Foreign Aid Reform, National Strategy, and
the Quadrennial Review
Susan B. Epstein
Specialist in Foreign Policy
April 12, 2010
Congressional Research Service
7-5700
www.crs.gov
R41173
CRS Report for Congress
P
repared for Members and Committees of Congress
Foreign Aid Reform, National Strategy, and the Quadrennial Review
Summary
Several development proponents, nongovernmental organizations (NGOs), and policymakers are
pressing the 111th Congress to reform U.S. foreign aid capabilities to better address 21st Century
development needs and national security challenges. Over the past nearly 50 years, the legislative
foundation for U.S. foreign aid has evolved largely by amending the Foreign Assistance Act of
1961 (P.L. 87-195), the primary statutory basis for U.S. foreign aid programs, or enacting separate
freestanding laws to reflect specific U.S. foreign policy interests. Many describe U.S. aid
programs as fragmented, cumbersome, and not finely tuned to address the existing needs and U.S.
national security interests. Lack of a comprehensive congressional reauthorization of foreign aid
for about half of those fifty years further compounds the perceived weakness of U.S. aid
programs and statutes.
The current structure of U.S. foreign aid entities, as well as implementation and follow-up
monitoring of the effectiveness of aid programs, have come under increasing scrutiny in recent
years. Criticisms include a lack of focus and coherence overall, too many agencies involved in
delivering aid with inadequate coordination or leadership, lack of flexibility, responsiveness and
transparency of aid programs, and a perceived lack of progress in some countries that have been
aid recipients for decades. Over the last decade, a number of observers have expressed a growing
concern about the increasing involvement of the Department of Defense in foreign aid activities.
At issue, too, is whether USAID or the Department of State should be designated as the lead
agency in delivering, monitoring, and assessing aid, and what should the relationship between the
two.
Representative Berman, Chairman of the House Foreign Affairs Committee (HFAC), states on the
committee Website that foreign assistance reform is a top priority. In 2009, he introduced H.R.
2139, Initiating Foreign Assistance Reform Act of 2009. Similarly, Senator Kerry, Chairman of
the Senate Foreign Relations Committee (SFRC), Senator Lugar, Ranking Minority Member, and
others introduced a reform bill, S. 1524, the Foreign Assistance Revitalization and Accountability
Act of 2009. Other foreign aid reform legislation is expected to be introduced in 2010. The Senate
is likely to consider H.R. 2410, the House-passed Foreign Relations Authorization Act of 2010
and 2011, that includes language requiring a national strategy for development, as well as a
quadrennial review of diplomacy and development.
The Obama Administration, with support from Secretary of State Hillary Clinton, Secretary of
Defense Robert M. Gates, and USAID Administrator Rajiv Shah, announced action to seek
solutions to the problems associated with foreign aid and begin the process of reform. Secretary
Clinton announced in July 2009 that the Department of State would conduct a Quadrennial
Diplomacy and Development Review(QDDR) to address issues involving State Department and
USAID capabilities and resources to meet 21st Century demands. In August 2009, the President
signed a Presidential Study Directive (PSD) on U.S. Global Development Policy to address
overarching government department and agency issues regarding foreign aid activities and
coordination. Both are scheduled to be concluded in 2010.
This report will follow the activities in both Congress and the Executive Branch on foreign aid
reform, a national strategy for development, the QDDR, and the PSD.
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Foreign Aid Reform, National Strategy, and the Quadrennial Review
Contents
Introduction ................................................................................................................................ 1
Interest in Elevating Diplomacy and Development ..................................................................... 2
Issues and Actions During the George W. Bush Administration ............................................. 2
Issues and Actions During the Obama Administration ........................................................... 3
National Strategy ........................................................................................................................ 5
Legislation on Foreign Aid Reform ............................................................................................. 6
The Quadrennial Review............................................................................................................. 8
Congressional Action ............................................................................................................ 9
Executive Branch Action....................................................................................................... 9
QDDR Structure ........................................................................................................... 10
Timing of Report........................................................................................................... 11
Initial Concerns............................................................................................................. 11
The Presidential Study Directive on U.S. Global Development Policy ....................................... 12
Conclusion................................................................................................................................ 12
Contacts
Author Contact Information ...................................................................................................... 13
Congressional Research Service
Foreign Aid Reform, National Strategy, and the Quadrennial Review
Introduction
For years, many foreign aid experts have expressed concern about ongoing inefficiencies
associated with the overall organization, effectiveness, and management of U.S. foreign aid.
Specific problems most commonly cited include the lack of a national foreign assistance strategy;
failure to elevate the importance and funding of foreign aid to be on par with diplomacy and
defense as a foreign policy tool; lack of coordination among the large number of cabinet-level
departments and agencies involved in foreign aid, as well as fragmented foreign aid funding; a
need to better leverage U.S. multilateral aid to influence country or program directions; and a lack
of visibility at the cabinet level for the U.S. Agency for International Development (USAID) −
the primary administrator of aid programs. Also related is the debate among some lawmakers and
policymakers about how to strengthen USAID’s role in aid planning, decision making, and
implementation, as well as whether to designate it as the lead coordinator of all entities involved
with U.S. development and humanitarian assistance programs in Washington and in aid recipient
countries.
