Guiding Principles for Aid Reform in The United States

Major successes in fighting poverty show us that aid works. We have seen how well designed efforts, administered in partnership with developing countries, with clear goals and strong accountability can make an enormous difference. But not all aid is as effective as it can be and there is always room for improvement. Over the past few years, donors and recipients alike have met to discuss the qualities that make aid the most effective so that every dollar is maximized and these principles have been established as a standard through the "Paris Declaration" and more recently the Accra Agenda for Action.

In specific markets, applying the principles of the Paris and Accra declarations is necessary to make a real impact on how aid is programmed and delivered.  Over time, the system that delivers U.S. foreign assistance has become outdated.  Governed by legislation that was written in 1961, U.S. foreign assistance is managed and programmed by more than 20 agencies.  Innovative and results-oriented programs introduced in the last few years have shown a new way forward for development assistance. But they need to be integrated into a more coordinated and cohesive program governed by a national strategy for development. 

With a new Congress and a new Administration in place, there is an opportunity to prioritize development and modernize the U.S. structure for delivering assistance.  A new vision for U.S. foreign assistance should include the following principles and should adhere to the guidelines put forward in the Paris Declaration and the Accra Agenda for Action:

• Unify U.S development assistance policy around a comprehensive strategy. All U.S. development assistance programs should be guided by a National Development Strategy that establishes clear objectives, goals and strategies to achieve these goals. The U.S. Congress should rewrite the Foreign Assistance Act to redefine the mechanisms to deliver upon this strategy.

• Support sufficient resources. Funding for development assistance must be sufficient to meet the challenges of reducing global poverty and promoting stability around the world as outlined in the National Development Strategy. The needs are great and the U.S. must do its part in ensuring these resources are committed and spent effectively. Moreover, investing in rebuilding the U.S. human capacity to plan, manage, and implement development programs is of the utmost importance.

• Consolidate authority and accountability but preserve the principles behind the MCC and PEPFAR. Effective and efficient aid means consolidating authority for achieving the goals of the National Development Strategy and streamlining the delivery process across government agencies. A central coordination mechanism is needed along with a new operating model to implement programs in a transparent, streamlined, and fully coordinated manner so that development assistance, trade and IFI policies are working on concert. However, it is crucial that distinct and effective programs such as the Millennium Challenge Corporation (MCC) and the Office of the Global AIDS Coordinator (overseeing PEPFAR) should remain as such within this framework. These programs should continue and be expanded so that the MCC can to enable democratic and well governed countries in Africa and elsewhere continue on the path of democracy and development and so that OGAC can effectively implement the recently authorized extension and expansion of its mission through 2013.

• Coordinate with recipients to maximize the impact of U.S. development assistance. U.S. development assistance should be integrated with beneficiary country poverty alleviation and economic development policies and tailored to specific needs. To the extent possible, recipient countries should partner with U.S. aid providers from design to implementation. But in situations where the governance and accountability of recipient countries is weaker, the US should consider alternative means of delivering assistance that will still achieve shared goals and spends resources effectively and efficiently.

• Coordinate with other multilateral and bilateral donors. Ensuring that U.S. development assistance programs are harmonized with other donor interventions will help maximize the impact for recipient nations while minimizing the bureaucratic burdens on the recipient and the potential for duplicative efforts.

• Untie aid, eliminate inefficiencies and focus on results in order to maximize investment. A reformed U.S. assistance approach should reduce or eliminate such inefficiencies as earmarks and buy American requirements that tie aid and slow and impede effective aid delivery. Modernized programs will yield maximum impact if they focus on measurable results, with more robust monitoring and evaluation mechanisms that demonstrates the full impact of the U.S. investment.