House Oversight Committee questions USAID over accountability for aid going through foreign governments

Excerpt:

The U.S. Agency for International Development appears to be in for a tough time defending its pursuit of country-led development: Three Republican congressmen are demanding assurances that channeling more aid through country systems will not compromise accountability, transparency and effectiveness.

In a letter to USAID Administrator Rajiv Shah, the chair and two members of the House Committee on Oversight and Government Reform expressed concern that “funneling grants directly to unaccountable and often corrupt foreign governments without necessary safeguards will reduce program effectiveness, accountability, and transparency and waste taxpayer dollars.”

Republican Reps. Darrell Issa of California, Jason Chafettz of Utah and James Lankord of Oklahoma have given USAID until May 8 to explain in detail its plans to channel more aid directly to recipient governments and non-U.S. organizations.

Questions raised by three congressmen include:

• How can USAID ensure foreign governments and nongovernmental organizations that will receive direct U.S. funding will be subject to the same standards of accountability and transparency imposed on USAID contractors?
  
  
• How will USAID maintain oversight of local firms and NGOs?
  
  
• How can USAID guarantee channeling 30 percent of aid through country systems will be as effective and responsive as the current contracting process?

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Adding clarity to the country systems debate

By Richard McCall on 07 March 2012

DevEx Blogs

Excerpt:

While most modern nation-states have gone through the creation of institutions at all levels of society, most developing countries have not. Citizens in many of developing countries have not had the opportunity to participate in what is termed constituting processes — the creation of institutions at all levels of society. It is a highly participatory process where common values and rules are identified and agreed upon and institutions that reflect fundamental societal consensus are created. This process allows members of a group to include their cultural and traditional values in a governing conflict. The process of institution building at all levels of society transcends the divisive nature of localism or communalism, whether ethnic or sectarian. Institutions reflect the accepted rules of the game, clearly defining individual rights and responsibilities within the broader community of interests.

Does country-led development mean government- or elite-led, or should it mean broad societal ownership of the development process?

It should be the latter, and it should reflect inclusive, social, economic and political institutions which are fundamental to sustainable outcomes. It is within this context that certain elements of USAID Forward and other donor initiatives that emphasize the use of country systems should be evaluated. Will direct investment in weak institutions and organizations that are not yet capable of effectively or transparently utilizing these funds enhance effectiveness and accountability? We know the answer is no. Just as importantly, does the use of country systems and country-led development reflect broad societal ownership of the systems and institutions? If the answer is no, the outcomes will not be effective, accountable or sustainable.

Weak and noninclusive social, economic and political institutions are the major obstacles to development. Donors all too often focus their engagement with development partners on sector strategies, giving short shrift to inclusive institution building. Priority should be given to the latter in order to enhance the sustainability of the former. Therefore, donors should have an expansive definition of what constitutes country systems beyond national government systems which may be disconnected from most elements of society. The focus should be on the breadth and depth of systems of governance and institutions of governance that are locally rooted, which, in turn, are tied to regional and national systems. This is the principle of self-rule through shared rule.

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Four CIDC Members Awarded First-Ever USAID Excellence in Evaluation Honor

International Development Companies:
Leading the way on evidence and evaluation

"The discipline of development demands a strong practice and use of evaluation as a crucial tool to inform our global development efforts and to enable us to make hard choices based on the best available evidence."

                                                                                       - USAID Administrator Rajiv Shah

Four of the five projects selected by USAID for the agency’s first-ever Excellence in Evaluation honor, awarded in November and the focus of an agency-wide event in February, were designed and implemented by CIDC member companies: Abt Associates, Development Alternatives, Inc. (DAI), Management Systems, Inc. (MSI) and University Research Co., LLC (URC).

With the release of USAID’s Evaluation Policy in January 2011, USAID made an ambitious commitment to quality program evaluation - the systematic collection and analysis of information and evidence about program performance and impact. USAID uses evaluation findings to inform decisions, improve program effectiveness, be accountable to stakeholders, and support organizational learning. Awards were given based on reports that provided the most detailed description of the methodology, so the soundness and rigor could be examined, and whether the findings were clearly linked to the evidence and based on fact, rather than opinion.

