Getting U.S. foreign assistance right

The United States badly needs to get its act together in promoting its national interests and national security objectives. And it badly needs to “rebalance” its statecraft toolkit, so U.S. civilian tools can perform their missions. Currently, too much of the domestic dialogue about our role in the world has focused on near-term security problems–namely, defeating Al Qaeda and stabilizing and reconstructing Iraq and Afghanistan. The result has been a major increase in missions and funding at the Defense Department and a growing reliance on Defense to do the job of diplomats and foreign-assistance providers.

But if we want to focus on the long-term and not what some at Defense call the “long war,” we need to take a closer look at how Washington reforms its civilian capabilities for international engagement. There are three main tools for carrying out our long-term national security strategy–diplomacy, foreign assistance, and the military. Today, partly because of Iraq and Afghanistan, these tools are sharply out of balance, with the military becoming the lead player in advancing U.S. interests and promoting national security. Defense’s rise as the lead institution has come at a cost. Nations around the world now look at the face of U.S. engagement and see a uniform, sending a potentially self-defeating message about our intentions.

Creating a Department of Global Development is a lose-lose proposition. If the new department is too big, it will become unfocused. But if it’s too small, its funding will evaporate.”

Meanwhile, despite significant increases in funding for diplomats and foreign assistance since 9/11, the disorganization of our civilian tools continues to frustrate efforts to balance the U.S. foreign policy toolkit. The State Department has begun to change, reforming its approach to bringing civilian foreign-assistance programs together, but that promising start has been flawed by an initial execution that was too top-down and invisible to the affected stakeholders. So neither our diplomacy nor our foreign-assistance capabilities are adequate enough to lead U.S. international engagement.

As a result, a fierce debate is taking place in Washington about how to strengthen, integrate, and fund the civilian tools that help achieve U.S. goals. One option is to better align our diplomacy and foreign assistance. Another option is to separate foreign assistance from diplomacy by creating a Department of Global Development, a cabinet-level department that would design, plan, and implement all U.S. foreign-assistance programs. Proponents of such a department argue that only a strong, separate cabinet department can put long-term development at the center of the U.S. foreign policy agenda.

Other reasons they assert there’s a need for a Department of Global Development:

• During the past decade, State’s diplomatic establishment has been quietly absorbing the country’s principal development agency, the United States Agency for International Development (USAID), redirecting its programs and funds toward meeting short-term diplomatic needs.
• State cannot define and implement foreign assistance because it lacks the managerial capacity to do so. The diplomatic mission is to “represent, report, and negotiate,” not conduct strategic planning and program management.
• State can’t raise the money. Its managerial weaknesses and overall dysfunctional character ensure that Congress won’t provide it with the funding long-term foreign assistance needs. Without a strong, functional organization, Defense, which plans better for the long term and manages programs more efficiently, will continue to expand its foreign-assistance activities, assuming more and more responsibility for U.S. international engagement overall.

Some of these arguments are miscast and some are mired in the past, not grasping how U.S. foreign assistance has changed during the last decade. In reality, trying to solve the country’s foreign-assistance problems by creating a new cabinet department could prove counterproductive, weakening the structure of the civilian toolkit and leading to a decline in the role of long-term development in U.S. statecraft. Thus, it’s important to reexamine the assumption that Washington’s diplomatic and foreign policy establishment favors short-term, security-oriented programs over a commitment to long-term development.

Overall, U.S. foreign-assistance funding has more than doubled since 9/11. Some might argue that this increase reflects the cost of the wars in Iraq and Afghanistan and not a commitment to long-term development. But while Iraq and Afghanistan remain a costly, frustrating use of assistance funds, they’re not the reasons for the growth in assistance resources. By far the largest spike in foreign-assistance funding has been in three programs that specifically target long-term development objectives–the HIV/AIDS and Malaria initiatives, which aim to control and prevent the spread of infectious diseases, and the Millennium Challenge Corporation (MCC), a program that invests in the long-term social and economic development of countries that meet defined preconditions indicating they’re able to use our assistance effectively. Together, these three programs have accounted for roughly one-quarter of U.S. foreign assistance over the past five years; they reached one-third of total U.S. foreign assistance in the fiscal year 2009 budget request.

