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Poverty-focused Development Assistance

An increase in U.S. development assistance is essential to help meet the urgent needs of the poorest countries.

Countries struggling with extreme poverty do not have the resources to adequately finance their own economic and social development.

U.S. development assistance has made a big difference to millions of people in poverty. A well that provides clean drinking water for a village may cost a few hundred dollars, but the benefits far exceed that sum in terms of improving people’s health, increasing the productivity of workers, and allowing girls to attend school rather than walking hours each day to find other sources of water.

'We Know What's Best for You'

Just as important as more spending on development is better spending. What does “better” development assistance mean? A key element is allowing developing countries to have more say in how U.S. assistance is used. Currently, priorities are largely determined in Washington, D.C. When given the opportunity to express their own priorities, poor countries opt to put resources into agriculture and infrastructure.

Dictating priorities from Washington runs counter to what we know about how to deliver effective assistance. “We know what’s best for you” doesn’t help countries move toward self-reliant, sustainable progress on hunger and poverty. Making sure recipient countries can participate in deciding where and how their assistance is used will get better results.

Understandably, U.S. policymakers and the public worry about corrupt governments absconding with resources meant to help poor people. But there is little chance of this happening the way U.S. assistance is currently administered: project-focused (for example, building a school, providing HIV drugs) and implemented through contractors, international nongovernmental organizations (NGOs) such as CARE, Catholic Relief Services, and World Vision, or the many qualified local NGOs that have been vetted.

Recipient governments are generally not involved, except that they are expected to guarantee sustainability once the NGOs step aside. Cutting out the host country at the start may help ensure that corruption is minimized, but it also makes it difficult—if not impossible—to achieve sustainability and scale up successful development projects.

Working with and through governments, while often more time-consuming and difficult to coordinate, is more effective in building needed capacity and ensuring that the results are greater than the sum of individual efforts. There will be exceptions—for example, countries with urgent humanitarian needs whose governments have indeed proven corrupt. But full consultation and participation of host governments should be the goal.

Assistance Needs to be Flexible

Better assistance also means accepting more flexible uses of resources. U.S. development assistance is structured to address specific issues and accomplish projects with set parameters, so budget accounts are set up to channel program funds into specific line items.

Examples of these accounts are Food Aid, the Millennium Challenge Account (MCA), the President's Emergency Plan for AIDS Relief (PEPFAR), and Child Survival and Health. The rules are rigid: Once money goes into the PEPFAR account, for example, it can be used only for expenditures that fit PEPFAR criteria for fighting HIV/AIDS. PEPFAR does good work, but one of its shortcomings is this lack of flexibility.

As one doctor explained, “Once we get people on medicine, we’re able to get them out of bed and back on their feet. But soon we realize they haven’t got any food, and the success of the drugs depends on good nutrition. We do what we can to get them some food, but then we realize they haven’t got any income to purchase food on their own.”

In a perfect world of development assistance, there would be programs with the mandate and resources to work with people with HIV to help them earn income to buy food and other necessities. But this isn’t the case. Right now, PEPFAR funding dwarfs all other development accounts.

We could simply lament the lack of money for nutrition assistance and income-generation activities, or we could press for U.S. development assistance programs to become more flexible. HIV/AIDS is a serious threat in Africa and around the world. But treating it strictly as a health problem misses its multiple impacts.

The Problem of Earmarks

Development assistance is also a specific account in the budget, a catch-all that may be used for a range of issues, including agriculture. The problem is that the funds in the development-assistance account are completely inadequate for the task of promoting broad-based, sustainable development.

The development-assistance account has been hobbled by indiscriminate earmarking by members of Congress. Earmarks are used to direct assistance to specific programs or countries. They turn the budget process into a struggle over which program or country can get the biggest and strongest earmarks.

The earmarks are invariably well-intentioned and perhaps individually justifiable. No one would argue that assistance for potable water, microfinance, childhood immunization, women’s education, or biodiversity is not worthwhile. But there is an “opportunity cost” to every earmark. Because the development assistance account is so limited, mandating more funding for microfinance, for example, means that other worthwhile programs have to make do with less.

Further reading

Child Hunger Chart / by Doug Puller

What's in the "basket" of Poverty-Focused Development Assistance (PFDA)?

Bread monitors accounts within the federal government's International Affairs Budget (called the 150 Account), which fund programs that touch on hunger and poverty.

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