The Foreign Service Journal, June 2006

things work, what incentives and stakes really count, what the obstacles are — takes homework we are not used to doing. In addition, we need to invest not just in better under- standing how things really work in particular countries, but also in serious research on phenomena that lie on the periphery of development but have the potential to undermine or to support it. For example, a growing brain drain is affecting much of Africa and we need to under- stand its mechanisms better. Similarly, the role of remit- tance transfers back to many developing countries (now double the worldwide total of official development aid) has vast untapped potential for local development, yet the phenomenon is not well understood. In short, we should be shifting radically to a smarter, less-is-more approach to aid; to an approach that wrestles almost entirely with institutions and not the delivery of things; that tackles development’s challenges in innova- tive, experimental ways; and that relies more on fostering, catalyzing and supporting institutional change, rather than on doing things directly for the poor. Forces Against Change Unfortunately, however, this shift cannot be made without taking on the combined weight of the political, social and cultural forces in and around the aid bureau- cracy that militate against change. There are at least four different factors in place that tend to keep USAID oper- ating in a business-as-usual mode. 1. Political-cultural forces. The U.S. is one of the most evolved democracies in the world. One result of that is an exponential growth in the formation of highly diverse constituencies. We have a culture that more and more values everyone having a voice; that values the opportuni- ty for everyone’s interests to be mediated and debated. We have also, perhaps as a consequence, a politics and culture that are highly tuned to fad, buzzwords and polit- ical correctness. USAID is notoriously hampered (if not entirely driven) by this political-cultural complex. So while new and refreshing visions may catch the public eye, the foreign aid system itself seems likely to continue to reflect the myriad interests that have created a long checklist of dos and don’ts. Between the lines (and not very well hidden at that) USAID’s mission statement remains: “Something for everyone; all (or most) things for all (or most) people” — crisis response, conflict resolution, stabilization of emerging and transitional countries, food aid, democrati- zation, HIV/AIDS prevention, business development, rural development, etc. — whether or not it excels at any one thing, or whether or not any one thing may be more important than any other for long-term development. Moreover, in the post-9/11 environment, the newly explicit link between aid and national security, and the closer day-to-day ties with the State Department, make hopes for a focus on the new developmental emphases even less likely. As might be expected, the budget reveals the priorities. Of the total American aid budget of $33.4 billion for FY 2004, fully 20 percent was for military assistance, with the rest for economic assistance provided by several govern- ment agencies including USAID ($11.1 billion), the Department of Agriculture ($3.1 billion, mostly for food aid) and the State Department ($4 billion including HIV/AIDS, narcotics control, refugee assistance and anti- terrorism). The lion’s share of economic assistance will continue to go to a small number of countries, largely for carrot-and-stick reasons rather than development selec- tivity: Israel, Egypt and the post-9/11 foci of Iraq, Afghanistan, Pakistan, etc. Of USAID’s FY 04 budget, 27 percent went for “security support.” Economic assis- tance, albeit on a much smaller scale, will continue to go to old targets with little regard for the new emphases. These small sums add up: USAID’s own record shows, for example, an accumulated total of economic assistance up through FY 04 of $1.4 billion in Malawi, $1 billion in Niger, $1.46 billion in Guinea, and $3.4 billion in Haiti. The numbers differ slightly, but the picture is similar for Morocco, Ghana, the Philippines, Panama, Sri Lanka and so on. USAID seems poised to continue to spread itself around rather thinly to all manner of needy countries regardless of the principle of selectivity, or the dangers of continuing dependency. USAID’s “yellow book” (its directory of contracts, grants and cooperative agreements with universities, firms and non-profits) tells the same old story. The Indefinite Quantity Contracts, the grants and other arrangements continue to be made with familiar players, beginning with the venerable Beltway bandits — the for-profit firms whose business is delivering USAID’s packages (DAI, Chemonics, Nathan, Checchi, Abt, and so on). The busi- ness-as-usual theme shows up especially in contract dura- tions. They remain, by and large, just one to five years (and no more than seven), ignoring the deepest lesson of all: F O C U S 32 F O R E I G N S E R V I C E J O U R N A L / J U N E 2 0 0 6