Regarding aid programs, some cite a lack of flexibility and responsiveness of aid programs to
react quickly to events and needs on the ground. Another criticism is a perceived lack of progress
in some countries that have been aid recipients for decades. And a growing concern, especially on
the part of the nongovernmental organization (NGO) community, is the increasing involvement of
the Department of Defense (DOD) in disbursing foreign aid, rising from 29% in 2001 to 60% in
2007 (including aid to Iraq and Afghanistan).1
The Foreign Assistance Act of 1961 (FAA), as amended (P.L. 87-195; 22 U.S.C. 2151 and
following, the main statutory basis for aid programs), is viewed by most development experts as
being outdated and not reflecting current international conditions. It contains an emphasis on the
Cold War and communism with a multitude of goals and outdated priorities and directives, many
of which have been appended piecemeal to the original act. In addition, Congress has enacted
over 20 other pieces of legislation establishing foreign aid authorities outside the FAA, adding to
the diffusion of aid responsibility and initiatives within U.S. foreign policy overall. Many claim
that the FAA needs to be rewritten in order to streamline and add coherence to a piece of
legislation that has been amended frequently since its enactment nearly 50 years ago.
Recommendations on rewriting the FAA include stripping foreign aid legislation of fragmentary
earmarks, aid restrictions, and aid procurement rules; refocusing aid on the core mission of
poverty reduction; and restructuring aid legislation to set development goals based, not on
outdated Cold War-era policy, but rather on the realities facing the United States in a post-9/11
environment.
A number of nongovernmental organizations, development experts, and policy makers are
pressing the 111th Congress and the Administration to takes steps to reform the U.S. foreign aid
program. Several actions have already begun, including introduction of legislation to reform
certain aspects of foreign aid, State Department announcement of a quadrennial review, and a
Presidential Study Directive (PSD) on U.S. Global Development Policy.
1 Excluding aid to Iraq and Afghanistan, DOD disbursement of aid amounts to 38% of total disbursements in FY2007.
For more detail, see CRS report Foreign Aid Reform: Agency Coordination by Marian Leonardo Lawson and Susan B.
Epstein, August 7, 2009, p. 5.
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Interest in Elevating Diplomacy and Development
Over the years, interest in diplomacy and development as foreign policy tools has crossed the
political spectrum. The terrorist attacks in 2001, however, highlighted a renewed interest in the
benefits of diplomacy and development working more effectively along with defense toward U.S.
national security goals. Both the Bush and the Obama Administrations, as well as Republican and
Democratic Members of Congress, have expressed support for strengthening these tools.
Soon after the 9/11 terrorist attacks, the George W. Bush Administration directly linked
diplomacy and development to national security interests of the United States and stated the
importance of elevating diplomacy and development to be more on par with defense. In its 2002
National Security Strategy the Bush Administration stated, “We will actively work to bring hope
of democracy, development, free markets, and free trade to every corner of the world.”2
Continuing that theme in the 2006 National Security Strategy, the Administration said,
“Development reinforces diplomacy and defense, reducing long-term threats to our national
security by helping to build stable, prosperous, and peaceful societies. Improving the way we use
foreign assistance will make it more effective in strengthening responsible governments,
responding to suffering, and improving people’s lives.”3 In the FY2007 foreign affairs budget
request, the Bush Administration stated, “There are no hard lines between our security interests,
our development interests, and our democratic goals.”4 Many observers, however, have
questioned whether the rhetoric has been matched by related policies.
Issues and Actions During the George W. Bush Administration
By the first term of the George W. Bush Administration, after years of declining aid funding,
there was widespread agreement that foreign aid was an important U.S. foreign policy tool and
reform of it would be necessary for aid to achieve optimal effectiveness in its contribution toward
U.S. foreign policy and national security goals. In August 2003, then-Secretary of State Colin
Powell and USAID Administrator Andrew Natsios released their Strategic Plan, Fiscal Years
2004 – 2009, Aligning Diplomacy and Development Assistance. Its mission statement said, “In
the coming years, the principal aims of the Department of State and USAID are clear. These aims
are anchored in the President’s National Security Strategy and its three underlying and
interdependent components – diplomacy, development, and defense.”5
The Bush Administration made several changes to the foreign aid structure, in addition to
significantly increasing its overall budget. The President’s Emergency Plan for AIDS Relief
(PEPFAR), the largest program targeting a single disease, was announced in 2003. In 2004, the
Administration established the Millennium Challenge Corporation (MCC), an independent
government entity that provides aid to countries that demonstrate good governance practices,
economic reforms, and the capability to use aid effectively. In 2005, then-Secretary of State
Condoleezza Rice announced the concept of transformational diplomacy and development to
2 The National Security Strategy of the United States of America, September 17, 2002, introductory statement by
President George W. Bush.
