Recommendations and Actions
Few would argue that public organizations work best when they have one clear mission. Clarity of mission may be a government organization's single most important asset.(1) The Agency for International Development (AID) has been cited as a prime example of a failed exercise in mission-driven government, burdened as the agency has been by several different and sometimes conflicting missions.(2)
Reviewers inside and outside AID have documented serious problems in major agency programs and operations for more than a decade.(3) In 1992, a presidential commission recommended that the agency be merged into the State Department; a recent congressional task force and others have called for the agency to be abolished and to be replaced by other public or quasi-public entities.(4) While others have stopped short of recommending the agency's outright abolishment, the consensus of reviewers and informed commentators is that AID cannot continue to function as it has in the past.
Reinvention is not simply an option or a challenge for AID; it is an imperative. For reasons discussed in this and other sections of this report, the agency cannot succeed in reinvention without help from Congress and other agencies.(5)
The new administrator of AID, J. Brian Atwood, acknowledged the dimensions of the problem in testimony at his Senate confirmation hearing in April 1993:
We have confirmed what other studies have concluded: AID is burdened by a surfeit of goals and objectives, encumbered by excessive red tape, and beaten down by poor morale.
[I]t will not be business as usual at AID if I am confirmed for this position. The changes I will be proposing will be radical departures from past practices. [R]adical changes are the only way to regain the faith of the Congress and the country in an enterprise which is central to our nation's international agenda. We cannot afford to fail . . .(6)
The problem at the heart of all of AID's other problems, observers and employees agree, is that it is burdened by too many responsibilities and expected to accomplish too many objectives, particularly for an agency of its limited size and resources. In short, AID does not have a single, clearly defined and articulated strategic mission.
The Foreign Assistance Act of 1961, amendments to the act over a period of 30 years, and other laws affecting AID define nearly 40 different responsibilities to be carried out by the agency in the field of international development.(7)
Included among AID's statutory responsibilities are agriculture, rural development and nutrition; population and health; education and human resource development; energy; private sector development; integration of women into national economies; human rights; and environment and natural resources.(8) And the list grows. Recent legislation gave the agency responsibilities for aid to the former Soviet Union and Eastern Europe and authorized the use of development assistance funds for capital projects (including investment promotion).(9)
Varied policy directions and emphases promoted by successive administrations, AID administrators, Congress, and outside interest groups pressing their own concerns have compounded the problem of too many statutory objectives. By 1989, one agency document identified 75 different mission priorities.(10)
This accumulation has led to what the U.S. General Accounting Office (GAO) has described as "a complicated and incoherent set of objectives with no clear priorities."(11) The only consistent but widely criticized assignment of priorities has been accomplished through the use of spending earmarks imposed by successive Congresses.(12)
Commentators, including AID employees, also assert that the proliferation of responsibilities contributes to confused or conflicting messages about the agency's basic mission. GAO has concurred in that critique, stating that while each of the many statutory responsibilities has merit, the multiple objectives in laws implemented by AID create confusion as to Congress' intent for the direction of the foreign assistance program, add to the tension between the executive and legislative branches on program priorities, and make it difficult to hold the agency accountable for reaching any particular objective.(13) Among examples cited of AID activities at cross-purposes with long-term international development are the agency's direct promotion of U.S private sector interests and its implementation of Economic Support Fund programs focused on short- term geo-political objectives.(14)
Critics are virtually unanimous that so long as AID continues to exist, there is an urgent need for its basic mission to be clearly defined and its priorities and objectives to be simplified. It should be noted that in interviews and research on this topic, the terms mission, principles, objectives, strategy, and related concepts are frequently used interchangeably, suggesting a lack of agreement as to what these terms signify. The clear consensus in the past five years, however, is that AID cannot continue to do so many things and do them all well.
Comprehensive new authorizing legislation has not been enacted by Congress since 1985. The world has changed fundamentally in the intervening years. Numerous efforts to enact new legislation during that time have met with failure.(15) The result has been that annual appropriations acts have added responsibilities to AID piecemeal and assigned priorities at will through the earmarking process.
Discussions about AID's mission have intensified in recent years. They are occurring in several broader contexts. First and foremost are the changed geo-political circumstances of the post-Cold War period. Second, a high-level Clinton administration task force is reviewing the entire U.S. government foreign assistance structure, including AID, in light of current and emerging global conditions.(16) This study is expected to analyze the United States' post-Cold War foreign assistance policy, the roles and responsibilities of the agencies and organizations implementing that policy, the dispersion of U.S. programs overseas (including trade and export promotion activities), possible consolidation or elimination of overlapping and duplicative functions, improved interagency coordination of foreign assistance activities, and related issues.
