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Fixing foreign aid

A Cold War-era system with too many agencies and not enough coordination needs an upgrade.

November 12, 2009

Poverty, famine and disease overseas lead to lawlessness, instability, revolution and terrorism that threaten American interests, and Americans, at home and abroad. That's why our second most important means of self-defense after the military is foreign aid. Moreover, our investments in development pay off when poor countries become prosperous enough to become trading partners. To their credit, President Obama and Secretary of State Hillary Rodham Clinton realize this, and repeatedly have said as much -- they just don't appear to be in a great hurry to put that philosophy into practice.

On Tuesday, after a 10-month delay that further rattled a demoralized staff at the U.S. Agency for International Development, Obama finally announced his nominee to head the agency. Dr. Rajiv Shah, currently an undersecretary at the U.S. Department of Agriculture, is a popular choice among aid experts, a medical doctor who, at 36, has a resume that would be highly impressive for a man twice his age. If he is confirmed, he will inherit an agency in transition, with a disappointing past and an uncertain future.

Policy disputes are common in the development community, but there is near universal agreement that USAID in particular, and American foreign aid efforts in general, are a muddle. A system created in 1961 to handle foreign aid for a Cold War world -- which at the time mostly meant handing money to dictators who promised to fight off communist revolutionaries -- doesn't function well today. Development decisions are made by 25 different agencies, with little coordination and no overarching policy direction, so that funding is sometimes duplicative or directed at the wrong priorities. In addition to a lack of clear goals, our aid system, which spent $26 billion on development last year, is largely devoid of mechanisms for monitoring and evaluating its effectiveness.

Frustrated by decades of inaction, some members of Congress are getting restless. In the Senate, a bill sponsored by Sens. John F. Kerry (D-Mass.) and Richard G. Lugar (R.-Ind.) would create new bureaus within USAID for strategic aid planning and evaluation. Meanwhile, Rep. Howard L. Berman (D-Valley Village) has a bill calling on the president to create a national strategy on foreign assistance. While it's nice that so much attention is being paid to foreign aid, these bills simply mandate reviews and reforms that are already underway, albeit at a glacial pace; Clinton and Obama have both initiated separate evaluations of the aid system, whose initial findings aren't expected until next year.

The president has a staggering to-do list, but the USAID nomination should have been made months ago, and the defects of the current system are widely known and well documented. Let's get on with fixing it.

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