3 National Security Strategy of the United States of America, March 2006, p. 33.
4 United States Department of State, The Budget In Brief, Fiscal Year 2007, p. 1.
5 Strategic Plan, Fiscal Years 2004 – 2009, Aligning Diplomacy and Development Assistance, August 2003, p. 1.
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“enhance the accountability, effectiveness, efficiency, and credibility of foreign assistance by
introducing a system of coordinated planning, budgeting, and evaluation.”6
Transformational development resulted in what was commonly referred to as the F process. In
2006, Secretary of State Condoleezza Rice created the Foreign Assistance (F) Bureau and a new
position – Director of Foreign Assistance (DFA) – within the Department of State to more closely
align the U.S. Agency for International Development (USAID) budget and activities with the
State Department’s foreign policy objectives. The F process was to develop a coherent,
coordinated foreign assistance strategy; provide multiyear country-specific assistance strategies;
consolidate policy planning, budget, and implementation mechanisms to improve leadership in
aid activities; and provide guidance for other government agencies involved in aid activities. The
F Bureau developed a Strategic Framework for Foreign Assistance to align U.S. aid programs
with strategic objectives. The Framework guided the writing of the FY2008 and FY2009 budgets
under President Bush.
During the Bush Administration an increasing portion of total aid was being delivered by DOD,
largely due to the wars in Iraq and Afghanistan involving emergency humanitarian assistance, as
well as reconstruction and stabilization activities.7 DOD’s role in disbursing foreign aid has its
advocates and detractors in State, DOD and the NGO community. NGOs increasingly have
voiced their concern about people in military uniforms handing out American aid. Secretary of
Defense Robert Gates has stated in the past that DOD personnel do not have expertise or the
mission for delivering aid.
Issues and Actions During the Obama Administration
The Barack Obama Administration acknowledges the need to elevate diplomacy and development
and, at the same time, acquire the right balance with defense. Transitioning into the Obama
Administration, Secretary of Defense Robert Gates, a carryover member of the Bush
Administration, stated in early 2009 that there needs to be a balance with development supporting
diplomacy and working together with defense to achieve national security goals.8 In March 2009,
during the FY2010 budget resolution process, Secretary Gates called Senator Conrad, the
Chairman of the Senate Budget Committee, to lobby for increased allocations, not for defense,
but for the foreign affairs budget. The Defense Secretary told the Chairman that “it is in the
Pentagon’s interest to have a healthier foreign aid budget... and that there is a lot being spent out
of the Defense Department budget that should be spent out of the State Department budget for
Afghanistan and Iraq.9
6 Laura Wilson, Former Senior Advisor to Ambassador Randall Tobias, Director of U.S. Foreign Assistance and
Administrator, USAID, U.S. Department of State. See George Bush’s Foreign Aid, Transformation or Chaos, by Carol
Lancaster, Center for Global Development, 2008, p. 33.
7 In addition, DOD provides military assistance and training to numerous strategic partners around the world, as well as
emergency assistance to countries where natural disasters have occurred, such as the 2004 tsunami in the Indian Ocean
and the 2010 earthquake in Haiti. For more on Haiti, see CRS Report R41023, Haiti Earthquake: Crisis and Response,
by Rhoda Margesson and Maureen Taft-Morales.
8 Foreign Affairs, A Balanced Strategy: Reprogramming the Pentagon for a New Age by Robert M. Gates,
January/February 2009, Vo. 88, Issue 1.
9 Gates lobbies for more funds – for State, MarineCorpsTimes.com, posted March 30, 2009
http://www.marinecorpstimes.com/news/2009/03/military -gatesmoney -statedepartment_033009w/
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Secretary of State Hillary Clinton, emphasizing better integration of defense, diplomacy and
development, in July 2009 stated five approaches to smart power:10
• build stronger mechanisms of cooperation with our historic allies;
• lead with diplomacy, even with those with whom we disagree;
• elevate and integrate development as a core pillar of American power;
• coordinate and make complementary our civilian and military efforts where we
are engaged in conflict; and
• strengthen our traditional sources of influence, i.e., economic strength and power
of influence.
President Obama’s FY2010 budget stated that, “[It]reflects the Administration’s commitment to
strengthen diplomatic and assistance tools to address current and future challenges that impact the
security of the United States.”11
Additionally, some would argue, the Obama Administration indicated through its FY2009 foreign
assistance supplemental request of $5.0 billion (including Food for Peace) and its FY2010 foreign
assistance budget request of nearly $35.0 billion (33% higher than the Bush Administration’s last
foreign assistance regular funding request of $26.2 billion for FY2009), that it views U.S. foreign
aid to be of key importance.