Critics argue that these separate, specialized programs are presidential initiatives that overlap with multiple USAID programs designed to address the same issues. This is true. In general, there’s a “diaspora” of programs and institutions in the foreign policy world–a major source of weakness in the civilian toolkit. But the real question is why USAID wasn’t included in the creation of MCC and the HIV/AIDS and malaria initiatives. The answer is that there’s widespread doubt that USAID is able to plan, organize, and implement such long-term initiatives, based on an uneven track record with existing bilateral development assistance programs. But the decision to create new programs is unrelated to whether or not State is biased in favor of the short-term.

In reality, even the foreign-assistance programs State plans and budgets with political and strategic goals in mind constitute a substantial investment in long-term development. This is an important trend that reflects a close relationship between State and USAID, which actually implements the lion’s share of these State-planned programs. The hidden secret of U.S. foreign assistance is that the sharp distinction between USAID (“long-term development”) and State (“short-term politics”) implied by the advocates of a separate department doesn’t exist.

Let me be clear: There’s still a dominant culture at State that views diplomatic tasks as “report, negotiate, represent” and not the management of foreign assistance. But “mission creep” is slowly eroding that culture, placing the diplomatic community in the business of program development and implementation. In the real world of foreign-assistance operations, State recognized long ago that USAID possessed the talent and knowledge to implement assistance programs, especially when it came to those focused on effective governance, economic and market development, and poverty reduction. As a result, there are a number of “development”-oriented assistance programs planned and budgeted, and in some cases, implemented at State, and, in other cases, implemented in cooperation with USAID.

State’s own foreign-assistance portfolio reflects this trend: A significant portion of the assistance programs for the former Soviet Union and Eastern Europe, planned and budgeted through the Office of the Special Coordinator for Assistance Programs in Eurasia, focus on long-term governance, market development, and the development of civil society. Likewise, the Economic Support Fund (ESF) programs in the State budget, which are largely shaped by State’s regional bureaus, provide flexible funding to countries that have a strong or developing relationship with the United States. Most of these funds are actually committed to longer-term political, social, and economic development programs and goals. In fiscal years 2007 and 2008, as well as in the 2009 proposed budget, more than 80 percent of ESF was allocated to long-term investments in governance and economic development, including sizable monies for strategic countries such as Egypt, Pakistan, and Jordan. Most of these programs are also implemented by USAID.

In virtually all of these cases, State offices work closely with USAID to design and implement these programs. This close relationship isn’t always perfect, but it reflects a substantial change from the old days when diplomats and developers didn’t speak. It also has the virtue of linking our national interests to our capacity to focus on long-term economic and social objectives.

Another key test of the payoff from an integrated relationship is in the field. As a recent Senate Foreign Relations Committee minority staff report suggests, USAID field-mission directors and ambassadors report a much closer working relationship between State and USAID where the programs are being implemented. There are field negotiations about how fast funds can move and how flexibly they should be used, but, for the most part, this isn’t a hostile relationship. In some ways, the synergy between diplomacy and development is closer and more successful than the turf struggle in Washington.

The last three secretaries of state (Madeleine Albright, Colin Powell, and Condoleezza Rice) thought the close connection between foreign assistance and diplomacy important enough that they pushed Congress for the necessary money to strengthen both the country’s diplomatic and foreign-assistance capabilities, which substantially increased funding for both. And in 2006, Rice also established the Office of the Director of Foreign Assistance, or “F” in State and USAID parlance, the first institutionalized effort in State’s history to improve strategic planning of U.S. foreign-assistance programs.

Generally, F has been strongly criticized, notably by Washington’s development constituency and diplomatic staff in the field. It has been far from perfect. Due to a late start, its first year of planning was carried out from the top-down, making embassies and missions in the field unhappy about their limited role in budget making and priority setting. Thinly staffed and at times, taciturn, its operations were far from transparent, leading to suspicions about its intentions in the executive branch, Congress, and foreign-assistance organizations and think tanks.

