President Obama unveiled key changes in how the U.S would distribute foreign assistance last week. Not least among the changes will be providing U.S. assistance directly to recipient-nation governments under the presumption such “direct assistance” will build that nation’s economic capabilities faster and better than the use of grants or contracts to development firms and non-profit organizations does today.
However well intentioned this effort may be, it does not account for some of the avoidable risks and obvious dangers attached with making cash transfers to nations that are receiving assistance precisely because they lack the governance structures required to effectively grow their economies, educate their populace and otherwise provide for the poorest of the poor in their nations. Nor is the presumption behind shifting toward direct assistance grounded in fact, as there is no evidence that implementing partners are not effective in achieving U.S. development goals through grants or contracts.
But, as they say on Reading Rainbow, “you don’t have to take my word for it.” Just pick up September’s edition of Service Contractor and you’ll find an in-depth explanation on the risks of direct assistance written by development professional Tonya Giannoni, chief operating officer of DevTech Systems and a tri-chair of PSC’s International Development Task Force.
The piece explains how the failures of U.S. direct assistance efforts in the 1970s and 1980s provide valuable lessons learned about why direct assistance isn’t the only, or even the best, way of building what is known as “local capacity” today. In short, Giannoni explains that then, like now, neither the recipient nations nor USAID had the management expertise to ensure money was spent in a way that achieved results. By contrast, the contracts and grants funding models that emerged in the 1990s and 2000s have proven successful because the U.S. government has direct control over and visibility into how implementing partners use funds. Furthermore, implementing partners protect U.S. interests because they deal directly with those in need, not with recipient government officials who may have agendas contrary to U.S. goals, such as ensuring gender equity.
“The use of established professional services expertise of the kind provided by U.S. development firms and voluntary organizations cannot be replaced effectively and expeditiously with cash transfers to foreign governments or local NGOs that are not prepared to handle them properly, efficiently or transparently,” Giannoni writes. “Cash transfers cannot replace U.S. diplomats, U.S. soldiers, or U.S. development professionals.”
