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Reforming Development: New Year’s Resolutions for Policymakers
January 11, 2010 By John SewellThe foreign policy headlines are dominated by terrorism, Iraq and Afghanistan, the Arab-Israeli dispute, and North Korea and Iran’s nuclear weapons.
Under the radar, however, a quiet revolution is going on. Policymakers from the Pentagon to Capitol Hill are proposing ways to modernize development policy to meet the demands of foreign policy in the 21st century.
Development Seeking Its Place Among the Three “D”s—Diplomacy, Development and Defense
Three major efforts launched in 2009 are expected to be completed in 2010:- The State Department’s “Quadrennial Diplomacy and Development Review” of operations at State and USAID is due in Fall 2010; preliminary recommendations are scheduled for this month.
- The White House’s review of global development policy will involve all government agencies with development programs. Headed by National Security Advisor Jim Jones and NEC head Larry Summers, the team will report out in the next few months.
- Congress, which for a long time has paid little attention to these issues, also is making development reform a priority. Both the Senate and the House are writing new legislation to replace the current bill, which was last overhauled in 1961.
A new policy framework is long overdue. Everyone agrees that the Obama administration inherited a system that is broken and must be fixed. But how? I propose seven New Year’s resolutions for policymakers trying to revamp development.
1. Address all the myriad issues that impact American interests and for which development aid could be an important policy tool.
Promoting development is critical to a diverse range of cross-cutting issues:- preventing violent conflicts
- restoring economic growth and dampening financial instability
- expanding global trade
- dealing with global climate change
- dealing with global pandemics and other health challenges
- eliminating absolute poverty
2. Lay out a government-wide “national development strategy” that sets clear goals and objectives for US development policy—and doesn’t just tinker with organizations and budgets.
Development promotion, broadly defined, must be an important part of the solution. But any new strategy must go beyond just reforming the aid program.
While needed, new policies and programs are costly. The sooner they are put into place, however, the lower the long-term costs of not addressing them will be.
3. Include all the parts of the U.S. government that are now engaged in promoting development.
Existing development capacities are spread throughout the executive branch, and, in some cases, the private sector. Currently 25 departments, 25 agencies, and almost 60 offices are involved in making or implementing development policy. There is no central oversight, planning, budgeting, implementation, or evaluation.
There must be a central point within the government that monitors and coordinates all development programs. Past experience indicates that only the White House, with a strong presidential mandate, can effectively pull off this coordination. Many previous attempts at reform have foundered because the executive branch refused to take congressional initiative seriously.
4. Reflect on lessons learned over the past 60 years.- While liberalized trade and economic openness can improve growth, each country must craft its own strategies.
- Growth is important, but it alone will not eliminate poverty. Measures that directly address poverty are important for their own sake, and if done right, will enhance economic growth as well.
- Similarly, good governance and democracy are important for growth, but are also important goals in their own right. Participatory decision-making is critical to program success.
- Conflict, with its high human costs, is not caused by poverty and lack of development, but makes the solution to other problems much more difficult.
- Investments in poor people, and particularly poor women, pay high dividends. Measures increasing access to education and health, redistributing productive assets (credit and land), and supporting small-scale rural and urban enterprises are particularly effective.
The United States is now one of many players in the development game. In fact, in all but a few countries, it is not even the major aid provider. In Southeast Asia, China, Japan, or India are more likely to be the major donors; in Africa, it is the European Union or China.
Furthermore, many nongovernmental funders have joined the field. The Gates Foundation has spent more than $12 billion on its Global Health Program. Ford and other U.S. foundations are seeking to rebuild African universities, and companies like Mars and FedEx are running technical assistance programs. In addition, American private voluntary agencies have raised over $10 billion in private funds—more than some European aid donors.
Trade and private financial transactions dwarf official development assistance (ODA). For instance, remittances from migrants to their home countries are approaching US$300 billion a year, nearly 50 percent more than all ODA. Frankly, trade liberalization and financial stability will have greater impact on development than any increase in ODA.
As a result of these seismic shifts, U.S. development policy needs to be smarter and more strategic, mobilizing new and different ways to engage governments, corporations, universities, foundations, and civil society (as is now being done for with HIV/AIDS).
6. Make fundamental changes to existing aid structures, which have atrophied over the years.
Currently, USAID is not equipped to deal with the challenges of the 21st century. It is considerably understaffed and lacks the necessary technical skills, particularly in agriculture and institution-building. The agency has no capacity to think strategically about the global development environment and lacks a voice at policy tables. Furthermore, new independent development agencies, such as the Millennium Challenge Corporation and PEPFAR, have proliferated
A revamped U.S. aid program needs a strategy that would:- Give responsibility for formulating and implementing development strategies to the user country, thereby transferring ownership and increasing effectiveness. Providers, of course, can then choose whether or not they want to support the country’s strategy.
- Agree on a more rigorous, transparent, performance-based approach to allocating ODA.
- Give equal priority to global problems, regional needs, and country priorities.
A long-term commitment is essential because these significant changes will not be implemented overnight. It will take the next three years of President Obama’s tenure (and perhaps longer) to change long-embedded policies and practices. Remember, the Defense Department was established in 1948, but did not fully integrate the three services until the Goldwater-Nichols Act of 1986—almost 40 years later.
New Year’s resolutions are often broken as the tough work of fulfilling them becomes all too apparent. But breaking these resolutions will adversely affect U.S national interests in the coming decades. As Secretary of State Clinton argued recently, development “is a strategic, economic, and moral imperative – as central to advancing American interests and solving global problems as diplomacy and defense.”
The administration and Congress now have an opportunity to set development policy on a new course. Let’s hope they take it.
John Sewell is a senior scholar at the Woodrow Wilson International Center for Scholars.
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