USAID: Shifting Development Gears

While it is still is a question if USAID will be a cutting edge actor in development in the years to come, the administrator Dr. Rajiv Shah is all set to forge new directions for the agency. From taking the lead on the Feed the Future initiative to internal reforms within USAID, Dr. Shah during the past year has taken a number of steps to position U.S. development efforts as a critical and dynamic component of U.S. foreign policy.

In a recent speech (pdf), hosted by Center for Global Development CGD (video here), Dr. Shah unveiled several aggressive reforms in how U.S. development efforts are implemented and discussed the transformation of the USAID into a “modern development enterprise”. As the beginning of the modern development enterprise, Shah declared reforms in evaluation policy and USAID’s new position towards contractors and implementers.

One of the major reforms highlighted in the speech was the introduction of a new evaluation policy which requires a performance evaluation by independent third parties, not by the implementing partners themselves, for every major USAID project. Besides evaluating impact and reporting results, the new reform goes further to collect baseline data and employ study designs that explain the condition before intervention. Furthermore, the agency plans to release all evaluations within three month of completion and integrate some data into its new Foreign Assistance Dashboard.

As an effort to synchronizing grant making and contracting procedures, from now onwards all grant and contract extensions in excess of $5 million that are being awarded without a competitive process will require personal approval by the USAID administrator. According to Shah, administrative and procurement changes, as well as contract management improvements could lead to hundreds of millions of dollars in savings. Emphasizing on the same, Shah in his speech proclaimed:

Photo Courtesy: MEFA

“This agency is no longer satisfied with writing big checks to big contractors and calling it development.”

Presenting Senegal as an example, Shah emphasized on the role of local public and private sectors in sustaining development activities. He said:

The African country is one of the 20 priority USAID sites in its Feed the Future program. The goal is to construct an agricultural development program based on rice and dairy products. And to have impact, there must be a partnership with the government and with private-sector investment that will reach, hundreds of thousands of smallholder farm households.

Irrespective of the endeavors proposed by the lead administrator, it is too early to mention if the new business model will resonate with the aid community and Capitol Hill. Every change comes with challenges. As CGD mentions in its blog, one of the core challenges for this reform would be to deal with cuts in foreign aid programs in the near future. Similarly, on the evaluation front, the challenge is not to simply publish the evaluation result but to be able to use it for decision-making.

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2 thoughts on “USAID: Shifting Development Gears

  1. ipeanddevelopment January 31, 2011 / 12:30 pm

    It will be long before the US can reform USAID or its aid policy. American sentiment–public and politicians–has never favoured aiding the global poor but rather will continue to subject it to destructive neoliberal actions. Even the UK, while a proponent of neoliberalism, has a high rated aid agency.

  2. Gordon O.F. Johnson January 31, 2011 / 8:59 pm

    On project evaluation by third parties, the policy sounds good, but it all depends on the knowledge and experience of the third parties. In my own personal experience as a contractor to USAID in the late 1980s, the evaluators knew very little about the process of privatization, a word that was not in the dictionary when we started up at the end of 1984. The evaluation of our first privatization project, in Honduras, was completely lacking in any real understanding that privatization is really a country process, not a single project. They arrived with their own generic model of project management, and reviewed our work in Honduras according to that model. They devoted little attention to the situation and showed little understanding of the problems to be dealt with, the project objectives, or the results and seemed to have their own agenda to further their own image. With three years of on-site experience with privatization under our belts when they arrived, we knew a great deal more about privatization than they did, but their evaluation pretended the reverse. We should have been given at least an equal opportunity to evaluate our work against our original objectives and the learning acquired as the work progressed and thus provide a realistic alternative, not just a limited response, to the outsider’s evaluation.

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