporting on its localization indicator, and include in its funding agreements clear expectations, when and where applicable, for CSO leadership and INGO capacity-building, networking, advocacy, and similar roles.
• International (for-profit and non-profit) organizations: INGOs can make a change when they interrogate their operating structures, hiring, retention, and compensation policies, examine their due diligence requirements of CSO partners, and ensure they are playing a value-add role in the sector by bringing globally-tested approaches, experience, tools, and advocacy for locally led development. INGOs can infuse the values underpinning locally led, equitable development in how they convene, partner, capacity build, and implement programs. By being introspective and transforming their operations, INGOs exercise their power to enable a healthy ecosystem. This work is well underway – with many INGOs in the “messy middle” of the transformation journey.
• Local or national civil Society organizations: CSOs can live their values by reflecting them in their operating policies and practices. They can invest time and resources in peer-to-peer learning opportunities, operational development, and storytelling for greater impact. CSOs are increasingly harnessing the power of the collective through regional and global networks to influence donor policy change, demanding greater deference to their deep experience and expertise.

Localized approaches that shift power, influence, and resources to those affected by development challenges and humanitarian crises produce better and more sustainable results. Save the Children’s localization policy supports this understanding by acting as an ally to local actors, including communities and children themselves, in elevating their voice and leadership to drive locally meaningful change. Historically, Save the Children has emphasized the agency and leadership of children and local actors to drive this change through various initiatives, including child rights governance and community-led development. In response to growing development and humanitarian challenges the world over, and an intensified sector-wide push to advance locally led solutions, Save the Children is reevaluating its engagement with local stakeholders and communities. A long-term transformation is taking place to better fulfill this ambition.

USAID’s efforts to advance locally led development and humanitarian assistance in its programming and procurement represent a significant advancement. While progress is ongoing, concerted efforts have resulted in increased and higher-quality funding going directly to local and national actors. Additionally, the introduction of 14 Locally Led Programs indicators will guide more equitable and meaningful engagement of local actors across USAID’s portfolio. USAID’s efforts to engage with peer donors to influence their adoption of this agenda showcase a significant advancement beyond its own programs. These efforts, and more, have the potential to contribute to a fundamental shift in how the development and humanitarian sector operates, fostering a more complementary ecosystem of actors working together at the international, regional, national, and local levels to effectively respond to the greatest challenges of our times.

Much remains to be done. Globally, local and national actors still struggle to access direct funding despite various pledges and commitments, and in some contexts are being pushed out of their own markets by local affiliates of international organizations they struggle to compete against. Moreover, despite sector-wide efforts to foster more meaningful and equitable partnerships between local, national, and international actors, many of the local actors Save the Children interacts with in many countries report not feeling the results of this transformation at scale. In many contexts, Save the Children staff observe the push for localization resulting in the consolidation of considerable resources and power in the hands of a limited group of large, well-established national entities, limiting the engagement of a diverse range of local stakeholders and diminishing their ability to meaningfully lead change in the communities they represent.

In order to better ensure the meaningful participation of local actors and to foster a more complementary ecosystem of actors at all levels, donors like USAID can and should leverage programming and procurement practices to incentivize this change at scale. USAID could consider the following actions: 

• The Locally Led Programs indicators are intended to create agency-wide incentives to use partner-led approaches like program co-design and demand-driven capacity strengthening. To maximize the transformational impact of these indicators, USAID should extend these reporting expectations to INGO partners for their engagement with local and national actors. 
• USAID is now translating bids into multiple languages and allowing non-English submissions. Simplifying proposal instruments, specifically notices of funding opportunities and requests for proposals, and increasing the use of concept notes and oral submissions must make headway. The current instruments are dense, burdensome, and difficult to navigate for local groups, especially from non-English speaking countries.
•  International actors clearly have important roles to play in localized development and humanitarian sectors. However, many will not grow into these roles without the right incentives. To foster these shifts in roles, USAID could make greater use of existing and new procurement mechanisms that delineate specific roles for international, local, and national partners such as the New Partnerships Initiative, Transition Awards, eligibility restricted solicitations (e.g., “locals only”), and more.  
• When considering how to foster more meaningful and consistent engagement of local actors in USAID processes, it becomes critical to define whose engagement is being sought out. As indicated in Publish What You Fund’s “Metrics Matter II” report, roughly half of the funding reported under USAID’s 25% direct local funding target is going to truly indigenous entities originating from the communities they serve. To ensure that a diverse range of truly local voices are engaged in USAID programming and procurement, USAID could apply the IASC (Inter-agency Standing Committee) definition of local and national non-state actor in reporting against its 25% direct funding target, in line with its status as a signatory to the Grand Bargain.  
• Fostering meaningful engagement with local actors takes time and visibility. Tools like the USAID Business Forecast offer invaluable insights into USAID’s programming priorities in advance. However, in the absence of a Request for Information, draft Request for Applications, and other forms of prior notice, development partners often lack insight into the detailed programmatic priorities of USAID Missions. Without these insights, organizations may struggle to identify the right partners to engage meaningfully in the early stages of program design. USAID could provide more details on their programmatic priorities in the USAID Business Forecast to better support the early engagement of local partners in true co-design.

USAID has made important progress on commitments to be more locally led and to shift more and better-quality funding to local actors. To enhance locally led development and humanitarian solutions, consistent and scalable implementation of these commitments will be essential.