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Is the Glass Half Full or Half Empty?
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The much-anticipated Quadrennial Diplomacy and Development Review(QDDR) demands to be taken seriously. Its hefty 250 pages present a major rethink of both American development policy and American diplomacy. Much of it is to be commended:
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Reforming Development: New Year’s Resolutions for Policymakers
›The 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. -
The Scoop on Development Reform
›The development reform picture became more complicated after a recent speech by Senate Foreign Relations Committee Chairman Senator John Kerry (D-MA) and congressional testimony by Deputy Secretary of State for Management and Resources Jack Lew.
Revamping State and USAID
At a Brookings Institution speech (transcript) on May 21 entitled “Diplomacy and Development in the 21st Century,” Kerry laid out the Senate Foreign Relations Committee’s plan for strengthening the civilian agencies that deal with these issues.
In the short term, Kerry favors the recruitment of more diplomatic and development professionals and a stronger emphasis on their training and education. He also expressed his desire to “untie the hands of our aid workers” by streamlining outdated regulations and rebalancing the relationship between Washington and the field.
“Over the long term, we need to take a close, hard look at exactly what we want our diplomatic and development institutions to achieve,” said Kerry. “We need to make sure that we give those people the resources they need to get where we have decided they must go.”
To meet these goals, he and Senator Richard Lugar (R-IN) will introduce two pieces of legislation: a Foreign Affairs Authorization Act and a foreign aid reform bill, which will serve as precursors to a more comprehensive overhaul of the 1961 Foreign Assistance Act next year, said Kerry.
A Power Grab by State?
On May 13, Lew testified on the FY2010 international affairs budget request (webcast; testimony), outlining five “smart power” funding objectives:
1. Build civilian capacities in State and USAID;
2. Promote long-term development and human security;
3. Enhance strategic multilateral and bilateral partnerships (e.g., with Israel, Egypt, Pakistan, and Afghanistan);
4. Strengthen global security capabilities (e.g., nuclear non-proliferation); and
5. Maintain the resources to respond to urgent humanitarian needs.According to Lew, State’s approach to development will be both “top-down”—strengthening “the ability of governments to support just and capable institutions that meet the basic needs of their populations”—and “bottom-up”—partnering with civic groups to build human capacity to innovate, cooperate, and solve problems.
Lew indicated that State should coordinate multiple agencies’ efforts to address challenging, cross-sectoral problems. He said, “We must be able to look at a country, a function or an objective and be able to identify everything that the U.S. government is doing in that area—not just State.” For instance, he wants the State Department to lead “a whole-of-government process to design and implement a new food strategy.”
Lew’s testimony seems to indicate that State wants to oversee all of development policy, with no apparent role for the National Security Council (NSC). But it is not at all clear that State has the human and financial resources to coordinate all the other agencies involved in development. If State were granted this authority, the organizational implications would be immense.
At the NSC, development issues fall under the purview of Deputy National Security Adviser for International Economic Affairs Michael Froman, but he has many other issues on his agenda, including the G20 and the G8. I would be surprised if the NSC does not see this kind of overall coordination as part of its mandate. But there have been no public reactions to State’s grab for power.
At the same time, both Kerry and Congressman Howard Berman (D-CA), chairman of the House Foreign Affairs Committee, see development reform as a major part of their portfolios. The State Department has strongly opposed Berman’s bill mandating that the administration produce a government-wide “National Development Strategy,” on the grounds that the responsibility for drafting such a document should be given to the State Department, and not (as it is now written) to the President. The future of Berman’s legislation is not clear, but Kerry also has indicated his desire for an overall strategy paper.
USAID Still Seeking Chief
Finally, USAID still lacks a director. The latest rumors in the blogosphere revolve around Dr. Paul Farmer, the renowned physician who founded Partners in Health, a major NGO focusing on global health. Farmer would be the first USAID administrator in recent years with extensive on-the-ground development experience, but I understand he has no experience with Washington bureaucracy (outside, perhaps, of the health arena). Furthermore, he is known more as a charismatic leader than as a manager.