On December 15, 2009, Secretary Gates sent a memo to Secretary of State Clinton proposing
shared responsibility and pooled resources for cross-cutting security assistance managed by DOD
and State. Two months later in a speech on security assistance, Secretary Gates stated that
“…whatever we do should reinforce the State Department’s lead role in crafting and conducting
U.S. foreign policy, to include foreign assistance, of which building security capacity is a key
part. Proper coordination and concurrence procedures will ensure that urgent military capacity
building requirements do not undermine America’s overarching foreign policy priorities.”12
In January 2010, Secretary of State Clinton outlined six steps that the Obama Administration is
already taking to improve the aid program. Key elements include partnering with aid-recipient
countries rather than dictating uses of aid; seeking a “whole-of-government” approach to
integrate more fully and coordinate development activities among all aid-implementing agencies,
but particularly those involved with defense and diplomacy; and targeting investment and
technical support in a few sectors, such as agriculture, health, security, education, energy, and
local governance. She emphasized that this does not mean the United States will give up long-
term development goals for short-term objectives, or hand over more development work to
diplomats and defense experts. “What we will do is leverage the expertise of our diplomats and
10 Smart power is the balance of hard power (coercive means such as military) and soft power (non-coercive means
such as public diplomacy and foreign aid) as they apply to foreign policy. U.S. Department of State, Foreign Policy
Address at the Council on Foreign Relations, July 15, 2009. http://www.state.gov/secretary/rm/2009a/july/126071.htm
11 A New Era of Responsibility, Renewing America’s Promise, Office of Management and Budget, p. 87, February 26,
2009.
12 Remarks as delivered by Secretary of Defense Robert M. Gates, The Nixon Center, Washington, D.C., February 24,
2010.
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military on behalf of development, and vice versa. The three Ds (defense, diplomacy,
development) must be mutually reinforcing.”13
These statements, arguably, contribute to the heightened interest in establishing clear foreign aid
goals, re-evaluating how effective aid programs are, and revamping how they are administered.
Policy makers increasingly recognize the role that foreign assistance can play as a foreign
policy/national security tool particularly within the current international environment
characterized by regional conflicts, terrorist threats, weapons proliferation, disease pandemics,
and persistent poverty. Reflecting this recognition, a number of recent high-profile studies have
recommended specific reforms. Out of 14 foreign aid reform studies, 9 studies recommended
elevating development to the level of diplomacy and defense, and 6 studies recommended
establishing a national strategy for aid.14
National Strategy
Several foreign aid experts and organizations assert that before foreign aid reform can be
successful, a national strategy should be in place to identify the goals for reform and to be able to
determine if reform is moving aid in the direction of those goals. The HELP (Helping to Enhance
the Livelihood of People around the Globe) Commission, a 21-member bipartisan commission
established by Congress in the Consolidated Appropriations Act, 2004 (P.L. 108-199), reported
that civilian foreign affairs would be well-served by imposing the same rigor to U.S. foreign
assistance planning that is required in formulating the nation’s security and defense policies.
These security policies are guided by long-term strategies, developed by the executive branch,
and presented regularly to the legislative branch. The Commission recommended requiring a
National International Affairs Strategy to further elaborate U.S. international affairs objectives on
both global and regional levels, as well as country-by-country. The proposed strategy would also
outline government-wide capabilities and assistance needed to achieve these objectives. This
strategy would cover all efforts funded by the International Affairs (150) budget function.15
The Government Accountability Office “recommends that the Secretary of State work with all
U.S. government entities involved in the delivery of foreign assistance to develop and implement
a comprehensive, government-wide foreign assistance strategy, complete with time frames and
measures for successful implementation. Involving other agencies in this effort could include
adopting key practices that we have found to sustain and enhance interagency coordination and
collaboration in addressing common goals.” 16
13 “Development in the 21st Century,” prepared text of the U.S. Secretary of State Hillary Rodham Clinton speech
delivered to the Center for Global Development in Washington, D.C., January 6, 2010.
http://www.state.gov/secretary/rm/2010/01/13438.htm
14 CRS Report R40102, Foreign Aid Reform: Studies and Recommendations, by Susan B. Epstein and Matthew C.
Weed.
15 Beyond Assistance, The HELP Commission Report on Foreign Assistance Reform, December 7, 2007, pp. 95-96.
16 Government Accountability Office, Foreign Aid Reform: Comprehensive Strategy, Interagency Coordination, and
Operational Improvements Would Bolster Current Efforts, April 2009, pp. 40-41.