As part of that review, Secretary of State Warren M. Christopher directed Deputy Secretary of State Clifton R. Wharton, Jr., to review AID's goals and objectives. Deputy Secretary Wharton and Administrator Atwood testified about the status of that report (known as the Wharton report) and the Clinton administration's review of all U.S. foreign assistance programs before a subcommittee of the Senate Foreign Affairs Committee in July 1993.(17)
The subcommittee chairman, Senator Paul S. Sarbanes, expressed a desire for expeditious completion of these reports to provide a basis for enacting new authorizing legislation.(18) Proposed congressional measures to authorize AID operations for fiscal year 1994 would require the President to submit a plan for reform of U.S. foreign assistance programs and AID to Congress within 60 days of the legislation's enactment into law.(19)
Secretary Christopher presented a fiscal year 1994 transition foreign assistance budget that he said would begin the process of redirecting U.S. foreign policy, establishing new priorities, and restructuring foreign policy institutions. U.S. foreign policy will emphasize three themes, implemented initially by a fiscal year 1994 budget submission organized around five objectives.(20) This focus on objectives, not just funding inputs, is a major departure from previous budget submissions.(21)
Administrator Atwood has publicly stated that his agency's primary mission should be long-term sustainable development with four strategic components:
--- aiding the environment,
--- addressing population and health,
--- building democracy, and
--- encouraging economic growth.(22)
He has spoken of the need for AID to carry out these responsibilities in partnerships with other government, non-government, and private voluntary organizations.(23) His redefinition of AID's mission corresponds in several important respects to recent congressional proposals for a new foreign policy framework, and provides a basis for productive dialogue with Congress on a new statutory foundation for AID operations.(24)
It bears noting, however, that challenges remain in implementing the administrator's redefined mission. He has expressed the view that AID cannot be all things to all people. He has also acknowledged the risks inherent in efforts to define a simpler mission based on sustainable development, a term that he recognizes "has taken on myriad meanings and has been invoked in many contexts."(25) Despite the comparatively small portion of the federal budget devoted to foreign aid, U.S. foreign assistance programs suffer from a lack of widespread public support.(26) In AID's case, this difficulty is compounded by its history of troubled programs and operations-- problems aggravated by the lack of a clear and coherent mission and a manageable set of priorities.
These factors underline the importance of explaining how the focus on sustainable development helps to simplify AID's mission, rather than to merely rebundle its current plethora of programs and objectives. A clear definition of this concept is important to develop the operational strategies needed to identify unrelated or non-essential programs and operations, and to conduct strategic planning.
Even assuming that AID does move in new directions, the agency is likely to be subject to external pressures from public and private sector groups and organizations that have benefited from AID support in the past. While there is broad support for simplifying AID's mission in theory, practical implementation will not be easy.
Due to budget cuts and adjustments to changed post-Cold War circumstances, AID's administrator has committed the agency to reductions in the number of programs, projects, and field missions currently operating in different countries.(27) It may be that this measure will be enough to make the agency's current roster of programs and operations more manageable. The administrator has also launched a review of agency programs and operational procedures.
An early result of this review has been to examine existing programs that facilitated movement of U.S. jobs overseas, and to put safeguards in place to prevent such programs from going forward in the future. It is not clear whether these steps, and the increased partnerships the administrator has described, will entail significant reductions in the overall number of agency programs and activities.
This question needs to be clearly addressed and resolved. It warrants serious scrutiny in view of several factors, including the agency's amply documented problems in managing its current array of programs, a shrinking personnel and budget resource base, and the availability of many other U.S. and international development organizations equally or better positioned to provide assistance to developing nations.(28)
In any event, without concerted and cooperative efforts by the executive and legislative branches to embody a clearer, more manageable AID mandate in law, and restraint in adding new legislative mandates beyond the agency's capacity to handle them, AID's future ability to effectively manage foreign assistance programs and its own operations cannot be ensured. The agency will continue to strain beyond its capacity to respond to challenges too numerous to be met. It will struggle to improve its serious internal management deficiencies while continued budgetary pressures threaten its funding base, and already-low levels of public support for foreign assistance erode further.
1. The AID administrator should conduct a zero-based, bottom-up review of all AID programs and operations, identifying programs and operations that (a) do not directly support a clearly defined mission of sustainable development, and (b) can be undertaken by other assistance providers with a comparative advantage over AID. Nonessential and redundant programs should be eliminated.
