See below for a guest post from MFAN member Jeremy Konyndyk, director of policy and advocacy at MercyCorps.

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Two and a half years ago, President Obama signed the US Government’s first Global Development Policy and initiated a reform effort—known as USAID FORWARD—to begin modernizing the US Agency for International Development with the aim of turning it back into “the world’s premiere development agency”.  This week, USAID releases its first progress report on that effort.  It is a good moment to take stock of what has been achieved, and whether the Forward Agenda is delivering meaningful change.  I think that it is—with a few important caveats.

Kudos!

The report highlights some notable achievements.  The most important may be the re-establishment of USAID’s critical thinking and planning functions via the new Bureau of Policy, Planning, and Learning (PPL).  PPL has driven the development of USAID’s new evaluation policy, the new policy on disaster resilience, and a host of other major policy and strategy documents.  It has also created a badly needed platform for bringing outside expertise into USAID planning.

Progress has also been made on rebuilding staff capacity, which was badly hollowed out by severe budget cuts in the 1990s.  The report notes that the number of USAID Foreign Service Officers is on track to be doubled.   Much criticism has been levied at USAID for becoming a glorified contracting agency, which reflects that since the mid-90s USAID has had growing program budgets without corresponding staff increases.  Increased staffing should help to begin changing this.

Finally, USAID Forward has expanded the agency’s investments in research and innovation through a new series of external partnerships, and resources to identify and scale up new approaches.  While it is important not to see innovation as a silver bullet (a concern the report rightly notes), it can help to make development interventions smarter, cheaper, and more effective.  USAID is right to be investing in this.

Room for Improvement…

For years the development community has pushed for “local ownership”—the principle that aid must be led by the priorities and capacities of those it seeks to help.  Under USAID Forward, the agency has for the first time tried to systematically put this principle into action.  That in itself is a very important step.

But the results have been mixed.  The agenda has focused narrowly on direct funding to local institutions in partner countries; yet a local ownership approach should influence what USAID funds, not just who it funds.  The rollout also left the impression that USAID sees international aid partners mostly as expensive pass-throughs, not recognizing the important role that international partnerships can play in expanding local capacity.  To its credit, USAID’s report acknowledges this shortcoming and states that it will need to better “incorporate the work of an international non-governmental organization or multi-donor trust fund to help develop capacity”.

The other challenge for the local ownership agenda—which has yet to be significantly addressed—is the bureaucratic burden of seeking USAID funds.  The rules and regulations for USAID funding run to hundreds of pages.  These can be hard for native English speakers at well-resourced Western aid agencies to understand and comply with, much less non-Anglophones in developing country institutions.  Prospective local partners, with limited organizational development bandwidth, can be faced with an unfortunate choice between investing in complex USAID compliance capacity or in capacities (such as improved internal controls, or technical capacity) that would advance their overall mission.

Concerns for the Road Ahead

While the progress report highlights some real achievements, one big elephant in the room is not addressed: USAID’s troubled relationship with Congress and the outdated legislative and regulatory framework that USAID must live within.  As former USAID Administrator Andrew Natsios has argued, USAID faces a growing challenge in balancing its accountability to Congress (and others) with its core mission of designing and managing development interventions.  In Natsios’ telling—which resonates with many outside observers and partners—the balance between these functions is now badly out of whack.

That traces back to a lack of Congressional confidence in USAID.  Rebuilding that confidence is fundamental to USAID’s future success: as I argued earlier this year, the USAID Forward reforms will remain vulnerable without greater Congressional buy-in.  This will require engaging Congress more robustly in the reform process (reaching out to Rep. Ted Poe on his transparency legislation would be a great place to start).  On this critical front, the Administration has achieved little and indeed has at times been perceived by Congress as ignoring or opposing good-faith reform efforts floated by USAID’s Congressional allies.  The result is that Congressional confidence in USAID continues to stagnate—a fact underscored by the House Budget Committee’s recent call to make the Millennium Challenge Corporation, rather than USAID, the flagship US development agency.  Building a more constructive Congressional relationship, with an eye to new reform legislation, should be USAID’s next big step.