President Obama announced $3 billion in new private sector investments in agriculture in three African countries at a packed event in Washington, D.C., last Friday. The New Alliance for Food Security and Nutrition is the cornerstone of the United States’ 2012 G-8 commitments to development led by USAID and administrator Rajiv Shah. There’s a lot to like about the partnership: presidential leadership, a link between public and private investment, and a focus on policy change. But all eyes are on how the relatively modest investments will be implemented and whether they can reach the ambitious poverty reduction targets.

In his remarks at the Chicago Council’s symposium, President Obama said the new alliance would build on the G-8′s 2009 $22 billion global food security commitments. The White House fact sheet says:

The New Alliance for Food Security and Nutrition is a shared commitment to achieve sustained and inclusive agricultural growth and raise 50 million people out of poverty over the next 10 years by aligning the commitments of Africa’s leadership to drive effective country plans and policies for food security; the commitments of private sector partners to increase investments where the conditions are right; and the commitments of the G-8 to expand Africa’s potential for rapid and sustainable agricultural growth.

The new alliance focuses initially on Ethiopia, Tanzania, and Ghana. More than 45 multinational and small and local business have committed $3 billion in investments; the countries have committed to specific business environment policy reforms.

Here’s what to like about the announcement:

The president is using his bully pulpit to champion development. The president has been relatively quiet on global development since issuing his policy directive in September 2010. In his remarks on Friday, President Obama made a strong case for why global development and food security are in the United States’ moral, economic, and security interests. It’s still a big deal that development is on the president’s agenda and that he is using his bully pulpit to champion the issues (something the Bush administration understood and CGD president Nancy Birdsall urged prior to the 2008 elections).

It’s the PPD in action. The new alliance checks off just about all of the presidential policy directive on global development‘s key elements. It’s selective, country-led, focuses on economic growth and policy reforms, leverages the private sector and multilateral development agencies (African Development Bank, World Bank, International Fund for Agricultural Development, etc.), and emphasizes results and accountability.

Links private investment, public sector know-how and policy reform. The new alliance and specifically USAID administrator Rajiv Shah are exploiting U.S. convening power to leverage country policy reforms and private investments. ONE Campaign co-founder Bono went so far as to suggest the announcement could signal the death of the traditional donor-recipient relationship, presumably in part because of the country leadership, but also because of the mix of public and private sector roles.

Comments:

Some critics argue the United States–and the other G-8 members–are trying to replace missing in action public funds with smaller private investments. But few expected the United States (or others) would come up with new, large sums of money. And while it’s easier to experiment when times are flush (think creation of PEPFAR and MCC), it’s still a good thing if tight budgets push new approaches for better aid delivery. It just means the stakes are a lot higher for the administration to:

1. Move quickly to implementation. President Boni Yayi of Benin (and African Union chairman) put it this way: “Let’s go now to action!” The challenge for the administration (as is often the case for developing countries themselves) is execution. I’m eager to better understand how the letters of intent between the countries and the companies will work, what will happen if companies fail to invest or countries fall down on their side of policy reforms, what USAID’s role will be, how the investments relate to the African Union’s Grow Africa initiative already underway as well as Feed the Future and the Global Agriculture and Food Security Program, and the timeline for investments.

2. Show evidence that investments lead to poverty reduction. While most agree that private sector investment should follow aid, not everyone agrees that private sector investments will lead to poverty reduction. The new alliance will have to include clear, transparent measures to show whether or not the investments are reducing poverty.

3. Bring Congress along. Chicago Council symposium co-chair and former member of Congress Dan Glickman remarked Friday that the president proposes ideas, but if Congress doesn’t go along, those ideas don’t go anywhere. Bipartisan congressional support–and legislation–was critical to the creation of PEPFAR and MCC during the Bush administration. The Obama administration passed up the opportunity to work with the House (Rep. Howard Berman) on a new Foreign Assistance Act and the Senate on a bipartisan food security agenda (led by Sen. Richard Lugar whose leadership will be sorely missed and Sen. Robert Casey). For food security to become the Obama administration’s signature (and lasting) development issue, it must have Democratic and Republican support in Congress. Those prospects look a lot dimmer on both sides of the aisle today.

