Foreign Assistance: Reform Now for Smart Power

Lael Brainard
Lael Brainard National Economic Advisor - National Economic Council

July 30, 2007

The Bush administration’s nominee for Administrator of the U.S. Agency for International Development and Director of Foreign Assistance at the State Department, Henrietta Fore, received an earful when she appeared before the Senate Foreign Relations Committee recently. Subcommittee Chairman Robert Menendez pointedly noted that the current foreign assistance reform effort is desperately in need of reform itself, and in hearings last month he blasted her predecessor’s efforts: “I am officially putting the Administration on notice that you simply cannot go forward with this process in the non-transparent, top-down way it was handled in the past.”

Indeed, many in Congress and the ranks of USAID view the change in leadership at the State Department as a welcome opportunity to revisit the process put in place by her predecessor, Ambassador Randall Tobias. Asked by Condoleeza Rice to transform the US foreign assistance bureaucracy as part of her overall “transformational diplomacy” effort, Tobias rapidly pushed the creation of an entirely new bureaucracy — the so-called State F bureau — to determine U.S. foreign aid spending in a secretive, top-down, Washington-out process. It brought notable clarity to the budget allocations in a neat 5 by 5 matrix, but came at the expense of alienating just about everybody who cares about foreign assistance. The initial Foreign Assistance Framework omitted any mention of the word “poverty” in its fervor for building “well-governed states,” apparently forgetting that most Americans who live outside the beltway actually care about helping the poor, as evidenced in their generous private giving and volunteer efforts.

It came as no surprise, then, when the administration’s foreign assistance proposals met a chilly reception in the halls of Congress. Key congressional members were outraged to find proposed cuts of $468 million to Development Assistance funding for the long term development of impoverished countries, while political allies received a further boost of $703 million through the Economic Support Fund, which coincidentally provides greater discretion to the Secretary of State. Others were caught off guard at the cuts to relatively meager aid programs to India, which already received only about 8 cents per capita in U.S. aid despite being much poorer and more democratically governed than Egypt, the recipient of about $24 per person in U.S. aid.

It would be an enormous shame to abandon the focus on foreign assistance reform as the administration’s specific proposals come under fire. A quick glance at a diagram of the dozens upon dozens of separate units involved in pursuing the dizzying array of objectives embodied in U.S. foreign assistance directives with overlapping jurisdictions and mandates should convince even the most diehard skeptic we have a problem. Under Secretary Fore’s arrival provides a welcome opportunity to engage with stakeholders and key members of Congress, which must be a full partner in any serious reform effort. When a similar effort was undertaken to unify the military two decades ago, it took several years of congressional debate and involvement to build support for what ultimately became known as the Goldwater-Nickels reforms.

When designed and executed well, foreign assistance is not just soft power but smart power, working to advance our security, our interests, and our values. Successful foreign assistance reform will require vision, patience, and congressional involvement. Instead of the horde of separate offices across the executive branch currently responsible for aid planning and delivery, we should have one integrated agency. Instead of the 50-odd objectives these offices currently pursue, we should have no more than five strategic priorities. The ultimate goal should be to elevate development to equal and independent standing alongside diplomacy and defense in reality not just in rhetoric.

With the upcoming election providing a critical opportunity to reshape how America engages the developing world and to show a more compassionate and cooperative face, foreign assistance reform is simply too important to leave to a little non-permanent bureau in the State Department.

Lael Brainard is Vice President and Founding Director of Brookings Global Economy and Development, co-director of the bipartisan Task Force on Transforming Foreign Assistance for the 21st Century, and editor of Security by Other Means: Foreign Assistance, Global Poverty, and American Leadership