Farmer would be an unconventional choice for running USAID, though there are conflicting opinions on whether he even wants the job. But if he does want it, he should ensure he had a deputy secretary rank, as well as authority over the Millennium Challenge Corporation, the President’s Emergency Plan for AIDS Relief, and other independent development programs. He also would need the funds and staff to completely revamp USAID to meet the challenges of the 21st century.
John W. Sewell is a senior scholar at the Woodrow Wilson Center and the former president of the Overseas Development Council. ECSP published Sewell’s review of Trade, Aid and Security: An Agenda for Peace and Development in ECSP Report 13. -
Development From the Bottom Up and the Top Down
›From Poverty to Power: How Active Citizens and Effective States Can Change the World, by Oxfam’s Duncan Green, is a very important book—one that should be read by everyone at the World Bank, International Monetary Fund, and bilateral aid agencies. It combines a critique of current development policies and institutions with insights from community organizing and grassroots empowerment. Furthermore, it is comprehensive, covering not only aid but also politics, inequality, vulnerability, and reform of global governance structures. Finally, the book links the two critical components of the development equation: citizen participation and competent governance. The dichotomy between these two has always been a false one.
Green’s central message is that “development, and in particular efforts to tackle inequality, is best achieved through a combination of active citizens and effective states.” This should become part of the operational code of every development institution.
Green points out that “shocks and changes” can be important catalysts for reform. The current financial crisis is one of these shocks, and for our political leaders, it has made global governance a problem to be dealt with—as opposed to an issue too easily ignored. Just look at the recent G20 meeting. My colleagues and I spent a fair amount of time a decade ago designing and trying to sell leaders on an expanded summit to deal with the challenges of globalization. There were no takers. Yet this month we had a heads-of-state meeting that included leaders previously excluded from the G7.
No one really knows how long this crisis will last. But if leaders and their governments do not respond wisely and creatively, the human costs in both rich and poor countries will be immense. Leaders must understand that market forces left unregulated can ultimately prove destructive. This is the lesson of the struggle to regulate the U.S. national economy during the 19th century and of the period after World War I.
The financial crisis also provides an opportunity to raise fundamental questions about long-standing development policies. I strongly believe that the world, and particularly the United States, needs to adopt a new type of realpolitik—call it global realpolitik if you wish. For the United States, a global agenda should include:- An energy strategy that transitions to a less oil-dependent energy supply;
- A climate policy that recognizes one of the greatest threats to our well-being;
- A renewed emphasis on agriculture so that food production increases, particularly in poor countries;
- A health policy that deals with major health threats, old and new, and equips the world to deal with the next pandemic;
- An international effort to deal with failing states and internal conflicts; and
- A major emphasis on ending poverty.
In all of these areas, development promotion provides an important set of tools. No matter how good our intentions, we cannot accomplish these goals without competent partners: states with the capacity to manage their own affairs and cooperate on global problems—states in which rights and freedoms are guaranteed, and in which people feel they have a voice in the policies that affect them. International development is critical to helping foster such states.
I have two additional comments on From Poverty to Power. First, I think the section on aid could have been stronger. The aid “business” is in considerable disrepair, with simply too many donors trying to do too many things in too many places with too little coordination. There are many ways to make aid more effective, but they will not be easy to implement, and Green could have delved into the complexities a bit more.
Second, the book’s strength is also its weakness. It is nearly 500 pages long and has 792 endnotes! Fortunately, there are summaries in English, French, Spanish, and Portuguese available online—but there needs to be a version aimed specifically at policymakers. Imagine you had 10 minutes to brief President-Elect Obama on the key findings of the book. What would you tell him? For better or worse, in this town, your insights are only as good as your elevator speech.
John W. Sewell is a senior scholar at the Woodrow Wilson Center and the former president of the Overseas Development Council.
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