The Foreign Service Journal, April 2005

receiving MCA funds will implement their “compacts” subject to new or existing foreign assistance rules and regulations codified in the U.S. Federal Acquisition Regulations. Sub-section 609 (b) of the act, which describes the elements contained within the compacts between the MCC and recipient countries, states merely that there will be: “a require- ment that open, fair and competitive procedures are used in a transparent manner in the administration of grants or cooperative agreements or the pro- curement of goods and services for the accomplishment of objectives under the Compact.” The Federal Acquisition Regula- tions, like most U.S. government codes, are much more prescriptive in setting forth the procurement proce- dures to be used in securing technical assistance, training, commodities and other costs associated with program operations. The regulations help ensure that recipients of U.S. govern- ment funds use them wisely, efficient- ly and in a manner consistent with the values of competition, transparency and accountability. Anyone who has worked directly for USAID or as a project imple- menter has horror stories about operating under the FAR. The rules are complex and, given USAID’s decentralized nature, often inter- preted and applied inconsistently across similar situations. Still, it is important to remember that these rules and regulations were not creat- ed in a vacuum but in response to congressional calls for greater accountability for the executive branch’s programmatic foreign poli- cy interventions abroad. Congress has historically carried out these oversight responsibilities with great zeal, serving as a watchdog to ensure that U.S. taxpayer money is allocated and spent wisely. To be sure, it often oversteps its bounds, leaving foreign aid and USAID missions ham- strung with its annual list of assistance earmarks. These earmarks, 274 at last count, are driven more by pork-barrel politics than developmental vision or knowledge of best practices, and dras- tically reduce the levels of flexibility, responsiveness and effectiveness for foreign aid. Implementers are then at a loss to respond to Congress’ inces- sant calls for improving foreign aid’s performance. It is easy to sympathize with the Bush administration’s desire to cir- cumvent Congress’ far-from-perfect oversight of foreign assistance and the FAR’s sometimes onerous proce- dural constraints. This desire is con- sistent with the competitive, some- times testy relationship that has exist- ed between Congress and the execu- tive branch, to varying degrees, since the United States first had a foreign policy. The executive branch has often felt hampered by an over- reaching Congress in its ability to carry out its constitutional mandate of formulating and carrying out U.S. foreign policy. Capitol Hill, for its part, has felt snubbed by an execu- tive branch bent on bypassing its constitutional role of providing over- sight to executive branch activities, whether at home or abroad. At the same time, for many years both branches found great utility in non-projectized assistance, also known as direct budgetary support. Non-projectized assistance went directly into the recipient country’s national treasury, instead of through U.S.-based contractors and grantees, as is done currently under most USAID-funded programs. During the Cold War, this type of assistance was often used as a quid pro quo to secure recipient country govern- ments’ support of higher-order U.S. foreign policy objectives. Even when the recipient governments commit- ted human rights atrocities, siphoned off the funding through corrupt prac- tices or generally failed to use the funds for their intended purpose, the U.S. government considered these deviations a small price to be paid in its war on communism. The Vicissitudes of Non- Projectized Assistance Following the end of the Cold War, however, a combination of fac- tors led to a newfound concern for how U.S. taxpayers’ money was spent abroad. First, both the legislative and executive branches agreed to reduce overall government spending after the federal budget deficits ballooned under the excesses of the Reagan- Bush administrations of the 1980s. Second, without a compelling overall policy rationale — e.g., fighting com- munism — it was much more diffi- cult to justify large outlays for pro- grams without clear, direct benefits to constituents back home, especially during the economic recession of the early 1990s. Third, the first Clinton administration’s early blunders in implementing an ill-defined inter- ventionist policy (e.g., Somalia, Haiti) greatly reduced public support for open-ended engagement abroad, effectively squandering whatever political capital it may have had to revamp U.S. foreign policy. As a result, USAID chose to aban- don non-projectized assistance, mak- ing a few, highly strategic exceptions, such as Egypt and Israel. Simultan- eously, consistent with Vice President Al Gore’s efforts to reinvent govern- ment through the Government Per- formance & Results Act, USAID underwent a series of internal reforms, collectively referred to as “re-engineering.” It is debatable whether these reforms ultimately improved or debilitated USAID as an organization, but what is certain is that they did little to reduce Congress’ mistrust of the agency’s ability to manage taxpayer money effectively and efficiently. Similarly, the multilateral develop- 38 F O R E I G N S E R V I C E J O U R N A L / A P R I L 2 0 0 5