Engagement Amid Austerity: A Bipartisan Approach to Reorienting the International Affairs Budget

This week, MFAN Partner Oxfam American ran an open letter to Congress about the need to support USAID reforms that empower local citizens to hold corrupt governments accountable and take ownership of their own development. The letter reads, “USAID is strengthening its ability to partner with us by eliminating large, inflexible contracts and by working more directly with local governments, businesses, and civil society organizations like ours.  These are crucial requirements for fighting corruption and defending human rights.” The letter is signed by sixteen leading anti-corruption and human rights activists calling on Congress to break the US government’s overreliance on contractors by investing modest sums in local watchdogs, businesses, and governments.

USAID’s effort to reduce its reliance on contractors and invest more directly in local government and civil society is referred to as implementation and procurement reform (IPR) and it is part of the broader USAID Forward agenda. Specifically, the agency plans to spend 30 percent of its funds through local actors by 2015 (up from 11 percent in 2011). In Oxfam’s Progress Report on IPR, they note that “USAID will boost its funding through host country systems to reach 25 country governments directly; they will cut out the middleman by hiring 576 local nonprofits directly.”

In a recent blog post, Oxfam’s director of Aid Effectiveness, Greg Adams, argues that a key outcome of IPR is tackling corruption and promoting human rights. He writes, “the US government has often bypassed local organizations and governments rather than working with them, missing opportunities to help local watchdogs root out corruption and strengthen democratic institutions, reducing waste, fraud, and abuse for the long-term.”

Oxfam is encouraging its members to take action by sending a note to Members of Congress, urging them to “follow the money.”

IPR has become a hot topic over the past several months in the development community. To learn more about the issue, from a variety of perspectives, read the pieces below:

• Save the Poor Beltway Bandits (Bill Easterly)
• The fight over America giving itself foreign aid (Tom Paulson)
• USAID shifts away from large contracts and looks to build internal capacity — prompting advocacy from development contractors (Dave Algoso, Find What Works blog)
• Banditry in the US Congress? USAID v. Contractors (Edward Rees, Building Markets blog)
• Haiti: Where has all the money gone? (CGD Views From the Center blog)