The law that created USAID, America’s signature foreign assistance agency, was passed in 1961 during the height of the Cold War. Although it affirmed the US commitment to eliminating hunger, poverty, and disease, it was quickly forced to service the greatest US foreign policy priority at the time: defeating communism. That’s how notorious dictators, including Chile’s Augusto Pinochet and Zaire’s Mobutu Sese Seko, reaped such large amounts of American assistance. Aid to leaders like that can do more harm than good. Disproportionate hunger, poverty, and disease in those two countries continued — and continues to this day.
Since that false start, USAID has made vast improvements in the way aid is delivered. But it still has a long way to go. Programs aimed at reducing poverty overseas are still far too focused on the needs in Washington, D.C., than the impoverished countries that the aid is supposed to help.
For example, emergency food aid to the starving is still held hostage to a political alliance between farmers in Republican states and shippers in Democratic states that forces USAID to buy American wheat and corn and ship it on US-flagged vessels. The result is scandalously slow assistance, at far too high a cost. An estimated 4 million more hungry people could be fed if USAID were given more flexibility about where it could source the food. But most important, the current system can create more hunger in the long run. Local farmers go out of business when free US food is dumped into the market.
Thankfully, there’s a growing recognition that foreign aid works best when it effectively leverages local people and institutions overseas, especially now that local governance is improving around the world. In 2011, USAID administrator Rajiv Shah unveiled a plan called “USAID Forward” that aimed to direct 30 percent of the agency’s funding through reputable indigenous organizations and institutions overseas rather than to relatively expensive US-based contractors.
But he failed to reach that goal. In 2013, only 14.3 percent of USAID funds were awarded to local institutions. Today, that number stands at about 17 percent, according to Paul O’Brien, vice president for policy and campaigns of Oxfam America. “They don’t debate anymore that they have a real challenge in making sure local ownership is at the center of everything they do,” he said.
To be fair, USAID faces a host of obstacles that greatly limit its ability to reform, including the political clout of US contractors, congressional earmarks that favor pet projects, and a dizzying array of directives and bureaucratic mandates. But the reform agenda should press forward. Like it or not, the future of foreign aid lies in creating lasting partnerships with people in developing countries, not bribing them to do our bidding, or sending them our unwanted stuff. Congress can help create those partnerships by removing politically motivated mandates that restrain the flexibility of USAID, and increasing transparency to make the system more accountable to the people it is intended to serve.