U.S. Foreign Assistance and AVSI
Thursday, 25 February 2010 18:29

Many recent events have sparked discussion within AVSI about the role we play in international cooperation and development, in particular in the context of the United States.  As AVSI-USA, we bridge the reality of Europe—and its various expressions of global solidarity and assistance—and the U.S., receiving input from both sides in terms of theory, politics and practice. From our operational base in Washington, D.C. we are privy to the debate about U.S. foreign assistance including the competing objectives, values and consequently modalities for the delivery of aid.

In this first In-Focus contribution, we risk to share a few of our perceptions of the trends in international development radiating out of Washington, DC., and to offer some judgment from the point of view of AVSI, a non-governmental organization whose identity is formed and sustained by its link to people committed to living, freely and maturely, the social teachings of the Catholic Church.

The engagement of our country with the developing world (i.e. poor countries, the “third world”, the “global south”, etc) has a long and varied history. Historically, there have been two main thrusts to this engagement: 1) society’s direct engagement through social services (think child sponsorship, religious and secular missionaries) led by free associations and 2nd) public engagement through tax-payer funded foreign aid. The latter is a product of the twentieth century, following the destruction of Europe and the decolonization of Africa, Latin America and Asia. Since the beginning there has been the tension between idealism/altruism on the one hand (i.e. missionaries motivated by the idea of saving the lives and souls of the poor indigents) and political/economic realism on the other (i.e. the theory of the Marshall Plan that economic recovery in Europe was crucial to U.S. economic growth and national security).

Today, U.S. foreign aid reflects this same tension between the ideals of global solidarity within a theoretical and institutional framework structured more by political interests and constraints.  By working in partnership with non-profit organizations that are expressions of the free association of people, the U.S. government (USG) has the opportunity to pursue a middle ground that is both effective in terms of results and reasonable in terms of political constraints.

Yet our experience in the past years leads us to raise certain questions regarding the way in which the USG works with civil society.  We see a few issues that shape this debate.

First is the framework for foreign aid, and how it is communicated. USAID has recently adopted a new slogan, “From the American People” which goes along with the USAID logo wherever it is printed. We can ask: What does it mean that the funds are “from the American People”? Does this imply that foreign aid is an expression of us as taxpayers in a redistributive, political sense? Or does it reflect the spirit of foreign aid as being delivered by those associations, traditionally non-profit organizations, which are linked directly to the American people and society? We are left asking what happens when for-profit companies enter the scene as significant deliverers of U.S. foreign assistance.

Second is the choice of delivery mechanism used by USAID, the agency most responsible for stewardship of US foreign development assistance. When USAID decides to spend money on a particular country or issue, many decisions are made about how to spend that money, and these decisions have a big impact on the work that is done. USAID’s budget is spent almost entirely on projects that are solicited through competitive mechanisms; in essence, USAID stipulates what kind of project it is willing to fund in varying levels of detail, with varying degrees of input. Another type of mechanism does exist: a window to accept, review and fund unsolicited proposals. Instead of allowing those associations already engaged, on-the-ground, in helping poor and marginalized communities address their own development challenges, most Requests for Applications (RFAs) offer an analytical framework and set of detailed expectations, leaving little flexibility to implementers.

Furthermore in recent years, there has been an increasing use of contracts rather than grants, with important effects.  Contracts, in which the contractor is allowed to charge a profit margin, favor for-profit companies capable of managing large, complex financing mechanisms.  The use of contracts allows USAID to spend money faster and with less administrative costs.  Contracts can and are implemented by non-profit organizations which have grown in size and capacity on par with the international consulting firms.

From our point-of-view, a few things change when foreign aid is delivered through contracts. First, within a contract framework, USAID, rather than the project beneficiaries, is seen as the “client”. The objective of the contractor is to produce the results that the client wants to see. Even with the best intentions, the client, USAID, is looking primarily for attractive numbers to report to Congress in order to continue to receive funding and keep the cycle going. The large contractors may also have good intentions, but many have become so dependent on USG project funding that their business bottom-line of profit and growth is entirely linked with successful bidding of new contracts.  Is it possible in this case that the needs of the beneficiaries, i.e. the poor and vulnerable the projects are intended to serve, can remain the focus of the project?

Second, a contract between the USG and a private for-profit company alters the meaning of foreign aid “from the American people.” The for-profit sector of international development consulting would present arguments of efficiency and effectiveness, but they never address the issue of how USAID reliance on contractors impacts the link between the American people and the people of the world. What changes if our public resources are being spent by firms that don’t have a link with a living constituency among the American people? And on the other side of the coin, do American NGOs still offer this alternative?

To a large extent, it seems that the room for smaller private organizations to participate in USG financing for development is shrinking. One way of understanding this context is that the government is simply erring more on the side of realism and numbers, opting to exert more control over the use of its foreign aid budget in order to “ensure” accountability and results according to politically defined objectives. How much is this motivated by a dwindling trust in our own people, society? Or are politics and bureaucracy the driving forces?

Within this context, AVSI hopes to offer reflection on our experience and to propose what we have encountered and perceive as a concept of development that is anchored in the truth of human nature, as made evident in a particular method of working.  More on this in our next In-Focus.