Brief descriptions of each assessment conducted by the four CIDC member companies that were awarded the Excellence in Evaluation honor are as follows:

Abt Associates
Extending Social Insurance to Informal Sector Workers in Nicaragua via Microfinance Institutions: Results from a Randomized Evaluation 

Abt Associates evaluated an insurance program for low-income workers in Nicaragua. By randomizing incentives to enroll in the insurance program, the researchers were able to get an unbiased picture of the effect of the insurance on health care utilization and out-of-pocket spending.  Focus group discussions provided additional insight into what worked and what did not in the program’s implementation.

In Nicaragua, private health care providers used the findings to begin improving health plan offerings to low-income workers.  Additionally, INISER, the largest insurance company in Nicaragua, used the findings to develop a comprehensive micro insurance strategy. Results were also published in the journal Health Economics.

The evaluation was conducted as part of the global five-year Private Sector Partnerships for Health-One (PSP-One) project and was funded by USAID with co-funding from the Global Development Network.

DAI
PROFIT Zambia Impact Assessment 

Although a new generation of private sector development programs has received significant investment over the past decade, few high-quality impact assessments have been conducted to provide guidance on designing and implementing future projects based on lessons learned. Aimed at economic growth for low-income groups and individuals, these programs often involve promoting the competitiveness of selected industries or value chains in global and domestic markets while increasing the participation of, and benefits to, farmers and other micro and small enterprises.

Contracted by USAID to evaluate the Zambia Production, Finance and Improved Technology (PROFIT) project, DAI measured the results of three Zambian project interventions that involved large numbers of smallholders: retail distribution of agricultural inputs and services, beef and cotton. The goal of PROFIT was to increase multi-sector growth to ensure poverty reduction at the household level, and exemplified this new generation of economic growth projects. Through a longitudinal, quasi-experimental design implemented through a mixed-method approach, DAI offered invaluable insight into lessons learned to improve the design and implementation of the new generation economic growth programs in Zambia and throughout the globe.

MSI
From Aid to Trade: Delivering Results

A team of evaluation experts from MSI and the University of Pittsburgh evaluated and concluded that USAID and U.S. government programs have contributed significantly to trade capacity building (TCB). The report found a clear link between the delivery of U.S. foreign assistance and increases in the value of recipient country exports.

The study separately examined USAID trade assistance focused on private sector export expansion, trade policy reforms, increased participation in trade agreements, and efficiency gains from trade facilitation assistance. The evaluation determined that each additional $1 invested by USAID increases the value of developing country exports by $42 two years later.

MSI’s “From Aid to Trade: Delivering Results” report was also presented this past summer at the WTO’s Third Global Review of Aid for Trade. USAID’s Deputy Administrator for the Bureau of Economic Growth, Agriculture and Trade, Eric Postel, led the U.S. delegation and discussed the evaluation results.

URC
Results of Collaborative Improvement: Effects on Health Outcomes and Compliance
with Evidence-based Standards in 27 Applications in 12 Countries

Through the USAID Health Care Improvement Project, University Research Co., LLC (URC) evaluated the results of 27 health care improvement interventions in twelve countries to determine whether a quality improvement method widely used in the U.S. called collaborative improvement is also effective in low- and middle-income countries. 

URC’s research team looked at data on interventions carried out over a 10-year period  and measured the magnitude and duration of improvements achieved through collaboratives addressing diverse health services, such as maternal, newborn, and child health, HIV/AIDS care, family planning, and malaria and tuberculosis diagnosis and treatment. A distinguishing feature of the evaluation was that it drew on results achieved in a range of health systems: Benin, Bolivia, Ecuador, Guatemala, Honduras, Nicaragua, Niger, Russia, Rwanda, Tanzania, Uganda, and Vietnam.

The study showed that many health care processes can be readily improved, even in low-resource settings.  Of the 135 time-series charts evaluated for more than 1300 teams of health workers, the study found that nearly nine out of ten teams attained performance levels (measured as compliance with standards) of at least 80%, while two-thirds reached at least 90%, even though over half of the teams had a starting performance level of 50% or lower.

“This multi-country study provides the largest body of evidence yet published on the effectiveness of collaborative improvement in lower and middle-income countries,” said Dr. James Heiby, Medical Officer in the USAID Global Health Bureau. “We still have a lot to learn about improving care in these health systems, but the average level of improvement achieved across 27 different settings suggests remarkable potential; much wider use of improvement methodologies like this appears to be feasible.”

Sen. John Kerry opines in WSJ: "The Conservative Case for Foreign Aid"

Reagan knew that diplomacy and evelopment policy neutralize threats before they become crises.