The star-studded symposium on Friday lit up much of the development community, but attention will quickly shift from show to substance. The new alliance includes a leadership council to drive and track implementation and report to the G-8 and African Union on progress. G-8 watchers are understandably nervous about the size of the commitments and that it looks and feels different. They’ll be looking to the leadership council, the White House and USAID to share information early and often to shed light on whether the administration’s agriculture focus will be a fleeting or permanent part of its development profile.

I’m eager to know what others think and hope the G-8 and food security experts among you will add your comments below.

The goal of the program remains the same: to provide a one-stop shop for timely, relevant analysis on U.S. development assistance. As in the past, the primary focus will be on reporting, analysis and commentary on the mission, mandate and organizational structure of U.S. aid agencies such as USAID and MCC and their interactions with other U.S. development actors, such as the State Department and Pentagon.  The program will also track presidential development initiatives like Feed the Future and the Global Health Initiative.

I also plan to look beyond aid, where appropriate, to consider related U.S. policies in areas such as trade, migration, investment, environment, security and technology. The U.S. government has embraced the view that development policy is more than aid (see the Presidential Policy Directive on U.S. Global Development Policy), an idea long championed by my colleagues here at CGD, so it seems only appropriate that our Rethinking U.S. Foreign Assistance Initiative should reflect this, too.

So in the months ahead, you’ll not only be hearing more from me but also from my CGD colleagues when their work touches on U.S. development policy, as with Vijaya Ramachandran and Julie Walz’s new policy paper on the (un)accountability of U.S. aid in Haiti. I’m happy that CGD policy analyst Casey Dunning and research assistant Will McKitterick will continue to bring their hard work, brains, and enormous energy to the program.

Most of all, Rethink’s content should be useful to you. What’s on your wish list for what we should cover? What should we drop? And how do you like to receive your U.S. development policy re-thinking? Blog? Email? Wonkcast? Tweets? Carrier pigeon? Share your suggestions as comments on this blog or send to me directly. I’m looking forward to hearing from you and navigating upcoming U.S. global development issues together over the coming months.

Now let’s compare U.S. assistance programs to the two bodies.  The CBO estimated that the moon program cost NASA about $170 billion in 2005 dollars.  OECD DAC data for U.S. ODA to Africa (North and South) from 1960 to 2010 was worth a cumulative $168 billion in 2010 dollars.  So, give or take, the U.S. spent as much sending technical experts (aka astronauts) to the moon as it did on all assistance to Africa over the past fifty years.  That would be somewhere over $10,000 per square mile.

And what about efficiency and effectiveness?  Whatever the horrible amount spent on per diems and airfares by beltway bandits, the travel and overhead portion of the Apollo missions budget was considerably higher, at approximately 100%.   It is also worth noting Africa has seen a considerable amount of development progress over those fifty years and some of it (think smallpox and rinderpest eradication) was pretty undoubtedly in part thanks to U.S. assistance.  Compare that to the moon, which hasn’t even managed to accomplish the basic underpinnings of development –like an atmosphere.

The January 2010 earthquake that devastated Haiti, killed over 220,000 people, displaced several million, and flattened much of the capital, Port Au Prince, also unleashed a tsunami of outside assistance. In the 28 months since the earthquake official donors have disbursed almost $6 billion in aid to help the people of Haiti, the equivalent of $600 per person for a country where per capita annual income is just $670.

Where has all the money gone? On the second anniversary of the quake we set out to answer this question; our new CGD policy paper is the result.  The short answer is that the vast majority of the money so-far disbursed has been paid to international non-governmental organizations (NGOs) and private contractors. And while many of these organizations do excellent work, there is shockingly little information on how they used the funds.