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Legislation on Foreign Aid Reform
Many believe that mandating clear objectives for foreign aid, assessing whether or not aid is
meeting those objectives, and then reporting on the findings are essential requirements for
effective foreign aid reform. Establishing criteria and anticipated results for a more effective
foreign aid program will result in elevating the status of development as a foreign policy tool,
experts assert. Representative Berman states on the House Foreign Affairs Committee Website
that foreign aid reform is a priority; Senator Kerry (Chair) and Senator Lugar (Ranking Member)
of the Senate Committee on Foreign Relations, in a dear colleague letter, said: “In order for
foreign aid to play its critical role, we must ensure that it is both effective and efficient.”17
Legislation currently before the 111th Congress includes some of those basic elements. Some
have praised the measures as good first steps in reforming foreign aid. At the same time, others
have criticized the legislation for not going far enough toward overhauling aid in order to elevate
development’s status to where it can help toward reaching U.S. foreign policy goals.
Legislators have differing views on what is needed to adequately reform U.S. foreign aid, but
generally agree that reform is needed. Representative Berman believes repealing the Foreign
Assistance Act of 1961 and replacing it with a completely new act is necessary to achieve an aid
program that reflects the challenges of the 21st Century rather than the old Cold War mentality. A
new act could state the broad purposes of assistance, such as reducing poverty, advancing peace,
supporting human rights and democracy, building strategic partnerships, combating transnational
threats, sustaining the global environment, and expanding prosperity through trade and
investment. Flexibility in Washington through broader aid waiver and transfer authorities and
streamlined reporting requirements, as well as greater flexibility in providing aid to recipient
countries could also be considered. Transparency for the American public to see how their tax
dollars are being spent on foreign assistance is another possible goal. Additionally, Representative
Berman supports elevating and strengthening USAID to play a greater global development
leadership and coordination role.18
Senator Kerry, Chairman of the Senate Foreign Relations Committee, generally concurs stating in
a Senate report that “development is a third pillar of U.S. national security, but in resources and
stature, our assistance programs are poor cousins to diplomacy and defense. Bolstering USAID’s
relevance is contingent on three areas: (1) attendance at Cabinet meetings; (2) direct access to
OMB on USAID’s budget matters; and (3) attendance at all relevant National Security Council
meetings.” USAID also should take the lead in the field with the USAID mission director having
primary responsibility for coordinating all U.S. development and humanitarian assistance
activities in any recipient country, the report said. 19
Senator Lugar, Ranking Minority Member of the Senate Foreign Relations Committee, agrees
that USAID should be the leading development agency and urges building USAID capacity by
increasing its staffing and training. “To be a full partner in support of foreign policy objectives,
17 U.S. Senate, “S. 1524: Foreign Assistance Revitalization and accountability Act of 2009” Dear Colleague letter.
18 Concept Paper for Foreign Aid Reform, House Foreign Affairs Committee, July 23, 2009.
19 http://www.congress.gov/cgi-lis/cpquery/R?cp111:FLD010:@1(sr122):S.Rept. 111-122 for S.
1524, Foreign Assistance Revitalization and Accountability Act of 2009, February 2, 2010, p. 3.
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USAID must have the capacity to participate in policy, planning, and budgeting.”20 Both Senator
Kerry and Senator Lugar support creating an independent evaluation group to measure and
evaluate the impact of all U.S. foreign aid programs across all government entities.
In comparison, a House Foreign Affairs Committee concept paper from the Republican minority
states that comprehensive foreign aid reform should occur before increasing aid funding to avoid
simply relabeling authorities without addressing the real challenges. Rewriting the Foreign
Assistance Act of 1961 alone is not the answer, the paper states. Also, it notes that U.S. foreign
aid needs to end “top-down approaches,” giving aid to foreign government ministries’ budgets
with little real benefit to the poorest in the country. The Committee minority supports moving
countries from aid toward trade and investment programs; efficiency and accountability should be
required in determining the compensation of top staff of NGOs involved in foreign aid
implementation; multilateral aid program reform should accompany U.S. foreign aid program
reform; and objective criteria for assessing when aid recipient countries should graduate from
U.S. programs should be included in any aid reform, it says.21
Legislation involving foreign aid reform provisions before the 111th Congress include:
On June 10, 2009, the House passed the Foreign Relations Authorization Act, Fiscal Years 2010
and 2011 (H.R. 2410) that includes Sec. 302. Quadrennial Review of Diplomacy and
Development (QRDD). This measure would require the President to develop a national strategy
on diplomacy and development by December 1, 2010, conduct a quadrennial review every 4
years, and consult with Congress on developing the national strategy.
S. 1524, the Foreign Assistance Revitalization and Accountability Act of 2009, was
introduced by Senator Kerry, Senator Lugar and others on July 28, 2009. The Senate
Foreign Relations Committee reported the bill on November 17, 2009. It would re-
establish within USAID a Bureau for Policy and Strategic Planning (closed during the
Bush Administration and replaced by F) to be responsible for developing and formulating
development policy in support of U.S. policy objectives. The Bureau would ensure long-
term strategic planning for development policy and programs across regions and sectors
and would integrate monitoring and evaluation into overall decision making and strategic
planning. Within that Bureau the bill would establish an Office for Learning, Evaluation,
and Analysis in Development to develop, coordinate and conduct the monitoring of
resources and evaluation of programs.
