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The Future of Funding: Development Aid as an Investment

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There is an intriguing dynamic developing in our nation's capital among the three major influences that could end up changing the future of American aid to developing countries.

One is Congresswoman Kay Granger from Ft. Worth, TX. Another is Rajiv Shah, Administrator of the US Agency for International Development (USAID). And then there is the Chicago Council on Global Affairs that has assumed the role of arbiter of the quality of the U.S. government's leadership in global agricultural development. Each of them has the power to exert enormous influence over the gristmill through which government funding is pulverized into short and long term support.

Congresswoman Granger set the table recently at a luncheon when she praised Bill Gates and his foundation as a model for serving the world's poorest. "Foreign aid must be viewed as an investment, not an expense," she said. "Where money is wasted, it should be stopped. Where funding is ineffective, it should be redirected.

"But when foreign aid is carefully guided and targeted at a specific issue, it can and must be effective. Bill Gates has shown us that investments overseas can produce a strong return."

What made the Congresswoman's words so resonant is her position as Chairwoman of the State and Foreign Operations Appropriations Subcommittee. By recognizing that well managed programs are an answer to critics who consider foreign assistance to be throwing good money after bad she opened a portal through which her colleagues in the Republican Party will be able to navigate the tricky world of development aid.

If it becomes widely recognized that it is in the self-interest of the United States government to underwrite productive investments in emerging economies it is likely that others in Congress will look to her for leadership in creating a template that builds "political will" strong enough to fuel robust funding for results-driven programming like the administration's marquee agricultural initiative called Feed The Future.

Shah, a rising star in Washington, DC, is a once-in-a-generation visionary who is driving innovation at the Agency for International Development, which has the manpower, the know-how and a professional staff that is tough and smart. What they've needed is a show runner and now they've got one. But, the funding is drying up, so every dollar is being revisited.

Indeed, as he left the stage at a major symposium on agricultural development last year Shah tossed off a line imploring the audience to demand that his agency perform with efficiencies that would merit distinction within the federal bureaucracy. He did so with an earnestness that underscored his determination to lead his team into a new era of productivity.

"Hold our feet to the fire," he said, and Marshall Bouton took him up on it. Bouton, President of the Chicago Council on Global Affairs, was already working on a follow-up to its 2009 seminal report on renewing American leadership in agricultural development. Shah's feet/fire remark wrapped that analysis in a bow.

In May 2011 the Chicago Council published its report card on the first two years of the Obama administration's effectiveness in addressing 21 key issues identified by the Council that it considers essential for rebuilding U.S. support of agricultural development in Sub-Saharan Africa and South Asia. It gave the federal government an overall grade of B- for securing food availability in those two regions.

The report had a decidedly positive tone, despite criticism that the scope of work was too narrow, that USAID has not tapped into the enormous intellectual property represented by land-grant universities that have excellent agricultural colleges, and made the point that there should be greater involvement by the private sector. Other shortcomings were attributed in large measure to a lack of adequate funding. But, it marked progress for the first time in decades.

Granger's investment remarks, Shah's feet to the fire challenge, and Bouton's report card sound a lot like the rhetoric clamoring up from town squares since an energized voting public took a renewed interest in how its government has been spending money. This tri-partite movement is being driven from the top of each organization at the same time that the philosophy behind it is being embedded in grassroots organizations throughout the political system. It's hard to see how it is going to be ignored.

Certainly, not every dollar of aid will be used productively, nor is it expected to be. There has to be experimentation and, as every farmer knows, nothing is harder to fathom than Mother Nature. But, Marshall Bouton knows what progress looks like. He'll bump a grade point for more effective leadership and better communications. He'll give extra credit for trickling down to smaller U. S. businesses the government's efforts to help access foreign markets. USAID will earn a better grade from the Chicago Council if it demonstrates a tendency to engage new participants instead of continually procuring services from the same cadre of NGOs and private sector members that they continually engage.

Congresswoman Granger and her colleagues know what effective management looks like. Sitting in hearings with bureaucrats making excuses for poor oversight must sound like screeching inside their heads as testimony drags on. On the other hand, reviewing systems that produce results oriented outcomes like those proposed for Feed The Future may neutralize the instinct to throttle mission directors at USAID who are not vigilant about how the peoples' money is spent.

Ultimately, it will be the private sector in collaboration with government agencies that have learned how to emulate the kind of return for which Congresswoman Granger complimented the Gates Foundation that will drive the success of foreign aid of all kinds. Collaboration being the key concept. The private sector can't do it alone and the bureaucracy doesn't know how to do it without guidance. Private capital needs a well-heeled partner to share the risk, open doors, front run confounding cultural barriers. So, synergies and partnerships can feed off each other to produce much more cost effective results.

Government agencies need innovative managers who can solve practical problems quickly, and who can build systems from the ground up. They need people who know how to answer phones and return phone messages, who understand how the private sector thinks and can get a job done. They need to embrace the ingenuity of American enterprise, not alienate it.

It is all quite simple actually. Advocates of global development aid have the best chance of building a base of sustainable support if they can convince the vast federal bureaucracy to become familiar with two old expressions that are likely to dictate its future funding:

"To get something you never had you have to do something you've never done."
But,
"If you keep doing what you're doing you're going to keep getting what you've got."

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I have an informal relationship with USAID.
I have written for the Chicago Council on Global Affairs.