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Opinion: Foreign aid industry inherently flawed

Most NGOs are locked in an endless race to win USAID grants, then try to adhere to impossible standards of compliance.

A child carries an MRE (Meal Ready to Eat) donated by Plas Timoun, a local NGO, in Port-au-Prince, March 19, 2010. (Eduardo Munoz/Reuters)

WASHINGTON — Pundits on the Potomac love to draw parallels between 21st-century Washington and imperial Rome – pomposity and profligacy often being counted among the shared characteristics.

But when it comes to the pressing question of fixing U.S. foreign aid, the better metaphor is monastic, medieval Europe. For like monks calculating the number of angels able to dance on the head of a pin, the apparatchiks of our international assistance community remain focused on dogma, never questioning the foundations of their credo.

It’s been almost half a century since the Kennedy administration first formally articulated America’s overseas giving goals in the 1961 Foreign Assistance Act. Although amended on several occasions, the law has never been wholly rewritten, despite universal acknowledgement that reform is urgently needed.

The House Foreign Affairs Committee’s own website says the current legislation is “characterized by duplication, lack of flexibility, outdated authorities, and lack of clear purposes and objectives.” Three former heads of USAID penned a joint article in 2008 in which they called it “a Cold War artifact that has become obsolete.”

Others are less kind; the well-respected Center for Global Development bluntly describes the law as “outdated, messy, cumbersome, and increasingly irrelevant … wholly lacking in strategic vision … yielding an inflexible and sluggish system for spending money where and how it will have the most impact on development.”

The good news is that there are two high-powered, presidentially mandated evaluations underway, as well as draft legislation being developed by several congressmen. The bad news is these efforts are badly behind schedule, probably duplicative and, most worryingly, will almost certainly focus on tinkering with an appallingly bad system rather than reforming the very nature of foreign aid.

As Secretary of State Hillary Clinton recent told Congress, her goal is to “enhance the capacity and effectiveness of American foreign assistance, to better coordinate among the various aspects of the American government that provide assistance.” In all likelihood this will mean a few hundred more staff for USAID, some uplifting pledges to avoid duplication of efforts and business as usual.

Sadly, that business has become a grotesque parody of what it was intended to be. USAID, our principal conduit for foreign aid, has lost nearly all sense of intelligent development programming and instead focuses its energies on generating reports, conducting audits and minutely justifying even the most routine expenditures. In other words, the idealistic men and women who once joined the agency to change the world have been reduced to mere bean counters.

Likewise the well-known charities that depend on the largesse of the U.S. government have been forced to adopt the same myopic management systems of their donor. Instead of thinking seriously about issues like nutrition or micro-credit, most staff of these NGOs spend their time locked in an endless race to win ever more USAID grants and contracts, and then try to adhere to impossible standards of compliance.