Avoiding Groundhog Day on US Foreign Assistance
President Trump will soon send Congress his budget for FY 2020, including his proposed spending levels for US foreign assistance. In his first two budgets, President Trump proposed drastic cuts – over 30% – to US aid on global health, education, agriculture, democracy, and other global development programs. Congress has roundly rejected these budgets, keeping US foreign assistance at essentially the same levels.
With support from the Hewlett Foundation, Publish What You Fund decided to take a look at the impact of these proposed cuts. What would happen if these cuts were implemented? Even if Congress rejected the cuts, did the proposed cuts have any impact? What information is available to make such determinations? And, based on our experience, how can foreign aid data and other information be improved?
Over the past 18 months, we researched, interviewed, consulted, and analyzed these questions. We selected four countries for our analysis: Nicaragua, Cambodia, Liberia, and Senegal – all countries of strategic interest to the US and ones where the Administration proposed steep cuts in the FY ’19 budget. We did a deep dive into one sector per country – including desk research, expert interviews, and in-country interviews, so that we could get specific, granular evidence. We talked to a range of stakeholders, including donors, government representatives, program implementers, and civil society groups, and produced four concise reports. Finally, we looked at US aid information from a user’s perspective to assess just how effectively a user could make their own judgements.
The development community is fully expecting the FY ‘20 budget for foreign aid will repeat the FY ‘18 and ’19 scenarios. This makes our FY ’19 findings still relevant and provides Congress with additional arguments to oppose sudden and drastic cuts:
Four Country Studies
Although each of the countries have their own story, there were common themes that emerged:
US assistance often fills a unique role by providing support that no other donor can match. Nicaragua is a perfect example – unlike other donors, the US operates independently of the government and has played a critical role in supporting civil society. A year later, this is more critical than ever, as the challenges to democracy continue to mount and supporting a struggling civil society is more vital.
Sudden and significant cuts can be particularly damaging and can undermine the investments that the US has already made. Liberia, where the US has made significant investments in governance and democracy, is at a critical point. Its election in 2017 was the first transfer of power between political parties, an encouraging milestone for a nascent democracy, but the enormous issues facing a new and inexperienced government means that this is the wrong time to withdraw US support.
US support, even when relatively small, can have a significant impact. Senegal is an important country to the US in terms of regional security, yet assistance is a very small part of the overall US aid budget. Using just a quarter of its Senegal resources, US aid is tackling food insecurity for some of Senegal’s most vulnerable people while simultaneously helping to keep a fragile peace in one region that threatens overall stability.
Proposed cuts can undermine the essential leadership role the US often provides in the donor community. The US is often a leader among donors in its development approach. In Cambodia, it is considered the most influential donor in ensuring that the rights of the most vulnerable are not forgotten in the Cambodian government’s pursuit for broad economic development. As other donors turned to concessional loans, the US is the only major donor to fund entirely through grants. This is important for NGOs seeking funding without government interference, the loss of which could cause NGOs to pursue funding from alternative routes backed by the Chinese government.
Cuts – even if not implemented – have a negative effect and can undermine the US influence. Budget uncertainty creates inefficiencies in program management and wastes resources. Proposed cuts – even when rejected – also undermine the credibility of the US in both its relations with other donors and with its country partners.
Understanding and Improving US Aid Data and Information
The second element of our work was to put ourselves in the shoes of a data user and see what kind of information was available, particularly on our four country studies. As we know from our Aid Transparency Index, the quality of US aid information has improved over time, but significant challenges remain. In this research, we took a very detailed look at the quality and comprehensiveness of US foreign assistance information at the State Department (State), the United States Agency for International Development (USAID), and the Millennium Challenge Corporation (MCC). We produced two in-depth reports with recommendations for improvements:
US Transparency: An Assessment of US International Aid Transparency Initiative Data State, USAID, and MCC all have very useful International Aid Transparency Initiative (IATI) data at the strategic level, but not always at the project level. More specifically, MCC continues its role as one of the global leaders in IATI data, although it could provide more details on its sub-compact work. USAID has made progress since its first publication in 2012, but any further progress will be significantly challenged until it implements a project management system – either the planned Development Information Solution or an alternative. State faces even more problems, with even basic information (project titles, descriptions, and dates) being largely unusable. Unless and until State’s leadership takes its systems problems more seriously, little will improve.
US Transparency: An Assessment of US Foreign Assistance Documents We have just published our final assessment which concerns the documents that users need in order to understand and assess US development work. All three agencies provide good strategic level documentation, albeit at a relatively high level. However, project level documents, so critical for understanding a project’s objectives, approach, and results, is unevenly published. With the exception of some evaluations, State publishes virtually no project level documents. USAID provides a large number of documents, mostly through its Development Experience Clearinghouse, but it is not particularly user friendly and appears to be incomplete for more recent documents. Finally, MCC provides the most complete documentation, although details about its sub-compact projects could be more robust.
The US has made significant commitments to improving its aid transparency with the understanding that better information allows decision makers, journalists, our partner countries, and civil society to have a much clearer picture of where the US is spending its money, for what purpose, and with what result. Strong US commitments, such as the bipartisan Foreign Aid Transparency and Accountability Act of 2016 and publishing to IATI, need a corresponding political commitment to finish the implementation of these promises.
As USAID rolls out its journey to self-reliance – encouraging a longer-term effort to “end the need” for foreign assistance – steep and sudden cuts with little or no strategic justification are especially harmful to US investments and relationships. Evaluating programs and priorities is something that the US should actively do, but it should be based on facts, analysis, and a deep understanding of the role of development and US interests. Congress should once again reject any drastic aid cuts.