The reliance on NGOs is understandable, given the limited capacity of the Haitian government and weak national institutions. But the proliferation of NGOs makes tracking the money extremely difficult. Estimates of the number of NGOs operating in Haiti range from a few hundred to more than 20,000.  Only a small proportion of the organizations working in Haiti are officially registered with the Ministry of Planning. Using a directory of organizations run by the UN Office of the Special Envoy for Haiti and Inter-American Development Bank, we constructed a data set of 980 NGOs operating in Haiti.

Post-quake aid to Haiti falls into two categories: humanitarian, for short-term relief efforts; and recovery, longer-term financing for reconstruction and development. Humanitarian agencies, NGOs, private contractors, and other non-state service providers received 99 percent of global humanitarian aid – less than one percent went to Haitian public institutions.  None of the $1.28 billion disbursed in humanitarian aid from the United States went to the Haitian government.

Figures 1 and 2 show the breakdown of U.S. Government funding to Haiti in the aftermath of the quake.  Other donors have provided some recovery funding to the Government of Haiti; of total recovery funding, somewhere between 14 and 21 percent of the money has been allocated to the government.
How have international NGOs and private contractors performed with regard to service delivery in Haiti?  The bottom line is that twenty-seven months after the earthquake, it is still very difficult to tell.

Two external organizations catalog evaluations and other reports from organizations operating in Haiti since the earthquake: ReliefWeb and the Active Learning Network for Accountability and Performance in Humanitarian Action (ALNAP).  Less than half of the reports were conducted entirely by an independent party and only slightly over half detail the methodology used.  More than one-third of the reports do not have specific project data.  Especially of concern is the lack of budget or cost data.  Only four program and organization reports have any detail about how the money was spent (how much tents cost, how much money was given per cash transfer, or what percentage of funds went to transport vs. logistics).  Only one of the reports has any discussion about providing the best value for money and what the alternatives might be to the program currently being implemented.  There are almost no publicly-available evaluations of private contractors operating in Haiti.

Despite all of this, given the continued weakness of the Haitian government and USAID’s operating model, it is likely that NGOs and private contractors will continue to dominate service provision in Haiti for some time to come. Fortunately, there are some simple steps to improve accountability for public money and private charitable contributions intended to help the people of Haiti, as a means to getting much greater value from post-quake aid. We recommend three ways to track and evaluate programs and make aid more effective:

[1] Require More and Better Independent Evaluations

There is a great need for systematic evaluation of the $6 billion spent in Haiti since the quake.  There are six key criteria that we would like to see in evaluations:

• Independence (should be carried out by a third party not the organization itself)
• Clear methodology, which explains how the evaluation was conducted
• Clear project data about the number of services provided and number of people benefiting
• Cost break-down or budget report
• Discussion of alternative programs, cost comparisons, or other uses for the money
• Recommendations for improvement

USAID and other US Government (USG) contracting agencies need to clarify reporting mechanisms for recipients of public money, and require evaluations that meet the above criteria for organizations that receive contracts from USG agencies.

[2] Share Data Through the International Aid Transparency Initiative

NGOs and private contractors can greatly improve the reporting of data on expenditures and outcomes.  The International Aid Transparency Initiative (IATI) is a multi-stakeholder initiative that has developed a standard for publishing information about aid spending.  Donors, partner countries, and civil society organizations can publically disclose information on volume, aid allocation, and results of development expenditure.  The UK Department for International Development (DFID) has spearheaded the process and is currently requiring the NGOs which get the biggest grants to implement IATI.  We strongly recommend that the United States, which signed on to IATI last November, adopts the IATI process in a timely manner and requires NGOs receiving public money to become IATI complaint (as in the UK).  Since implementation of standardized reporting requirements is likely to take time, USAID should render public the financial reports from primary contractors and grantees in Haiti and build the capacity needed to track grants and sub-grants, so as to provide some form of transparency in the interim.

