The U.S. Agency for International Development (USAID) is a U.S. government agency that has been charged with the provision of technical and other assistance to developing and, more recently, transitional countries around the world. It is an independent government agency, headed by the administrator. The secretary of state (that is, the Department of State) provides foreign policy guidelines and the Agency works closely with the State Department, both in the United States and abroad. USAID missions are often attached to U.S. diplomatic missions and the officials are provided with full diplomatic cover.
USAID’s work is focused on the promotion of democracy and furthering of free markets (market economy) and enabling citizens of the foreign countries to make a better living. In achieving the former task, USAID is supporting the U.S. foreign policy goals (promotion of democracy and free markets).
The Agency was set up by an executive order of the then U.S. president John F. Kennedy, following the promulgation of the Foreign Assistance Act, in 1961. It is believed that the roots of USAID are in the post– World War II assistance to Europe, especially through the Marshall Plan, from which a number of countries in the Western Hemisphere that were severely affected by World War II benefited greatly. Similarly, President Harry S. Truman’s Point Four program has contributed to the changing perception of the U.S. role in international affairs and rebuilding war-torn Europe.
Upon the completion of the activities under the auspices of the Marshall Plan, the U.S. Congress created the Mutual Security Agency in 1951, and in 1953, the Foreign Operations Administration to consolidate economic and technical assistance on a worldwide basis. In 1954, the International Cooperation Administration (ICA) was established. The newly formed ICA managed aid for economic, political, and social development purposes. ICA was not independent in delivering its tasks and it had been noticed. Also, at those times, major players in the foreign development assistance arena were multilateral donor organizations, primarily the United Nations (UN).
The Mutual Security Act promulgated in 1954 introduced the concepts of development assistance, security assistance, a discretionary contingency fund, and guarantees for private investments. And the 1957 revisions of the Mutual Security Act provided the legal framework for the development of the Development Loan Fund (DLF), which enabled ICA to become a lender as well. However, all the organizations that dealt with international assistance failed to provide for long-term sustained growth; it was necessary to reform the system of U.S. government foreign assistance, and in 1961, USAID was formed and major negative remarks on the position and powers of the previous aid agencies were addressed, making USAID prone to be more successful from the very outset.
USAID as a government agency is bound by U.S. foreign policy and its work is based on three pillars: (1) economic growth, agriculture, and trade; (2) global health; and (3) democracy, conflict prevention, and humanitarian assistance. USAID supports long-term and equitable economic growth and advances democracy through its work. The Agency’s budget is roughly 0.5 percent of the U.S. government budget, but it is seeking new forms of public-private partnership and now works in collaboration with more than 3,500 voluntary and nongovernmental organizations that are interested in the advancement of human conditions in foreign countries and uphold the values promoted by U.S. foreign policy.
Historically, USAID had an unchallenged position in providing foreign assistance beside some special programs executed by the Department of State. Now, the U.S. foreign assistance picture is more complicated, as former president George W. Bush had set up the Millennium Challenge Corporation (MCC) as a U.S. government-owned corporation, and the Office of the Global AIDS Coordinator. MCC was established in 2004 to work with the poorest countries in the world, upholding the position that (foreign) aid is the most effective when it reinforces good governance, economic freedom, and investments in people.
As it has proven to be rather complicated to coordinate efforts by a few government-sponsored agencies, as a part of the recent (2006) reform of the U.S. foreign assistance program, the post of the director of foreign assistance has been created. The post is charged with ensuring the efficiency and effectiveness of U.S. foreign assistance and provision of “value-for-money” models, where the taxpayers will be satisfied with the outputs and outcomes achieved through the spending of public money in assisting foreign jurisdictions. The post is also to ensure better alignment between the Department of State and USAID, and between all payers in the foreign assistance field in the United States that are funded from the public coffers.
The very environment in which international development assistance is provided has changed. While in the past, international and regional organizations were major donors and provided technical assistance, now the national development agencies play a major role in providing assistance. Most Western democracies will have a government agency with the remit similar to USAID, or if the independent body does not exist, there will be foreign assistance programs operating from within the foreign ministries.
USAID operates in five geographic theaters: Europe and Eurasia, sub-Saharan Africa, Latin America and the Caribbean, Asia, and the Middle East. Although there are regional initiatives that cover a few countries, most of the projects are single-country based. However, the fact that the project is single-country focused does not mean that USAID will not collaborate with other donors, but more that the project will be country specific and country monitored.
At the moment, a new U.S. model of foreign aid and assistance is emerging with a multitude of players covering the particular target countries. It seems that USAID will continue to play a pivotal role in that model.
- Dammann, My 17 Years with USAID: The Good and the Bad (Llumina Press, 2003);
- Jess T. Ford, Foreign Assistance: USAID and the Department of State Are Beginning to Implement Prohibition on Taxation of Aid (U.S. General Accounting Office, 2004);
- Gregory D. Kutz, Financial Management: Sustained Effort Needed to Resolve Long-Standing Problems at U.S. Agency for International Development (General Accounting Office Reports & Testimony, 2003);
- Maren, The Road to Hell: The Ravaging Effects of Foreign Aid and International Charity (Free Press, 2002);
- A. Picard et al., Foreign Aid and Foreign Policy: Lessons for the Next Half-Century (M. E. Sharpe, 2007);
- Riddell, Does Foreign Aid Really Work? (Oxford University Press, 2007);
- Charles H. Teller, “Lost Opportunities and Constraints in Producing Rigorous Evaluations of USAID Health Projects, 2004–7,” IDS Bulletin–Institute of Development Studies (v.39/1, March 2008);
- S. Agency for International Development, www.usaid.gov (cited March 2009).
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