Past evaluations of AID programs and operations show that the agency cannot do all that it is trying to do now and do it well. It is not yet clear that doing the same number of things, but in fewer countries, will make AID programs more effective and produce better results.
In any case, AID needs a redefined mission and reduced and simplified operations. It also needs to make its limited resources go further through partnerships with other government and non-government assistance providers. An assessment of all AID programs and operations based on these goals, with clear operational strategies for accomplishing the mission and priorities defined by the administrator, should assist in identifying programs and operations that can be reduced, eliminated, or transferred to other agencies (consistent with the current governmentwide review of foreign assistance activities).
2. The administration should seek comprehensive new authorizing legislation to replace the Foreign Assistance Act of 1961, as amended.
While some redirection of AID programs and operations can begin administratively, the agency's reinvention can only succeed if it starts with a clear redefinition in law of a more focused, consistent, and manageable agency mission. The AID administrator's concept, subject to clear definitions of sustainable development and other critical terms, appears to be a formulation around which a consensus could emerge.
This reinvention process should also include the identification--for congressional elimination or transfer to other agencies--of any activities that do not relate to and directly advance AID's principal mission.(29) Such legislative action is urgently needed to permit AID to succeed with other reform initiatives and to engage in more effective long-term planning and resource allocation.
3. The AID administrator should develop a strategic vision of what the agency should look like as it enters the 21st century.
Private sector companies that have achieved the most success in managing organizational change are those that have developed the clearest messages about the need for change. These messages often appear in the form of vision statements that express the reasons for change and define a strategic vision of what kind of organization the company needs to become.
Vision statements describe how an organization must operate and the type of results that it needs to achieve. They operate to remind people of the organization's objectives, act as a gauge for measuring progress, and serve to motivate people on a continuing basis during efforts to accomplish major change.(30)
NPR agrees with AID's administrator that the agency must make radical departures from past practices if it is to succeed in the volatile and complex international arena of the future. As part of the task of recharting the agency's course, he should lead the process of developing a vision statement to guide the agency's strategic planning of the fundamental changes needed to accomplish that goal. Each agency component can then develop a vision statement proceeding directly from and supporting the larger agency vision.
4. The AID administrator should conduct a comprehensive review of all agency directives and other internal and public issuances to ensure that they clearly express the agency's mission, priorities, and objectives in clear, consistent, and accurate terms.
A process should be established to ensure that all internal and external agency publications express the agency's mission, priorities, and objectives. Reported findings of as many as 75 different priorities in agency guidance indicate that the agency has compounded its problems in the past by defining too many objectives for an agency of its size and resources to manage.
The efficacy of the new administrator's efforts to articulate a simpler, clearer mission depends in part on the completion of the Clinton administration review of foreign assistance policy and programs across the government. The administrator can implement his goals and priorities (i.e., to clarify AID's mission and streamline its priorities) to a limited extent without legislative reform--e.g., through clear and consistent policy guidance, resource reallocations, partnerships with other assistance providers, and other measures. Legislative reform, however, is critical to relieve the political and other pressures on AID to implement all the responsibilities and priorities found in current law.
The focus of the recommendations in this part of the report is on improving results. Cost savings may result from congressional action limiting the scope of AID's responsibilities, but no projections can be made at this time as to the likelihood or amounts of any such savings. Implementation of these recommendations should produce increased efficiency in agency operations. The actual fiscal impact of resulting changes depends on the nature and timing of their implementation, and cannot be estimated.
1. Osborne, David, and Ted Gaebler, Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector (Reading, MA: Addison-Wesley Publishing Company, Inc., 1992), pp. 130-131.
3. See, for example, "AID's Administrative and Management Problems in Providing Foreign Economic Assistance," Hearing, House, Committee on Government Operations, Subcommittee on Legislation and National Security, 97th Cong., 1st Sess. (October 6, 1981); U.S. General Accounting Office, AID Management: Strategic Management Can Help AID Face Current and Future Challenges, GAO/NSIAD-92-100 (Washington, D.C.: General Accounting Office (GAO), March 1992); The President's Commission on the Management of AID Programs (the Ferris Commission), Report to the President: An Action Plan (Washington, D.C., April 1992); and Joint OMB-AID SWAT Team, Improving Management at the Agency for International Development (Washington, D.C., 1992).
4. See, for example, Ferris Commission, Action Plan, p. 12; U.S. Congress, House, Report of the Task Force on Foreign Assistance, 101st Cong., 1st Sess. (February 1989), H. Rept. 101-32 (the Hamilton-Gilman report); and Hellinger, Stephen, Douglas Hellinger, and Fred M. O'Regan, Aid for Just Development: Report on the Future of Foreign Assistance (Boulder and London: Lynne Rienner Publishers, Inc., 1988), pp. 51-53.