 [3] Pilot Competitive Bidding

New Public Management-style contracts to provide services like transportation, health and school construction could help order the NGO landscape in Haiti through a competitive bidding process, while increasing service supply and efficiency. With careful design, they might also increase accountability between donors, NGOs and the Haitian government.  Although Haiti lacks a robust private sector, market competition is possible since there are several thousand NGOs to compete for contracts.  Donor funding for specific projects could be channeled through this model, and competition would help to eliminate the inefficient organizations.  Contracts can be contingent on IATI compliance.  Donors and the Government of Haiti should conduct a pilot of this model in an effort to bring order to the proliferation of NGOs and create a much-needed enforcement mechanism.

I have been honored to work with such a fine group of people who are doing important research on difficult issues.  During just ten years in existence, CGD has had major impacts on how the United States engages with the rest of the world on global development issues.  I look forward to watching its next decade of work.

I am proud of the work we’ve done in the Rethinking program.  From nudging the administration to live up to its commitments made in the President’s Policy Directive on Global Development and the Quadrennial Diplomacy and Development Review to our tracking of special initiatives to our work on the USAID Monitor, I hope that we have filled a gap in existing analysis.  It has been a delight to work with the many groups and individuals who care about these issues.

I leave with mixed feelings – a bit of sadness to not be involved in the day-to-day work of monitoring U.S. assistance programs, but also with much excitement to embark on several independent projects.

I also leave knowing that the program will be in the able hands of Sarah Jane Staats who will assume leadership of Rethink in June.  Together with the talented Casey Dunning and Will McKitterick, I am certain of its continued success.

Best.

The U.S. approach to counter-terrorism cooperation desperately needs revisiting.  The Atlantic Council’s Peter Pham noted, in more diplomatic language than I’ll use here, that the total collapse of the Malian security forces (recall that a collection of Tuareg separatists and Jihadist elements took Gao, Kidal, and Timbuktu in just three days following the March 22 coup) suggests that something is very wrong about the U.S. approach to counterterrorism cooperation in the Sahel.

Indeed.  The two-pronged military-civilian strategy has been to (a) build security capacity of the Malian and other regional militaries to control territory and fight terrorists and (b) take steps to prevent the spread of violent extremism. The cornerstones of this approach are, since 2005, the State-led Trans Sahara Counterterrorism Partnership and the Pentagon’s Operation Enduring Freedom-Trans Sahara (sometimes referred to jointly, in elegance only possible in government circles, as TSCTP/OEF-TS).

After seven years (or a full decade if you count DoD’s Pan Sahel Initiative that predates OEF-TS), the USG apparently has made little headway in building the capacity of the Malian security forces. Mali’s army was losing badly to Tuareg rebels prior to the coup and then crumbled nearly overnight, leaving an area larger than Texas literally ungoverned.  Perhaps just as worrying, U.S. efforts and training (including that of the coup leader) also didn’t seem to result in the personal relationships with the Malian officer corps that would have given the U.S. better eyes into the barracks and perhaps levers to deter a military take-over just weeks before an election where the incumbent president was retiring anyway.

This is all a pretty big indictment of our approach so far. (Full disclosure:  I am partially to blame for this failure.  As Deputy Assistant Secretary for West Africa 2007-08, TSCTP was partly under my watch and, in hindsight, deserved much deeper scrutiny from me and my colleagues.) At a minimum, the Mali debacle should invite some serious reflection on what we think we are doing to promote security and contain violent extremism in places like the Sahel and East Africa.

Unfortunately, the early signs aren’t good that the USG really recognizes the scale of the problem. At the Heritage event, the State Dept rep followed her talking points by emphasizing that USG interagency engagement via TSCTP and existing tools will continue. In other words: what we are doing isn’t working, but we are planning on doing more of the same. Sigh.

U.S. policy dysfunction is at least part of the problem.  It’s certainly true that Mali’s problems are highly complex while U.S. policy instruments tend to be very blunt. It’s also possible that Mali would have plunged overnight from a seemingly-model democracy to a failed state regardless of what the U.S. did (I don’t believe this, but it’s not implausible).