The legislation seeks to strengthen and coordinate U.S. foreign aid overseas by directing
USAID’s mission director in each country to coordinate all U.S. development and
humanitarian assistance there. Furthermore, the bill would establish an independent
Council on Research and Evaluation of Foreign Assistance to objectively evaluate the
impact and results of all development and foreign aid programs undertaken by the U.S.
Government; and it would re-establish a center in USAID to build on what works and
learn from what does not.
The bill would improve USAID’s human resources capacity with new hiring and training
and, similar to H.R. 2139 (below), promote transparency regarding U.S. aid by requiring
20 Senate Foreign Relations Committee Holds Hearing on Foreign Aid and Development, July 22, 2009, p. 4.
21 Republican Concept Paper, Reform of Foreign Assistance for Economic Growth and Opportunity, Minority views,
House Foreign Affairs Committee fall 2009.
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the President to publish information, on a program-by-program basis and country-by-
country basis, in the Federal Register, including what projects are being implemented, as
well as their outcomes. This would allow American taxpayers and recipients of U.S.
foreign aid to have full access to information on foreign assistance expenditures.
S. 1524 also urges the President to participate in multilateral efforts for international aid
transparency, as established on September 4, 2008 at the Accra High Level Forum on Aid
Effectiveness.22
H.R. 2139, Initiating Foreign Assistance Reform Act of 2009, introduced by
Representatives Berman and Kirk on April 28, 2009 and referred to the House Committee
on Foreign Affairs, would require the President to develop and implement, on an
interagency basis, a “National Strategy for Global Development,” develop a monitoring
and evaluation system, and establish a foreign assistance evaluation advisory council.
Like S. 1524, the bill states the sense of Congress that American taxpayers and recipients
of U.S. foreign aid should have full access to information on U.S. foreign assistance, that
the President is required to publish on a program-by-program basis and country-by-
country basis information in the Federal Register. The bill urges the President to
participate in multilateral efforts to engage in international transparency, as agreed to on
September 4, 2008 at the Accra High Level Forum on Aid Effectiveness.
H.R. 2387, Strategy and Effectiveness of Foreign Policy and Assistance Act of 2009,
introduced by Congresswoman Ros-Lehtinen and others on May 13, 2009 and referred to
the House Committee on Foreign Affairs, states the sense of Congress that 1) the
Secretary of State and USAID Administrator should make funding decisions on the basis
of a long-term strategy that addresses national security, diplomatic, and foreign assistance
objectives and the needs of the United States, and 2) foreign affairs agencies’ budget
requests should be more effectively integrated with national security objectives, program
evaluation, and management. The legislation requires reports for both.
The Quadrennial Review
In recent years, some foreign aid and national security experts have suggested that interagency
cooperation on foreign policy objectives and improvements in U.S. national security with a
“whole-of-government approach” could emanate from a foreign affairs quadrennial review
process similar to DOD’s Quadrennial Defense Review (QDR) that assesses whether U.S.
national defense strategy supports U.S. national security objectives.23 In 2007, for example, the
HELP Commission recommended a Quadrennial Development and Humanitarian Assistance
Review (QDHR) to require that U.S. development efforts be reviewed every four years to
evaluate their effectiveness. According to the Commission, this review should propose any
needed changes to U.S. development objectives and how the government approaches them. The
contents of this document should influence both the National Security Strategy (NSS) and the
22 Ministers from one hundred countries (including the United States), heads of bilateral and multilateral donor
agencies, as well as leaders of nongovernmental organizations met in Accra, Ghana in September 2008 to improve
foreign aid effectiveness.
23 In 1993, DOD conducted its forerunner to the QDR— a bottom up review ordered by then-Secretary of Defense, Les
Aspin. The National Defense Authorization Act (NDAA) for 1997 (P.L. 104-201) ordered the first QDR. The National
Defense Authorization Act, FY2000 (P.L. 106-65) made the requirement permanent. U.S. Department of Defense,
Defense Link, July 11, 2001, http://www.defenselink.mil/news/newsarticle.aspx?id=44739
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National International Affairs Strategy (NIAS) and should be modeled on the Quadrennial
Defense Review. Reviews might also be conducted for other functions of civilian foreign
affairs.24
Many in the 111th Congress and the Obama Administration agree on establishing a quadrennial
review for the civilian foreign affairs agencies. While the President can establish a quadrennial
review without congressional action, having it in statute would ensure that a review will take
place every four years, regardless of future presidential priorities.
Congressional Action
The House-passed Quadrennial Review of Diplomacy and Development (QRDD) measure (Sec.
302, H.R. 2410), in conjunction with requiring the President to develop a national strategy on
diplomacy and development, would require the President to:
• conduct a review every 4 years during a year following a year evenly divisible by
four, to determine how well the national diplomacy and development strategy is
being met;
• report the findings of the QRDD to Congress and establish an independent panel
to assess the findings.
