The Future of USAID

(Photo: Paul Riismandel)

Foreign Policy has published an interesting interview with Rajiv Shah, a United States Agency for International Development (USAID) administrator and former Gates Foundation employee.  Here’s Shah on his efforts to bring a business-like mentality to USAID:

I’ve tried to bring that business-like rigor and the tendency to ask questions — some would say I ask far too many questions — to make sure that when we’re spending taxpayer resources, we’re doing it with that absolute focus that we are making an investment against generating a result.

Shah also comments on the organization’s new “partnerships” with corporations like Wal-Mart and Coca-Cola:

One of the big failings in food security in particular has been a lack of working with the private sector effectively. For instance, in Honduras and Guatemala our work with Wal-Mart is reaching more than 15,000 farming families. In that case, the farmers are producing potatoes and onions, and Wal-Mart works with farmers on training and preparation. They also provide guidelines that help farmers determine what to grow and when in order to sell to Wal-Mart. This type of engagement has led to a doubling and tripling of farmers’ household incomes. Yet over the last several decades, it’s been controversial to have companies like Wal-Mart in the development solution. I think it is the kind of long-term development program that is needed to succeed at scale over time.

And on “doing well by doing good” (the topic of a recent Freakonomics Radio podcast):

In the coming years, Africa is going to be a 900 million-plus person common market that is growing three times faster than the global economy. China has been making a big investment in Africa, and we’re going to want to make sure that American enterprises are part of the picture as well.Ten of the largest 15 trading partners we have were foreign aid recipients. South Korea was a major recipient of U.S. aid for decades, and today we have more jobs created in the U.S. because of our trade relationship with South Korea than we do with France.


Erik Dallas

It has been nice to see the USAID move beyond the disaster Band-Aid approach, to actually have a longer term development oriented agenda. Rajiv Shah seems to have a more effective vision combined with the business management skills to measure progress and keep the USAID on track. Although it was not talked about in this interview, I know that they are also funding project to broaden legal training in Law Schools around the world. This plays well into the multitude of economic research that has linked some measure of rules of law to successful economic development. For example the two quite different prospective distilling visions derived from this economic development research presented in Acemonglu & Robinson’s “Why Nations Fail” and DeSoto’s “The Mystery of Capital” both include variations on rules of law in their different prescriptions for successful economic development. I am glad that USAID has strong leadership to take their mission, that spends < 1% of our tax dollars, to the next level.

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pat cardiff

As is often the case, the empiricism of the moment changes the definition. This is the case of USAID groping for its real reason for existing. Assume that wars were not in the way, and you have a stable Third World county, capable of self-sufficiency in food production albeit not dynamically provisioning its people with new-worldly things. When USAID tells Botswana to grow more onions for McDonald’s, USAID moves into the cheap labor exploitation business. WalMart and Coca-Cola will find other examples for contention. The Agency for International Development conceived in the era of "doing good because it's the right thing to do" will lapse into simple complicity, second-better, needing the conventional tax justification that lately substitute for courage. Why not let committed idealists try new things before the market destroys all pretense of cultural interaction. Why not design and define success as connection? And yes, you right-wingers, this connection costs money - but we have so much more of it to throw away.

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