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U.S. Leadership on Aid Transparency

June 13th, 2012
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See below for a guest post from Dr. David Hall-Matthews, managing director of Publish What You Fund, as he underscores the importance of implementing recent commitments made for international aid transparency standards and describes how the U.S. is uniquely positioned to lead on aid transparency globally.

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As Publish What You Fund prepares our 2012 Aid Transparency Index, I am happily reminded of the progress made on U.S. aid transparency commitments in the last couple of years.

The real game-changer was the U.S. signing up to the International Aid Transparency Initiative (IATI) in Busan last November. By joining IATI, the administration has agreed with the global consensus that if aid is to ever truly be effective, it must also be transparent.

Partial information on aid exists somewhere, in some format, but it is impossible to see the crucial big picture across the 25+ agencies administering foreign assistance. We now have a clear sign from by far the largest single donor that an agreed standard to publish aid information is needed to help us answer vital questions on who is spending on what, how much, and where.

Another milestone came in September 2011, when the President put forward the Open Government Partnership (OGP) National Action Plan. This committed the U.S. to make foreign assistance information available in a timely manner and internationally comparable format.

In her speech at the OGP annual meeting, Secretary of State Hillary Clinton said, ‘We now have a chance to set a new global standard for good governance and to strengthen a global ethos of transparency and accountability.’

This is the first step in the right direction.

Now we need to make these commitments come to life and fully embrace the President’s vision on aid transparency. The U.S. is now in a position to lead on the aid transparency agenda. When all agencies are publishing consistently to a common standard, it will help to improve—and demonstrate—the value of their aid. It will also help to encourage other, newer donors to improve their transparency.

So now is the time for the U.S. to institutionalize the progress it has made.

Concretely, this means agencies such as USAID, State Department, and the Millennium Challenge Corporation (MCC) must start publishing the information they already hold in their internal systems and websites in the common format, as soon as decisions are made.

According to information collected on MFAN’s Policy to Action website, some progress to that end is being made. We know that under USAID’s new Evaluation Policy, the agency is committed to publishing evaluation reports within 90 days.

The MCC joined USAID and the State Department to publish data on the Foreign Assistance Dashboard and is to date the only agency to publish obligation and expenditure data—setting a strong precedent for transparency in the U.S.

But for organizations working on the ground in Afghanistan, Haiti, or Liberia, knowing where money has been spent after the fact does not help—they need to know where money is going right now, when the funds will be disbursed and spent, and for what purposes.

Wouldn’t it be great to have a single website where tax-payers can see exactly how their tax dollars are spent—and for what purpose?

Now imagine the value of that information when it is compared against what other donors are doing. All of a sudden you start to get a clear picture of spending patterns in some of the most highly aid dependent countries. That is one of IATI’s main goals, but in order to make it happen, donors need to start putting information through the IATI Registry.

This is what takes us from one agency publishing in one particular format and on one particular website, to a common platform where—for the first time—information becomes compatible and comparable. This will be invaluable for recipient countries and development effectiveness.

Only then can we start to have pragmatic conversations about why a hospital is built in a rural town without a road leading to it, or why there are three donors working on preventive health care and none working on treatments or researching local medicine.  Aid has the power to radically transform lives, but its potential is not being fully realized because we do not know enough about how it is spent.

The U.S. is now making important decisions on how to implement these transparency commitments.  There are experts within agencies, the White House and OMB, working out how to meet the Presidential Policy Directive on Development, the Quadrennial Diplomacy and Development Review, USAID Forward, the OGP and the Busan commitments on aid transparency.

At Publish What You Fund, we believe there is a simple answer—that all agencies administering foreign assistance must start publishing timely, comprehensive, and comparable information online to the IATI standard.

 

Mark Your Calendars — Week of June 11, 2012

June 7th, 2012
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Every Thursday, MFAN will post a list of upcoming events for the following week. For more information about each event and to RSVP, click on the links below. If your organization is hosting an event next week and you don’t see yourself on the list, please email info@modernizeaid.net.

See below for a list of MFAN Partner events:

 

How is USAID Implementing the President’s Global Development Policy?

May 31st, 2012
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See below for a guest post from MFAN Principal, Senior Resident Fellow at the German Marshall Fund U.S., and former Acting Deputy Administrator for USAID Jim Kunder. To learn more about this blog series, click here.

