05/19/2010 05:12 am ET | Updated May 25, 2011

A New CGD Initiative on U.S. Development Strategy in Pakistan: What Is It and Will It Work?

This is a joint post with Molly Kinder.

At CGD, we normally conduct research and analysis on development issues (trade, aid effectiveness, climate change, global health), not developing countries. Pakistan is an exception. Motivated by national security interests, the Obama administration is poised to triple its development assistance to Pakistan. The effectiveness of this new U.S. assistance is imperiled by the same governance problems that have undermined the billions spent by the U.S. and other donors in the last 30 years. Given these challenges, how can the new pledges of U.S. aid to Pakistan be implemented effectively, and what, if any, other policy or program initiatives might matter?

To address these questions, we recently launched a new CGD initiative on the U.S. development strategy in Pakistan. As part of this initiative we have convened a study group, comprising leading experts in development economics, national security, aid effectiveness and including several prominent Pakistanis. The study group will meet regularly over the next year to help us prepare periodic open letters to the administration commenting on and hopefully helping improve the assistance program, as well as trade and other U.S. policies aimed at greater security, stability and prosperity in Pakistan.

Why a CGD initiative on Pakistan and why now? U.S. policymakers view Pakistan as one of the most critical fronts - if not the most critical front-in the U.S.-led effort to combat extremism. Explaining that the U.S. cannot secure its interest in Pakistan with "bombs and bullets alone," President Obama pointed to economic development as a central component of his national security strategy in Pakistan, and Congress has authorized $7.5 billion in development assistance to Pakistan over the next five years. This "quantum leap" in new aid resources to Pakistan dwarfs planned spending on other U.S. development initiatives. Will tripling (or even quadrupling) U.S. aid money to Pakistan work - from either a development or a security perspective? Despite huge inflows of assistance from donors and multilateral creditors over the past several decades, Pakistan has made little, if any, progress on the fundamentals of social development and state-building. Today, its democracy is fragile, corruption and patronage are rampant in government, most of its children never complete primary school, and its health indicators lag far behind those of Bangladesh, despite its higher average income.

As one of us documented in an analysis of the World Bank's social sector spending in the 1990s, poverty in Pakistan was higher in 2004 than it was a decade earlier, despite millions of dollars of outside aid spent to support anti-poverty programs in the 1990s. Lessons were eventually learned from the experience, but only after a prolonged period of resisting the real difficulties. At least then and in those sectors, the bottom line was: it's really hard to effectively spend a "surge" of aid money in Pakistan.

The development disappointments of past donor efforts in Pakistan are well documented. But, as study group member Andrew Wilder has pointed out in the case of Afghanistan, there is very little evidence of U.S. aid programs promoting stability or winning hearts and minds, and some evidence that such aid has been counterproductive. Similarly in Pakistan perhaps, at least in the past. Despite more than three decades of U.S. development aid to Pakistan (admittedly interrupted periodically), a 2009 Gallup poll placed Pakistan in a tie for the country with the least favorable view of the United States in the entire world.

That was one issue we discussed at the first meeting of our study group in February, which focused on the administration's s announced Pakistan Assistance Strategy. We plan to release an open letter reflecting on that discussion soon. At subsequent meetings we will address trade, energy, water, job creation, government capacity and other development issues in Pakistan.

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