Is the enhanced stature of aid in the State Department a good thing?

As my colleague Nate noted, Condoleeza Rice recently announced that the administrator of USAID would be elevated to a deputy secretary of state. She named Randall Tobias, the administrator of the President’s HIV/AIDS program, to oversee this effort.

Is this change a good thing? The Center for Global Development has series of blogs that addresses this question. A number of its affiliated scholars have some real concerns that it may lead to the politicization of development assistance. This is Carol Lancaster’s concern. A former administator in USAID, she likens the absorption of USAID more fully into the State Department to FEMA being taken in under Homeland Security’s jurisdiction. The result in the latter was a previously well-functioning independent agency becoming a plaything of a larger bureaucracy and ultimately mismanaged, as Katrina revealed.

But the day-to-day decisions on how USAID uses its funds for development – which countries receive the aid, how much they get and how it is used – can be very different from the priorities of the state department, which often involve managing crises in foreign countries. America’s campaign against terror can mean giving aid to countries whose standards of human rights, democracy and free markets might not make them good development prospects. Fighting drug production in Latin America might bend aid to that purpose rather than promoting education, health and other approaches to poverty reduction. Sometimes it is important to help groups within a foreign country – for example, human rights watchdogs or groups promoting democracy – that may not be popular with their governments. This is much easier for USAID to do if it is semi-independent of the state department. It is much more difficult if foreign aid is managed by US ambassadors who have to maintain good relationships with those governments.
The planners in the Kennedy administration created USAID as semi-independent of the state department for this very reason – where two agencies have different goals and modes of operation, the mission of the bigger, stronger agency will almost always overwhelm that of the smaller agency and undercut its effectiveness. There are two recent examples of this very problem. The merger in the late 1990s of the US Information Service into the Department of State is widely regarded as a disaster for the effectiveness of US public diplomacy. And the merger of the Federal Emergency Management Agency into the Department of Homeland Security is another case of a once well-regarded, effective agency failing to respond to the Hurricane Katrina disaster after being absorbed by a much larger department.

While her concerns about politicization of aid ring true, I’m not sure if I buy this parallel. I’ve never thought our development assistance architecture and USAID in particular was such a great model. Project based development assistance seems to have run out of gas as a model, leading to islands of success in a broader sea of poor governance. So, I’ve been enthusiastic about new development models. Lancaster would probably agree. Indeed, she calls for a separate development agency apart from the State Department. Another CGD colleague Steve Radelet makes a similar case, suggesting that Britain’s DFID is a preferable model:

Second, while reorganization is necessary, this plan only goes part way, and leaves many other US departments providing assistance. This was a missed opportunity to bring all foreign assistance programs under one roof, as the UK did a few years ago when it created DFID. Creating a new Department with clear responsibility for US aid programs would have helped rationalize the programs and make them much more effective in pursuing our goals. Thus even with this change many of our programs will be fragmented and poorly coordinated.

I’m ambivalent. I’m not sure if the problems they warn of are necessarily bound to happen. I’m happy to see the profile of the aid regime boosted within the larger foreign policy establishment. If in time this proves to be a problem, perhaps the separate agency can happen. The interesting point about DFID is made in a reply to Radelet’s post. The UK aid regime has been independent since 1961 but it only achieved cabinet level status under DFID. Since that as yet appears unlikely in the U.S., this higher profile may be a second best solution.

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