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I have been poring over USAID’s responses to questions about how PPD-6 has changed the Agency’s business model since President Obama issued the Directive in 2010.  I find much about which to be encouraged in USAID’s update:  USAID’s new five-year country plans, the Country Development Cooperation Strategies, restore much-needed rigor to analysis of development dynamics; the creation of the Office of Science and Technology opens up the possibility of “game changing” partnerships with research and technology institutions; establishing a Global Development Interagency Policy Committee within the U.S. Government could lead to better coordinated aid and trade, multilateral and bilateral development policies; and the rejuvenated Bureau for Policy, Planning and Learning is cranking out high-order guidance, as in the USAID Policy Framework 2011-2015.

USAID’s response to MFAN’s inquiries also raises some questions, and it would useful to hear further elaboration on these items.  First and foremost:  what happened to what many would see as the centerpiece of PPD-6:  President Obama’s extraordinary emphasis on “elevating” broad-based economic growth “as a top priority?”  According to PPD-6, or at least to the White House Fact Sheet accompanying it, “Economic growth is the only sustainable way to accelerate development and eradicate poverty.”  The same day the PPD was released, the President, during his speech to the Millennium Development Goals (MDG) Summit, hammered home the importance of emphasizing economic growth, calling it “the most powerful force the world has ever known for eradicating poverty and creating opportunity….”  As USAID’s response to MFAN displays, it appears that the process of converting the President’s priority into the USAID business model remains a work in progress.  Four “Partnership for Growth” countries have been designated; a new economic growth strategy paper has been promised; and the USAID Policy Framework mentions economic growth as the fourth of its seven “Core Development Objectives.”   Given PPD-6’s powerful endorsement of economic growth, these steps seem modest at best.

My second PPD-6 question for USAID is:  What happened to the U.S. Global Development Strategy promised in the Directive?  It is listed right there in the same paragraph of the Fact Sheet that mentions the Quadrennial Diplomacy and Development Review as one of the core “mechanisms for ensuring coherence in U.S. development policy….”  Establishing such a Strategy – to be approved by the President every four years, according to PPD-6 – seems a concrete way to ensure, in the words of the Directive, the “elevation of development as a core pillar of American power….”

Placing PPD-6 and the President’s MDG Summit speech side by side with USAID’s 2012 MFAN response raises a third question, one related to selectivity.  PPD-6 made powerful statements about how “The United States cannot do all things, do them well, and do them everywhere,” while committing the U.S. Government to “make hard choices about how to allocate attention and resources across countries, regions, and sectors.”  This hard-edged emphasis on rigorous selectivity is not mentioned in USAID’s response to MFAN.  And a cursory review of USAID country programs and budget allocations by sector does not immediately suggest any radical refocusing of resources on a slimmed down portfolio.  Perhaps there are more subtle changes underway that do not jump off the pages of USAID’s website and budget documents, but it would be interesting to hear USAID’s take on how the Agency is implementing the rigorous selectivity statements in PPD-6.

In summary, USAID’s report to MFAN makes a useful contribution to the development community’s understanding of PPD-6 implementation.  But, more information on the topics raised above would be welcome.

 

MFAN Statement: Senate Budget Bill Strong on Foreign Assistance and Reform

May 30th, 2012
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May 30, 2012 (WASHINGTON) This statement is delivered on behalf of the Modernizing Foreign Assistance Network (MFAN) by Co-Chairs David Beckmann, George Ingram and Jim Kolbe:

The Senate Appropriations Committee approved a strong FY13 State and Foreign Operations budget to support U.S. leadership in the fight against global poverty and disease. Acknowledging the challenging fiscal climate, we urge Congress to adopt the Senate bill and advance it to President Obama to sign into law.

The funding in the Senate Committee’s bill will help us reach two important goals. First, it will allow the U.S. to maintain a strong foreign assistance presence in the developing world, where our support is critical to bolstering nascent democracies, helping developing countries and citizens achieve self-sufficiency, and building constructive economic and security relationships. Second, it will maintain the momentum of a decade-long foreign assistance reform process, supported by both parties, that has made our approach more effective and accountable.