5. See discussion in sections of this report titled "Reduce Funding, Spending, and Reporting Micromanagement" and "Establish an AID Innovation Capital Fund."
6. U.S. Congress, Senate, Committee on Foreign Relations, prepared statement, April 29, 1993.
7. P.L. 87-195, as amended.
8. Other responsibilities include: tropical forests; protection of endangered species; narcotics control; American schools and hospitals abroad; housing guarantees; Economic Support Fund implementation; promotion of democracy, restoration of peace, and justice reform; disaster assistance and rehabilitation; refugee assistance; special African and Central American development programs; promotion of U.S. land grant and other universities; and promotion of U.S. private- sector trade and business opportunities.
9. Support for East European Democracy (SEED) Act of 1989, P.L. 101- 179 (November 28, 1989), as implemented by Executive Order 12703 (February 20, 1990); FREEDOM Support Act, P.L. 102-511, Title II (October 24, 1992); and Jobs Through Exports Act of 1992, P.L. 102- 549, Title III (October 28, 1992).
10. Hamilton-Gilman report, p. 27.
11. U.S. General Accounting Office, Foreign Assistance Economic Issues, GAO/OGC-93-25TR (Washington, D.C.: GAO, December 1992), p. 8.
12. The term earmarking, as used in this report, refers to the process by which congressional restrictions are placed on how an agency is to spend appropriated funds. Funding is earmarked in different ways. Earmarking is discussed further in the section of this report titled "Reduce Funding, Spending, and Reporting Micromanagement."
13. U.S. Congress, Senate, Committee on Appropriations, Subcommittee on Foreign Operations, "Persistent Management Problems Persist at the Agency for International Development," testimony by Frank C. Conahan, May 1, 1992. See also GAO, AID Management, p. 10, and GAO, Foreign Assistance Economic Issues, pp. 4-5.
14. The Economic Support Fund (ESF) is used to provide assistance to other countries based on special economic, political, or security interests of the United States. Most ESF assistance is provided as cash grant transfers to help other countries improve their balance of payments; the rest is spent on commodity support to pay for imports of U.S. goods, and on development projects. Tarnoff, Curt, Foreign Aid: Answers to Basic Questions, Rept. No. 92-309 F (Washington, D.C.: Library of Congress, Congressional Research Service, March 25, 1992), p. CRS-2; Ferris Commission, Action Plan, p. 13; and Hellinger, et al., pp. 49-79.
15. See, for example, Nowels, Larry Q., Foreign Assistance and Congressional Debate: International Challenges, Domestic Concerns, Decisions Deferred, Rept. No. 92-371 F (Washington, D.C.: Library of Congress, Congressional Research Service, April 17, 1992), and Nowels, Larry Q., Foreign Assistance: Congressional Initiatives to Reform U.S. Foreign Aid in 1989, Rept. No. 90-236 F (Washington, D.C.: Library of Congress, Congressional Research Service, May 10, 1990).
16. Foreign policy professionals have called for such a review of this country's foreign assistance policy and programs in recent years. See, for example, Carnegie Endowment for International Peace and the Institute for International Economics, Memorandum to the President-Elect: Subject Harnessing Process to Purpose (Washington, D.C., 1992), pp. 18-19; and Ferris Commission, pp. 5, 10-11.
17. See U.S. Congress, Senate, Committee on Foreign Relations, Subcommittee on International Economic Policy, Trade, Oceans and Environment, prepared statement, July 14, 1993.
18. Interviews with AID employees.
19. U.S. Congress, House, A Bill to Authorize Appropriations for Foreign Assistance Programs, and for Other Purposes, 103rd Cong., 1st Sess., 1993, H.R. 2404, passed by the House in June 1993; and U.S. Congress, Senate, A Bill to Authorize Appropriations for Foreign Assistance Programs, and for Other Purposes, 103rd Cong., 1st Sess., 1993 (Draft).
20. Issue Brief, Foreign Aid: Clinton Administration Policy and Budget Reform Proposals, Library of Congress, Congressional Research Service (Washington, D.C.: 1993), pp. CRS-6-CRS-7. The themes of revitalizing the U.S. economy, modernizing security structures and encouraging democracy around the world will be organized around the objectives of building democracy, promoting and maintaining peace, promoting economic growth and sustainable development, addressing global problems, and providing humanitarian assistance.
