Ending the Grapes of Wrath Era in U.S. Foreign Aid
There's not a lot foreign about foreign aid
Dear Unlock Aid community,
This week, President Biden published his $7.3 trillion annual budget, which included more than $58 billion for U.S. international affairs spending, including for issues we all agree are important, like climate adaptation, global health, and food security. But as we’ve written before, we’re worried that not enough of that money will actually ever get to where it needs to go. If the past is precedent, well-connected insiders will capture an enormous share of those public resources while communities on the frontlines will not. This bait-and-switch undermines trust in our systems and public institutions.
We made this Follow the Money microsite to illustrate the scale of the problem. As many of our readers know, there’s not a lot foreign about foreign aid.
During a recent interview, Columbia School of Journalism Dean Jelani Cobb reminded listeners of a scene in John Steinbeck’s Grapes of Wrath, when representatives of the landowning bank come to kick the sharecropping Joads off their ancestral plot. The bank employees explain that no individual would ever personally make the same decisions that the bank makes as an institution. The profit motives of the bank supersede the needs of the community.
We’ve been stuck in a Grapes of Wrath moment for a long time when it comes to global development. We know that most of the people who went to work for big aid contractors and government aid agencies did so to serve a higher mission. But they’re stuck in a broken system. Perverse business incentivizes, regulatory pressures, and cultural norms engrained over of many decades drive too much of the aid industry to engage in business practices that cause harm. Too often, we hear the same stories. For example, too many contractors:
Dictate how projects should work rather than taking direction from local leaders, perpetuating legacies of paternalism and colonialism.
Perform work in place of where legitimate local market participants could, distorting markets.
Pay their employees many multiples of local salaries, destabilizing local economies by creating brain drain, inflation, and artificial price bubbles.
Cause smaller organizations to lose enormous sums of money, time, and trust by recruiting them to join their proposals in order to win public funding only to later cut them out of promised work.
Create cutouts of themselves to win government grants and contracts that were targeted for truly local groups, engaging in legal but highly unethical business practices.
Don’t just take our word for it. The U.S. Agency for International Development (USAID), America’s premier aid agency, recently published a report documenting many of these challenges.
As the late anthropologist and public health advocate Paul Farmer said years ago, “We’ve met the enemy, and he is us. We’re the ones asking for those resources and misdirecting them. We all know that that’s not how you train an infection-control nurse or a health manager, with a two-day workshop or a ‘training the trainers.’”
Recognizing that those closest to the problems are closest to the solutions, USAID has been trying to for the past two decades to reform the way it works, including to shift more resources directly to local partners. Its present goal is for at least 25% of total funding to reach such groups. But every time the agency tries to define a “local partner” it runs into trouble. Make the definition too expansive and you create loopholes that enable the aid industry to game the system. Make the definition too narrow and you inadvertently preclude the Ghanaian company from accessing resources because they registered their company in Delaware to attract private investments, for example.
Meantime, behind closed doors, naysayers who disproportionately benefit from the status quo are muddying the process. They engage in “whataboutism,” seeding doubts about local groups while ignoring the fact that USAID’s Inspector General finds that the agency’s legacy contractors fail half the time but get paid in full nearly every time.
It’s a radical double standard. Officials pain themselves to get the 25 percent “local” definition just right, but we’re not applying any such scrutiny to the other 75 percent. If not for the U.S. government and other aid donors, who else would pay for what many of these companies do?
It's not enough for policymakers to reduce discussions about the management of our public resources every year to tired and familiar debates about how much the U.S. should be spending on what priorities. The U.S. needs to be just as focused on who is making those decisions and to whom and to what ends those resources flow.
We have a long way to go to rebuild our global development agencies to deliver results and democratize access to public funding. But to understand where we need to go will require a better understanding of where we are today. That’s why we made this Follow the Money microsite.
Counterintuitive it may sound amid this moment of political division, we need to be ambitious (and idealistic) again. Resistance to change is easy. We often hear about what we can’t do, what we won’t do. It’s time for a new way. The United States could be a better partner. It could get resources to where they’re needed. It’s time for the United States to act like the America that could.
To progress,
Unlock Aid