The measure calls for first quadrennial review to occur in 2013 and include:
• all elements of the national diplomacy and development strategy,
• roles and responsibilities of Federal departments and agencies how they will
coordinate and cooperate to implement the strategy,
• a projection of the budget needed to successfully execute the national diplomacy
and development strategy, and
• recommendations that are not constrained by the President’s budget request for
the coming year.
Executive Branch Action
On July 10, 2009, Secretary of State Clinton launched a new Quadrennial Diplomacy and
Development Review (QDDR), modeled after the Pentagon’s Quadrennial Defense Review. The
primary goal of the QDDR, according to Department of State officials, is to strengthen the
institutional capabilities of the civilian foreign affairs agencies to meet 21st Century demands.
The focus, they say, will be on the diplomacy and development tools that currently exist and how
to make them more effective, agile, and complementary. The review will also consider what State
and USAID capabilities will be needed in ten years, and what needs to be done to achieve them.
The intention, according to Secretary Clinton, is to elevate diplomacy and development as key
pillars of our national security strategy. Initiating the QDDR is just the beginning of a longer-term
process to institutionalize an ethic of review, analysis, and responsiveness, the Secretary believes.
24 Beyond Assistance, the HELP Commission Report on Foreign Assistance Reform, December 7, 2007, p. 96.
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QDDR Structure
Jack Lew, the Deputy Secretary of State for Management and Resources, is leading the QDDR,
along with Anne-Marie Slaughter, State’s Director of Policy and Planning, and Rajiv Shah,
Administrator of USAID, as co-chairs, under the direction of the Secretary of State.25 The co-
chairs established a QDDR team with senior level experts from State, USAID, and
nongovernmental representatives. The Secretary of State, in consultation with the QDDR team,
established five areas of strategic focus which became the five QDDR working groups. 26 They
are:
• Building a Global Architecture of Cooperation. This working group is exploring
what capabilities are needed to address global challenges and how to leverage
international partnerships to provide solutions. Within this working group are
four sub-groups: 1) bilateral mechanisms, 2) multilateral mechanisms, 3)
partnerships beyond governments, and 4) strategic communications and
technology.
• Leading and Supporting Whole-of-Government Solutions. This working group is
examining the institutional roles of USAID and the Department of State in
implementing interagency, whole-of-government approaches to U.S. foreign
policy; considering how to elevate and strengthen State and USAID in
Washington and in the field, including integrating key government agencies’
contributions such as civilian-military joint planning and coordinating of country
teams and field operations. Three subgroups include: 1) defining internal
State/USAID roles and promoting collaboration in policy, planning and solutions,
2) integrating contributions of key U.S. government stakeholders, and 3)
organizing in the field.
• Investing in the Building Blocks of Stronger Societies. This working group is
investigating the ability of State and USAID to have long-term impacts overseas
and how current approaches can be improved to promote economic growth, food
governance, and security. Two sub-groups are: 1) achieving development
objectives and 2) building security capacity.
• Preventing and Responding to Crises and Conflicts. This group is examining
conflict prevention and response and how development and diplomacy tools can
be quickly and efficiently deployed in a variety of situations and environments.
This group is considering the building of civilian operations capabilities for
humanitarian, stabilization and reconstruction challenges, as well as for civil-
military interaction and cooperation to partner more effectively with the
Department of Defense. Subgroups include 1) civilian capacity, 2) civil-military
interaction, and 3) targeting prevention.
• Building Operational and Resource Platforms for Success. This working group is
assessing what changes are necessary to allow the Department of State and
USAID to fully carry out their functions in U.S. foreign policy. Hiring and
25 Alonzo Fulgham, Acting Administrator of USAID, initially acted as co-chair on the QDDR before Shah was sworn
in as USAID’s Administrator on January 7, 2010.
26 Information on the five working groups was provided in a December 29, 2009 email from the Quadrennial
Diplomacy and Development Review Team, Office of Deputy Secretary Lew.
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training of personnel, budget planning and process reporting, contracting,
oversight and procurement systems are some of the elements being considered in
this group. Sub-groups include: 1) human resource strategic analysis, 2)
outsourcing and contracting analysis, and 3) resource management analysis.
Timing of Report
As of January 2010, reportedly, all working groups had submitted their interim reports and had
their interim reports reviewed with the QDDR chairs and co-chairs. The working groups’
findings will be summarized in one interim report that is expected to be sent to the House Foreign
Affairs Committee (HFAC) and the Senate Foreign Relations Committee (SFRC) some time in
April. The interim report will also be made available to the public. A final QDDR report is
expected to be completed and released in September 2010. That may be too late for it to have an
impact on the FY2011 budget and, with this year’s compressed congressional schedule because of
mid-term elections, it is unlikely that any related authorizations will be passed by Congress this
year. Some do, however, expect the QDDR to have an impact on the FY2012 budget and may
require new statutory authorities to be passed by the 112th Congress.