Yet, oddly, F represents a victory for the organizations focused on long-term development goals. The office’s director, who reports to the secretary of state, also serves as the USAID administrator, giving that organization a higher profile at State. Much of the organization’s budget-planning staff was drawn from USAID, placing them at the center of foreign-assistance budgeting. (Some at State will argue that USAID planners didn’t know enough about State-run assistance programs, which is likely correct, but exactly the type of defect closer coordination was intended to correct.)

In addition, F disproves that State is biased against long-term economic, social, and governance planning. Overall, funding for long-term assistance programs in “people,” “economic growth,” and “governance” held 50 percent of the share of foreign-assistance funding for the first three years of F’s work; “peace and security” funding received closer to one-third of the funds. USAID supporters will claim that the first F budget shifted resources away from their “development assistance” to ESF, reflecting State’s inherent fondness for short-term, security-related programs. But this is an “account-level” view, not a program view. There’s no evidence that those funds moved to short-term programs, only that they shifted labels to a more flexible spending authority.

For all of its problems, F is a serious attempt to create a process that U.S. foreign policy has lacked for decades–strategic planning that links program funding decisions to important national security goals. Such a process is an essential building block for the kind of long-term strategic focus that U.S. foreign policy has lacked for 60 years, which will empower our civilian tools enormously.

This argument about the future organization of foreign assistance, then, is largely about the meaning of “development.” For some, “development” seems to have a narrow focus, meaning programs that target “poverty reduction.” But if “development” means programs that focus on the long-term improvement of economic, social, and governmental conditions in recipient countries, a large share of U.S. foreign-assistance programs meet the test. Promoting “development” in this broad sense is clearly in our long-term national interest and should be part of our national strategy and closely coordinated with overall diplomatic objectives.

An independent Department of Global Development will not strengthen this broader focus or enhance the strategic planning needed for a stronger civilian toolkit to emerge. First, let’s consider political realities. Foreign assistance, derisively referred to as “foreign aid,” isn’t popular with Congress or the U.S. public. As such, congressional funding has never been as substantial as Department of Global Development advocates or USAID supporters would like. There’s no reason to expect that a newer, separate department would attract greater support. If anything, unhooked from broader U.S. foreign policy objectives, it would be a tiny department that’s maintained only at a minimal level because a narrow special interest constituency supports it just enough to keep some funds coming.

This apparent weakness might be remedied by moving all foreign-assistance programs, including those planned and budgeted by State such as counterterrorism, counterproliferation, counternarcotics, human trafficking, demining, and peacekeeper training, into its orbit. But disconnecting these programs and funds from the diplomatic and policy community that make strategic and budgetary decisions is illogical and counterproductive. It would only dilute the “pure” development focus of the new organization. And eventually, those programs would migrate back to State, where yet another bureaucratic organization would need to be created to administer them.

So really, creating a Department of Global Development is a lose-lose proposition. If the new department is too big, it will become unfocused. But if it’s too small, its funding will evaporate.

Given these weaknesses, it’s impossible to imagine how such a new department could emerge. For some, the effort would bring back memories (kept painfully alive by its ineptitude) of how the Department of Homeland Security–the poster child for reorganization chaos–came into existence. And the suggestion that the Department of Global Development would decouple foreign policy and diplomacy from foreign assistance is probably enough to mobilize substantial opposition to the proposal. To engage in a fierce fight–no matter the intentions–against such staunch opposition could set back current development funding and U.S. foreign assistance for years. It would also waste immense amounts of energy in year one of a new presidential administration, exactly the time when meaningful program initiatives are possible.

It’s better to focus our energy on strengthening, funding, and networking the existing institutions. This means building up USAID’s capabilities, including expanding its operating staff. It also means improving the strategic and budgetary planning capabilities begun with F, institutionalizing F, and focusing its work on the longer-term. And it should mean giving F’s director the rank of deputy secretary of state, while retaining the USAID administrator title as well, to further establish the importance, visibility, and strategic role played by U.S. foreign-assistance programs. These steps would help build the stronger, coordinated civilian capability we need to rebalance the statecraft toolkit, help persuade Congress to provide additional funding for its programs, and ensure a broad-based international engagement that doesn’t give the job to the military.