As Private Foreign Development Aid Grows, What of USAID?

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May 13, 2012; Source: Bloomberg News

Many readers are going to find this Bloomberg article interesting because of its question about evaluation. Private support of overseas development has jumped by 164 percent between 2005 and 2010 while official development assistance from entities such as the U.S. Agency for International Development (USAID) grew a sluggish eight percent over that period. So it’s important for American donors to overseas development organizations and projects to really know whether their money is doing any good. But how to know? The Bloomberg article examines the program for clean cookstoves in developing countries, which is achieving mixed results, and suggests an evaluative examination of microcredit, which has reportedly increased from 7.6 million family borrowers in 1997 to 137.5 million in 2010.

Our interest isn’t the never-ending commentary on program evaluation, but the relationship of private (and foundation) giving for overseas development projects to U.S. government aid. The implication of the Bloomberg article is that private giving is supplanting government assistance somewhat. We think the real reason for the imbalance between private and public assistance goes to what has been happening in USAID. As we’ve noted before, USAID has been terribly understaffed due to cutbacks from the Bush Administration, cutbacks that President Obama had promised to reverse with a new commitment to USAID staffing. Perhaps because of congressional budget constraints, that didn’t happen and USAID has had to rely as much as ever on private firms taking the place of needed USAID desk officers.

In addition, a very large portion of USAID assistance has been devoted to Iraq and Afghanistan, where the U.S. is hoping that investments in civil society strengthen the position of the U.S. military deployed in those theaters. Public support for USAID may be limited since so much of it is targeted to indirectly bolster the nation’s war effort, and some of it is targeted toward areas where official corruption is rampant and a decent slice of aid probably gets pocketed by local officials.

Private global assistance may not be intended to dislodge USAID assistance, but to compensate for limitations in the nation’s current conception of foreign aid. That said, U.S. donors to global assistance projects might be well advised to add support for development aid advocacy to their portfolios of grants.—Rick Cohen

  • Ria Burghardt

    True as the report above is what is lacking is an analogous comparison to development money that is now flowing thru the Dept of State that used to come thru USAID. As I’m sure the writer is aware, that shift has been the subject of much “debate” over the past years.