But I absolutely know we can do better. Excessive stove-piping and the confused ‘whole of government’ mess that plagues all our overseas efforts don’t help. The inability of the interagency to clarify objectives, deploy tools, and monitor how things are progressing is all hard enough for a single sector in a single country; it’s nearly impossible for a regional multi-sectoral effort like TSCTP/OEF-TS.  Back at Heritage’s panel, Alexis Arieff of the Congressional Research Service provided an excellent example here.  In describing USG efforts in the Sahel, she charged that no one knows for sure what the U.S. has invested since the programming is spread across so many different budget lines and authorities. Put another way, for the signature USG counterterrorism initiative for West Africa, even insiders cannot figure out how much we are spending nor, by implication, what the money is for.  (The Washington Post figured this out this confusion some time ago too.)  No wonder it’s not working.

I’ve tried, in my civilian post-government life and with time to reflect on this, to figure out more about TSCTP, what are the underlying ideas, and how programs map to those assumptions, but have come up largely empty and frustrated. (There are exceptions, like these useful studies from USAID here and here.)  If we really believe that fighting terrorism in Africa is in our national interest, then the disaster still unfolding in Mali begs for an honest and aggressive rethinking of both the what and the how.

When President Obama released his FY2013 request for the MCC, I expressed concern that this low number was only the opening salvo, subject to reduction in congressional mark-up. So it’s good to see the House recognize the importance of the MCC’s mission and model and fulfill the request.  Assuming the $898 million request for MCC is appropriated, FY2013 will be the third consecutive year that the MCC has been funded at $898 million.

Also worth noting, the House subcommittee included language on the MCC’s new income categories that define “low income” as the poorest 75 countries. These new definitions first passed in FY2012 but will have to be legislated on an annual basis.

The potential end-of-year train wreck will be caused by the very large differences among White House, Senate, and House budgets.  The House adopted a budget resolution that is $19 billion less than the Senate’s.  In terms of the international affairs budget, this means that the House is operating with a $40.1 billion base allocation while the Senate comes in at $49.8 billion.  That’s a nearly 20 percent difference.  (Ouch.)

At these levels, it will be very difficult for the State Department and USAID to effectively run their foreign affairs portfolios, not just because of the stark spending cuts but also because of the numerous restrictions, directives, and earmarks that reduce agency flexibility.  I say this as a believer that the budget can be reoriented to accommodate cuts and improve effectiveness, but also as an advocate of greater flexibility and less micro-managing.

But what about OCO, you ask?  The Overseas Contingency Operations request was designed to accommodate temporary and extraordinary expenses related to operations in Afghanistan, Pakistan, and Iraq.  Last year’s potential budget disaster was ameliorated because appropriators shifted some base funding to OCO, which by the way, doesn’t count against spending caps.

So what did the House Committee do with OCO for 2013?  It fully funded the Administration’s request of $8.2 billion.  Of course, House appropriators rearranged what gets funded in OCO, cutting in half the amount for State Department operations and ESF funding, while increasing amounts for USAID operating expenses, international organizations, disaster assistance, transition initiatives, migration aid, and security assistance.  The problem?  As I’ve discussed before, a dangerous precedent is set if some of this money isn’t truly temporary and extraordinary.  When the time comes to put this money back in the base, there could be justified resistance.

But there’s another problem with how 2013 will play out.  While the House agreed to $8.2 billion for OCO, the Senate’s allocation is just $3.2 billion.  This is one of the reasons that the House’s base budget is so much lower than the Senate’s.  (Combining the base and OCO, the House number is still about 9 percent less than the Senate.)

The difficulty will come as the two chambers try to reconcile these differences.  We’ll know a little more next week when the Senate panel marks-up.  Don’t expect this to sort itself out prior to the elections.  This will be end-of-year calculus with way too many variables, including who wins the White House, and which party controls the House and Senate.  And then there’s the threat of sequestration.

So what does all this mean for development?  When the budget doesn’t get completed by the beginning of the fiscal year, the release of those funds is delayed and the period in which they must be spent is compressed.  As agencies struggle to ship the money out the door, I can’t help but think that some due diligence in oversight might be sidestepped.  The future of programs and projects in the field are left dangling and the United States is not seen as a reliable partner.

