Injecting Economic Realism & Teeth into the QDDR
By Richard Crespin, CEO at CollaborateUp, and Daniel F. Runde, Director on Project for Prosperity at the Center for Strategic International Studies (CSIS)
The British have a well-deserved reputation for delivering tough, if necessary feedback. This reputation manifested recently in the way Prime Minister Theresa May’s government has led the United Kingdom’s rethink of its approach to bilateral and multilateral international development. Under successive Conservative governments, the UK’s Department for International Development (DFID), the UK corollary to the US Agency for International Development (USAID), has repeatedly undertaken a clear-eyed review of its role as the second largest international aid and development donor, laying out a template other donors should emulate. At the dawn of a new American presidency, the United States should consider borrowing a page from this playbook and adapting how our British friends have injected economic realism and accountability into their approach to international aid and development.
Having recently met with senior officials involved in these Bilateral Aid Reviews (BAR) and Multilateral Development Reviews (MDR, née Multilateral Aid Reviews), we gleaned eight key insights the US Secretary of State and incoming USAID Administrator should consider injecting into the Quadrennial Diplomacy and Development Review (QDDR) or its successor:
- Knowing where its going. In her speech to the Conservative Party Convention, DFID’s head Priti Patel shared her vision for international development grounded on “following the money” so taxpayers know how their money gets spent. Following this guidance, DFID has started tying funding to the ability of international organizations (IOs) and other recipients of funds to transparently report spending. The US and other major donors should do likewise - not only because transparency represents a commitment to basic good governance but also because it contributes to making the case to taxpayers that their governments can effectively steward their money. When it comes time to renew funding for the United Nations and other IOs, instead of threatening to cut core funding, the United States should tie funding to transparency and insist these organizations improve their ability to track and report.
- Follow the evidence. Too often, anecdotal evidence or political whims determine which programs receive money. DFID insists on solid evidence and data before picking the problems they choose to tackle and requires funding recipients to report on impact. USAID has already begun to apply this kind of thinking to many of its programs and should now institutionalize it in program policy (e.g., in the Annual Program Statements) and in procurement and grantmaking policy. As new policy ideas come out of things such as the Sustainable Development Goals, the United States should require solid baseline data before backing specific policies or programs. This will also require an investment in gathering baseline data and strengthening monitoring, evaluation, and learning to track and report the impact for the dollars spent.
- Pay for results. Savvy businesspeople only pay upon receipt of goods or services. It may seem obvious that governments should do likewise, but international development, unfortunately, is not like buying staples or cleaning services. It’s rarely so cut-and-dry. DFID, however, has begun a bold process of working with multi-laterals to develop a set of mutually agreed upon goals related to each of its major development priorities. This relatively new approach will take time and patience to get right. Nevertheless, the United States should follow suit and make this a foundational principle in all its Official Development Assistance (ODA) programs, including reforming the acquisition regulations governing development programs to make pay-for-results contracts and agreements easier to execute. In addition, the US government should make a deliberate investment in training its acquisition workforce on how to award and manage these types of agreements.
- Flexible exits. Lots of international organizations and NGOs talk about “sustainability,” which largely seems to mean “permanent philanthropy” or moving from donor to donor without graduating to self-sustaining solutions. At multiple levels, DFID has put in place processes for articulating exit strategies to “graduate” programs from development assistance. Before starting a program, USAID should carefully consider how it will exit and/or graduate the program. These exit strategies should not be entirely fixed or predetermined, but rather flexible to emerging conditions. Ideally, though, development investments and innovations should lead to market-based solutions or at least to self-sustaining solutions supported by local governments and institutions.
- Tie money to collaboration & coordination. To say that that the field of international development has a lot of redundancy and lacks effective coordination across NGOs and IOs would represent the very height of English understatement. That’s why DFID requires fund recipients to work together and links funding to effective collaboration and coordination. This should become the modus operandi for all major donors and extend to all levels, including ODA funding, grant, sub-grant, contractual, and cooperative agreements.
- Maintain the emphasis on humanitarianism and the liberal rules-based order. The British government recognizes that the British people have self-interest in seeing the existing international order, with its emphasis on human rights and rule of law, continue. The United States and all democracies share this common interest, and they should all ensure their ODA funding goes to programs that support and extend this system.
- Focus on growing economies and good-paying jobs at home and abroad. President Trump’s senior strategist, Steve Bannon, calls himself an “economic nationalist.” Prime Minister Theresa May echoed this view in her recent “Hard Brexit” speeches while also adding a hefty dose of “Global Britain,” recognizing that Britain’s long term economic interest relies on having strong international trading partners capable of affording British goods and services. DFID has wisely focused its funding on the kinds of development programs that create economic growth and well-paying jobs in targeted developing countries while also supporting domestic economic and job growth through “Aid for Trade.” These kinds of policies show that an “America First” policy doesn’t and shouldn’t come at the expense of other countries. Smart investments like these can create a rising tide that lifts all boats.
The Trump Administration has already asked some fundamental questions about the basic principles and assumptions underlying US ODA. The American media interprets these questions as ignorance or hostility. These questions and this moment in history may instead represent a special opportunity to rethink, reform, and transform the US approach and the entire system of bilateral and multilateral assistance. As Secretary of State Rex Tillerson and the to-be-named new USAID Administrator consider how to reform the United States’ approach to international development and aid, they would do well to reflect on the tough love of the British Conservative government and take a similarly steely-eyed look. This approach may seem cruel on the surface but may very well save the international system by building domestic support.
This blog originally appeared in the Center for Strategic and International (CSIS) publication.
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