22. Remarks to the Society for International Development (Washington, D.C., June 9, 1993); and Atwood statement for the U.S. Congress, Senate, Committee on Foreign Relations, Subcommittee on International Economic Policy, Trade, Oceans and Environment.
24. See, for example, proposed elements of a new foreign assistance policy contained in one pending House bill, H.R. 2404, and a proposed Senate bill to authorize appropriations for foreign assistance programs for fiscal year 1994. See also recent congressional reports: U.S. Congress, House, International Relations Act of 1993, 103rd Cong., 1st Sess. (June 1993), H. Rept. 103-126; and U.S. Congress, House, Foreign Operations, Export Financing, and Related Programs Appropriations Bill, 1994, 103rd Cong., 1st Sess. (June 1993), H. Rept. 103-125.
25. U.S. Congress, Senate, Committee on Appropriations, Subcommittee on Foreign Operations, prepared statement, May 26, 1993. Sustainable development is generally acknowledged to have become a leading principle in international development policy after the World Commission on Environment and Development chaired by Norwegian Prime Minister Gro Harlan Brundtland (known as the Brundtland Commission) featured it as a central theme of its 1987 report. The Commission defined sustainable development as a form of development that "meets the needs of the present without compromising the ability of future generations to meet their own needs." The World Commission on Environment and Development, Our Common Future (Oxford and New York: Oxford University Press, 1987), pp. 89, 43-66, 75-89. Considerable effort has gone into translating that definition into practical terms for action in various settings. See, for example, Toman, Michael A., "The Difficulty in Defining Sustainability," in Joel Darmstadter, ed., Global Development and the Environment: Perspectives on Sustainability (Washington, D.C.: Resources for the Future, 1992), pp. 15-23; Schmidheiny, Stephan, and the Business Council for Sustainable Development, Changing Course: A Global Business Perspective on Development and the Environment (Cambridge, MA: MIT Press, 1992), pp. 4-13; Brown, Seyom, International Relations in a Changing Global System: Toward a Theory of the World Polity (Boulder: Westview Press, 1992), p. 93; and Browne, Stephen, Foreign Aid in Practice (New York: New York University Press, 1990), pp. 39, 42, 148-151.
26. While the U.S. maintains the world's largest program of international development assistance, this country ranks next to last among developed countries in foreign assistance as a percentage of gross national product. The foreign assistance budget request for fiscal year 1994 represents only about 1.3 percent of the entire federal budget. On levels of public support, see, for example, a survey conducted for the Americans Talk Issues Foundation in December 1991, finding that 38 percent more people of those polled wanted to decrease spending for U.S. economic and humanitarian foreign aid than wanted to increase it. Kay, Alan F., Frederick T. Steeper, Hazel Henderson, Celinda Lake, and David J. Hansen, What the American People Want in the Federal Budget, Survey No. 18 (Washington, D.C., November 1992), p. 27; see also a poll conducted for the Rockefeller Foundation in December 1992, finding that support for U.S. foreign assistance has declined since 1986; Belden and Russonello, Americans and Foreign Aid in the Nineties: Report of Findings from a National Survey on Foreign Economic Assistance (Washington, D.C., February 1993), pp. 12-15; and Hamilton-Gilman report, p. 26.
27. On budget cuts, see "Clinton to Continue Foreign Aid Cuts," Washington Post (August 13, 1993), p. A13. See also Library of Congress, Congressional Research Service, Issue Brief, Foreign Aid: Clinton Administration Policy and Budget Reform Proposals. On the administrator's commitment to scale back AID operations see, for example, Atwood remarks to the Society for International Development, and statement for the Subcommittee on International Economic Policy, Trade, Oceans and Environment.
28. See, for example, Nowels, Larry Q., Foreign Assistance: An Overview of U.S. Aid Agencies and Programs, Rept. No. 93-361 F (Washington, D.C.: Library of Congress, Congressional Research Service, March 26, 1993).
29. The House Committee on Foreign Affairs recently suggested some examples, including closing or transferring the AID export promotion office to the Department of Commerce, and transferring certain AID exchange and scholarship programs to the U.S. Information Agency.
Other suggestions included review and clarification of democracy and human rights programs engaged in by AID and other agencies. H. Rept. 103-126, p. 2.
30. Hammer, Michael, and James Champy, Reengineering the Corporation: A Manifesto for Business Revolution (New York: Harper Business, 1993), pp. 148-158; and Senge, Peter M., The Fifth Discipline: The Art & Practice of the Learning Organization (New York: Doubleday, 1990), pp. 205-232.
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