The language in the Senate Committee report highlights one particularly important step: Reforming the procurement policies and practices of the United States Agency for International Development (USAID), in order to “protect taxpayer dollars from waste and fraud”; reduce “our reliance on large, inflexible contracts”; and “work more directly with local governments and civil society to build capacity and develop sustainable programs.” We look forward to working with Congress, aid implementing organizations and USAID Administrator Raj Shah, who is leading the procurement reform effort, to see that further changes are enacted sensibly and carefully in support of greater ownership of the development process by developing countries and citizens.

 

New CAP-CGD Report on Reorienting the International Affairs Budget

May 24th, 2012
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Last week, MFAN hosted an event recognizing the launch of a new report titled “Engagement Amid Austerity: A Bipartisan Approach to Reorienting the International Affairs Budget” and co-authored by MFAN Principals John Norris and Connie Veillette. The event was moderated by George Ingram, MFAN Co-Chair and Chairman of USGLC, and featured John Norris, Executive Director of the Sustainable Security and Peacebuilding Initiative at the Center for American Progress, and Connie Veillette, then Director of the Rethinking U.S. Foreign Assistance Program at the Center for Global Development. Responding to the report launch were Gordon Adams, Professor in the School of International Service at American University and Distinguished Fellow at The Stimson Center, and Andrew Preston, Counselor for Development in the Foreign and Security Policy Group at the British Embassy.

Click on the links to read an executive summary of the report and see an interactive map. To read a blog piece from Norris and Veillette, click here.

Ingram opened the discussion by arguing the report is incredibly thought provoking and it underscores the importance of improving the effectiveness of U.S. foreign assistance. Veillette explained the reasoning behind producing the report and the principles used to guide it. During this time of budget austerity, she explained they wanted to think about how and where to cut in smart ways that would not hurt the U.S. aid infrastructure and, wherever possible, minimize the impact cuts would have in developing countries.

To create the report, Veillette and Norris put together a working group of 15 bipartisan individuals who provided input on ways to frame and approach the topic. The goal was to provide a framework to accommodate cuts to the International Affairs budget—frequently referred to as the 150 account—while maintaining U.S. global leadership in the field. Four big ideas came out of the framework discussions: be more selective and focused on what types of economic and security assistance are provided and 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 preferences, and allowing more local and regional purchase of emergency food aid; and create an International Affairs Realignment Commission to examine and redesign programs and architecture.

Norris provided more insight into the process for formulating the report. He said the working group began by recognizing the robust dialogue and debate around aid effectiveness and the lack of discussion about where the U.S. would have the most impact in delivering aid. The working group went through 146 countries who receive U.S. aid and evaluated forces that conspire around selectivity. The findings showed that the U.S. is wildly over-deployed and not as effective as it could be. The report concludes that the U.S. can move the development needle by putting more resources into fewer places.

The first respondent to speak was Adams who was also a member of the report’s working group. He commented on the importance of the report, where it makes real progress, and a few areas where it stimulated his thinking. According to Adams, the importance of the report is in the way the U.S. engages with the world and where it puts resources behind that engagement. He said the report recognizes certain realities, including the notion that the U.S. has a limited ability to create systematic change in the developing world and most of the economic activity occurring in developing countries has little to do with the bilateral and multilateral assistance of major donors. The three components of the report he found stimulating included the U.S.’ ability to help countries create stable governments and fight corruption; the need for sufficient human resources and operating expenses at USAID to ensure effectiveness of our aid dollars; and the role of the Defense Department in development work, adding “with the money comes the mission.”

Preston rounded out the panel by discussing his experience at DFID and austerity in the UK. The UK is also facing major budget cuts, but Preston noted that austerity measures have not affected DFID’s operating model.  DFID’s duty is to spend every penny of aid money well and focus on transparency, evaluation, showing results, and communicating successes and the value of aid. As a DFID representative he believes any changes made in the structural makeup of U.S. foreign aid will be beneficial for all donors. He also believes that the international focus on country ownership will improve effectiveness while making an effort to underpin political decision making and enforcing the importance of graduation.

Overall, it was a lively discussion to kick off a new dialogue around how to make U.S. foreign assistance flexible and effective amid a time of tight budgets and true leadership from developing countries.