Taking an Oath to Improve Aid

Mar 18, 2010 | Updated May 25, 2011

There's a fundamental irony in U.S. development policy: we give too little, and what we give, we give inefficiently. Currently, the magnitude of U.S. taxpayer dollars is not translating into corresponding levels of goodwill around the world. While President Obama plans to invest heavily in diplomacy and development to improve the lot of the world's poor and attain a higher level of global security, U.S. programs are simply not up to the task.

That could change. Today, Dr. Rajiv Shah was sworn in as the 16th Administrator of the U.S. Agency for International Development (USAID). Dr. Shah was appointed after a glaring 300-day gap in which there was no head of the organization, and now that he's in place, the question is how to support him in turning this important agency around to meet global health, prosperity and security goals.

Shah faces big challenges. Founded in 1961, USAID has had its successes but has flailed ineffectually as its power has steadily eroded over the last two decades. U.S. commitment to development assistance lags behind that of other industrialized nations; in 2008, we invested about $26 billion - less than 1% of our annual budget. The next USAID administrator lacks budgetary authority for most development programs (that's been subsumed by the State Department) and inherits an organization with mediocre metrics and an overburdened bureaucracy, even by government standards. It's an organization traditionally beset by special interests and contractors with financial - not developmental - aims, jockeying for position.

A quick review of the poorest countries on the planet now shows that, over the last few decades, many have grown poorer in spite of our aid - or, some would argue, because of it. So what's to be done to restore effectiveness?

Topping the list is the need to dismantle the current system of implementation, which largely relies on a group of contractors in the Washington area pejoratively known as "the beltway bandits". Years ago, USAID chose to outsource its work to third-party contractors. In fairness, some do good work, but the cost structure for implementation is seriously handicapped by endless expenditures that have no bearing on getting the job done. USAID must look outside the beltway to see what's really working.

Several years ago, I hired an African who had quit a $35 million USAID-funded project upon discovering that roughly 10% of funds reached intended recipients. The remainder covered overheads in Washington and Africa, business-class plane tickets, consultancies, evaluations, hotels, seminars, and a raft of other spoils which had nothing to do with achieving results. Today he heads a private-donor-financed project that he reckons does more good with far less money. Given that the U.S. spends a smaller percentage of its GDP on development assistance than any other wealthy country, we should at least aim to get the best bang for our buck.

Dr. Shah should also focus on cycling out ideology-driven aid. Already overtaxed, our development assistance budgets have been guided for years, especially during the previous administration, by ideological priorities rather than science. When proven preventatives against the spread of AIDS were marginalized in favor of unrealistic abstention programs, the incidence of AIDS only increased. It makes no sense to work to cure AIDS while condemning a generation to contracting it.

Dr. Shah can also make a difference by discontinuing the practice of creating aid "silos". While spending on AIDS skyrocketed under the Bush administration, funding for maternal and child health and neglected tropical diseases stagnated, with fatal results. Instead of supporting a holistic approach to global health and international development, funding has become dangerously concentrated.

Dr. Shah knows that economic development should be the centerpiece of USAID policy; it enables countries to grow and take responsibility for their own improvement. Yet under USAID, development programs have been almost entirely lacking in vision and execution. Across Africa, the word in the halls of power is that China is helping to build infrastructure, opening new businesses and creating trade, while the US is good for keeping local consultants employed. It's ironic that China should outstrip the U.S. in capital creation and prosperity-building programs.

Thankfully, both the White House and State Department have major evaluations underway of our development policies. However, it's hard to imagine that inside the beltway, the approaches espoused will look radically different from what's currently being done. All parties will have to look much farther afield - from the financial successes of the Grameen Bank to the national successes of Rwanda to the development successes of the Millennium Villages Project and other giants in development - to determine what needs to be funded.

The sort of revolution needed in global assistance can't simply be the work of the new USAID Administrator. It will require strong backing from Congress, the Executive Office, and the State Department. It will also require more concern from each of us about how our tax dollars are spent abroad, and a demand for results.

Josh Ruxin
is Assistant Clinical Professor of Public Health at the Mailman School of Public Health at Columbia University and Director of the Access Project in Rwanda.