And don’t get me started on the hilarity of the U.S. focus on governance…

There were just six months left in Mali’s MCA compact when the military coup occurred. One might assume the impact of a slightly early finish would be minimal. But the MCA compacts invest an enormous amount of energy setting up systems with the partner country in the early years and much of the final disbursements and construction takes place in the final months. Of the $460 million compact, the MCA had expended, but not yet paid or invoiced, $350 million as of December 2011. That means Mali has lost upwards of $100 million in MCA money and the anticipated benefits (most of which occur after a compact is finished) along with it.  The MCC will have to spend some of that money, instead, to extricate themselves from unfinished projects like the airport terminal construction site.

Mali’s coup is an unwelcome reminder of how quickly events can change even in well-governed developing countries and the huge impact political upheaval has on a country’s economy. The U.S. government is rightly pushing for a quick restoration of constitutional civilian rule in Mali. Democracy prevailed in Senegal  (whose MCA compact is underway) and Malawi (whose MCA compact is currently suspended). Let’s hope things turn around in Mali, too (I need to ask my colleague Todd Moss how his prescient draft novel about a coup in Mali and the diplomatic efforts to reverse it ends).

Budget concerns will almost certainly put downward pressure on federal spending across a host of government programs for a number of years.  Although some think it is almost heretical to point out the obvious, the international affairs budget will not be immune from this dynamic. In fact, international spending could take a disproportionate hit compared to domestic spending – despite the fact that discretionary international spending is a very small part of the overall budget puzzle.

International affairs, and more specifically foreign assistance, have rarely been popular budget items among the public or on Capitol Hill – despite consistently comprising only about 1 percent of the total federal budget.  Even so, foreign aid and international engagement make good political targets for elected officials out on the stump. It is far easier to demonize foreign aid than to explain how relatively modest programs to improve living standards in the developing world have consistently proven to be in the national interest over the long-term.

The central question then becomes how do we maintain U.S. global leadership in development and improve the effectiveness and efficiency of aid programs at a time when the international affairs budget is surrounded by so much uncertainty?

Last fall, we set up a bipartisan working group to think through this question and look at how to reorient the international affairs budget during this current period of austerity. The resulting report, Engagement Amid Austerity, is now available.

This report outlines four big ideas as a framework for reorienting the foreign affairs budget:

• Be more selective and focused on what types of economic and security assistance are provided to which countries.
• Put PEPFAR programs in upper middle income countries on an increased cost-sharing trajectory.
• Reform U.S. food assistance programs by eliminating monetization, cargo preference, and allowing more local and regional purchase of emergency food aid.
• Create an International Affairs Realignment Commission to examine and redesign programs and architecture.

While we are not advocating for cuts to the foreign affairs budget, it is abundantly clear that the United States is spread far too thinly in its assistance programs. The United States currently provides economic assistance to 103 countries and security assistance to 143 countries.  U.S. assistance programs are trying to do too many things in too many places without clear objectives.  In addition, the United States continues to provide aid to far too many countries that are simply poor partners. If a country’s leadership is unwilling to embrace reform, democracy, and more open markets, there is little reason to think that U.S. aid programs will make much of a difference over the long haul.

We believe that programs can be better focused for greater impact.  In short, we should be directing more resources into fewer countries. Such a footprint would be far easier to manage, entail fewer operational costs, and help shape countries into partners that no longer require U.S. assistance five to ten years from now. Based on a data-informed process assessing a country’s need, capacity, governance, and commitment to development, as well as subjective judgments, our report rates every single one of the 146 countries receiving U.S. assistance as to the likelihood that U.S. aid will be effective. We recommend focusing economic assistance in 53 countries, and focusing security aid in 72 countries.

Others may reach alternative conclusions using this same data, and we have provided as much information to readers as possible so that they can do so.  We do not expect universal agreement about our conclusions. But amid all the debates that will take place over the next year on how much we spend on international affairs programs, it is equally vital to engage in an overdue conversation on how we spend it.