Wall Street Journal Opinion

By John Kerry, Published February 29, 2012

Cutting foreign aid has always been a guaranteed applause line on the political stump. There are no global Grover Norquists pushing a pledge not to slash the State Department budget, nor are there millions of AARP seniors rallying to protect America's investments overseas. President Reagan once summed it up succinctly: "Foreign aid suffers from a lack of domestic constituency, in large part because the results of the programs are often not immediately visible and self-evident." And today, with the national debt approaching $14.7 trillion, Americans rightly demand fiscal responsibility.

Yet efforts in Congress to cut billions from the president's proposed budget for the State Department and the U.S. Agency for International Development (USAID) are short-sighted. While it is true that our economic strength at home determines our strength in the world, it's also vital to deal with our current fiscal challenge intelligently. After all, we can't be strong at home if we aren't strong in the world.

President Reagan wisely reminded us when talking about security assistance programs that these efforts are "an essential complement to our defense effort" and "directly enhance the security of the United States." Reagan knew that diplomacy and development policy neutralize threats before they become crises; manage crises if threats escalate; and assure security and stability after conflicts are resolved, all at a fraction of the cost of military deployment. As former Secretary of Defense Robert Gates once pointed out, if you took the entire Foreign Service roster of American diplomatic personnel, you could barely staff one aircraft carrier.

President Obama's new request for international-affairs work comprises a mere 1.5% of his budget. Is there a cost to taxpayers? Of course. But all of our foreign aid programs and foreign policy initiatives—from sending diplomats to Afghanistan to helping reverse the HIV/AIDS epidemic in Africa—cost less than one-tenth of our annual military expenditures.

There's nothing fiscally conservative about starving our foreign policy budget of a billion dollars today only to spend a trillion dollars years later in armed conflict. Every day, the State Department leads operations that strengthen our security. Diplomats and development experts support counterterrorism efforts in countries like Yemen, Somalia, Pakistan and Afghanistan. Programs to destroy caches of small arms, shoulder-fired missiles and mines deprive our enemies of the tools they might use to attack us, our allies and our partners. Teaching foreign military officers American values and skills creates additional defense capacity so that we can fight together, with burdens shared equitably.

Training foreign law-enforcement and counterterrorism officials in American investigative techniques increases their capability and our security. Crucially, implementing stricter export controls, training international weapons inspectors, and securing our borders allows us to guard against that most pernicious of threats: terrorism by weapons of mass destruction.

Our global presence does something else: It creates jobs. Through our contributions to international financial institutions like the World Bank, we don't just lift the economies of low-income countries but we open markets for American businesses.

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CIDC Comments on FY13 International Affairs Funding as Secretary Clinton Heads to Capitol Hill

Washington, DC – As Secretary of State Hillary Rodham Clinton prepared to address House and Senate authorizing and appropriations committees today and tomorrow on FY13 international affairs budget needs and priorities, the Coalition of International Development Companies (CIDC) released the following statement on behalf of its 55 member companies:

“As Congress begins deliberations over how best to deliver effective foreign aid amidst significant economic challenges, CIDC urges members of the Senate and the House to remember the profound importance of robust development assistance programs to America’s national and economic security. We certainly understand the reality of current fiscal constraints and spending caps; but we also believe the U.S. must continue making smart, targeted investments that support national security and are critical to the long-term growth of our own economy.

“Furthermore, CIDC applauds the fact that the Obama Administration’s FY13 international affairs budget request reaffirms the government’s commitment to continuing our strong progress in combatting poverty and disease in developing countries over the past decade. We also strongly support the administration’s focus on assistance reform, as we are leaders in providing cost-effective results for American taxpayers and building competitive free markets around the world. We would simply ask the Congress to carefully review certain elements of the USAID FORWARD initiative; it seems that in pursuit of improved effectiveness and accountability, USAID may actually be engendering the opposite: a preference for direct investment in foreign governments and institutions that are not yet capable of effectively or accountably utilizing those funds. We also ask the Congress to examine USAID’s growing preference for grants over contracts, even when contracts would clearly be more effective, transparent and accountable.

“In the current economic and political environment, it is more important than ever that foreign aid be delivered in a cost-effective, accountable and transparent manner. As lawmakers grapple with difficult decisions over how best to spend scarce taxpayer dollars, we urge them to focus not on who performs development work in foreign countries, but rather on how well the work is done and whether it endures. In a nutshell: We ask them to support policies and programs that maximize competition.”