Initial Concerns
While many in the foreign policy and development community support having a quadrennial
review, some have expressed concerns. Foreign aid reform proponents fear that the QDDR could
be used as a stall tactic to wait for the review before passing a foreign aid reform package. Others
are concerned that it could be used to weaken USAID. Having numerous staff work on a QDDR
at a time when both the Department of State and USAID are short-staffed creates an opportunity
cost of what those staff members could otherwise be doing. Further, some development experts
are concerned that the quadrennial review will give a higher priority to short-term strategic
diplomacy goals over long-term development goals. And some question whether Congress will be
able respond to the findings by passing any necessary corresponding legislation to address the
organizational structure issues, perceived shortage of USAID skilled personnel, and aid funding.
Observers have cautioned against expecting too much from the QDDR. Both then-Secretary of
State Powell’s Fiscal Years 2004-2009 Strategic Plan (done in cooperation with USAID) and
certain past Defense QDRs, for example, resulted in wish lists with little attention paid to reality
and available resources, experts say. The possibility that a quadrennial review could be a one-time
exercise that does not result in elevating status and resources for diplomacy and development
causes some concern.
Those who are familiar with DOD’s QDR compare DOD’s ability to set priorities with the
difficulty that State and USAID have had in this area. The items and actions in DOD’s program
and budget (number of planes, number of tanks, more peace and stability in a war zone) are often
measurable. The civilian foreign policy agencies, on the other hand, cannot always easily judge
one country’s development being more important than another or measure sustainable economic
development. Since diplomacy and development success is harder to measure in four years,
particularly if a country that is transitioning toward democracy has a setback, or a civil or natural
emergency occurs, it may be more difficult to conduct a quadrennial review with clear
conclusions that can be built upon every four years thereafter.
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The Presidential Study Directive on U.S. Global
Development Policy
On August 31, 2009, President Obama signed a Presidential Study Directive on U.S. Global
Development Policy (PSD) authorizing a U.S. government-wide review of global development
policy (http://www.modernizingforeignassistance.org/blog/2009/09/02/white-house-joins-the-
party-on-development-policy/). This inter-agency review signals an interest in a more coordinated
and strategic approach to development policy. It will evaluate existing U.S. development
activities, going beyond the Department of State and USAID to include Departments of Defense,
Treasury, Agriculture and others in seeking to meet the complex challenges of the day, including
global poverty, hunger and disease, as well as conflicts in Iraq and Afghanistan.
The PSD process is co-chaired by National Security Advisor James Jones and National Economic
Council Director Lawrence Summers. An interagency committee representing 16 government
departments and agencies is conducting the study. The committee is chaired by the National
Security Council Senior Director for Development and Democracy, Gayle Smith. The
committee’s work will be reviewed by both the National Security Council and the National
Economic Council. While the final study, which is expected in April 2010, will be provided
exclusively to the President, the PSD team has consulted with House and Senate foreign affairs
committee staff and will consult with those committees in the future on the findings, according to
an NSC official involved with the PSD. Senator Lugar said in January 2010, however, that “it is
uncertain when, or if, we will know the outcomes of the PSD.”27
The PSD is being conducted at the request of the President to formulate a global development
policy for the entire executive branch, unlike the QDDR which was initiated by the Secretary of
State and is being conducted by the Department of State and USAID to improve their institutional
capabilities and resources. According to Administration officials, the two processes are
coordinated, complementary, and mutually reinforcing; senior officials leading the QDDR are
also members of the committee carrying out the PSD.28
Conclusion
Whether or not the 111th Congress addresses foreign aid reform depends upon the time demands
created by intervening domestic and international issues deemed by congressional leadership to
have higher priority, such as financial reform, climate change, or appropriations bills on both
House and Senate floors. Nevertheless, new foreign aid reform legislation is expected to be
introduced in 2010. Beyond that, QDDR interim reports and final conclusions, as well as the
conclusion of the PSD, may have funding implications for the FY2012 foreign affairs budget and
may create a need for new authorizing legislation in the 112th Congress.
Possible passage of legislation by the 111th Congress requiring a national strategy and putting in
statute the QDDR could provide a greater understanding of the costs and benefits of diplomacy
27 Speech by Senator Richard G. Lugar, Foreign Assistance and Development in a New Era, given at the Society for
International Development, January 28, 2010.
28 Emailed information from the National Security Council, December 30, 2009.
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and foreign aid. Building on those efforts, congressional action on foreign aid reform, whether in
the form of a “first step” measure or landmark legislation might, in the short run, improve the cost
effectiveness of foreign aid (with better monitoring and assessment of what works and what does
not) and provide more performance-related results in future years − efforts, perhaps, that
American taxpayers, national security experts, and development proponents could mutually
support.
Author Contact Information
Susan B. Epstein
Specialist in Foreign Policy
sepstein@crs.loc.gov, 7-6678
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