Agency for International Development

Executive Summary

During the Cold War, the struggle between the East and West framed international politics and U.S. foreign assistance programs. Now that this period has ended, a new set of profound challenges to U.S. national interests has replaced the Cold War prism through which this nation viewed international events.

The U.S. Agency for International Development (AID) was created in 1961 to carry out this country's development assistance programs abroad. The astonishing scope and speed of global change has accelerated an urgent need for a reassessment of AID's ability to play an effective role in U.S. foreign affairs and in the field of international development.

AID currently employs about 4,000 people who support the work of missions in over 100 countries. The agency used an estimated 4,500 personal service contractors to design and implement more than 2,000 projects in fiscal year 1993. The agency administered a fiscal year 1993 budget of approximately $7 billion.

The National Performance Review (NPR) considered the threshold question of AID's future existence. Reasonable arguments have been made for AID's absorption into the State Department, or for its abolishment. The NPR has concluded that the problem driving all AID's other problems is the lack of a clear and coherent mission and manageable set of priorities in legislation governing its programs and operations. AID's abolishment or absorption would not cure this central fact about the laws now covering its bilateral assistance programs. With a simplified mission, clearer priorities, strong leadership, innovative thinking, and fundamental reform of its programs and operations, AID could reclaim its potential to be an effective provider of U.S. development assistance.

AID Administrator J. Brian Atwood assumed his post in May 1993 and designated the entire agency as a reinvention laboratory, the first agency to do so. By doing this, AID has committed itself to fundamental reform, with the goal of transforming the agency into a high-performance, results-driven organization that can respond effectively to global challenges. Under its new administrator, AID will focus its development activities on sustainable development targeted toward four critical areas: the environment, population and health, economic growth, and democracy.

The NPR has isolated seven issues for discussion in this report and made recommendations for further action on fundamental problems facing the agency.

The agency's core problem is that it is burdened by too many responsibilities and expected to accomplish too many objectives. AID does not have a single, clearly defined and articulated strategic mission. External and internal control mechanisms have combined to deprive it of needed flexibility to make good decisions, and weigh it down with time-consuming and outdated reporting requirements. It is, in short, wrapped in red tape.

AID's U.S. and Foreign Service National employees are among its most important resources. As the agency adapts to the challenges of transforming itself to meet post-Cold War obligations with diminished resources, it must reassess its basic workforce management and contracting policies.

AID must also expedite critically needed reinvention of key business processes by creating an innovation fund to finance investment in new, integrated management information and financial management systems. AID's project and program management system, a core business function of the agency, needs to better reflect basic principles of customer service, focus on results, decentralize management authority, link results to planning and budgeting, and eliminate rules and procedures that hinder the accomplishment of results and accountability.

AID also needs to eliminate duplication of effort and function and target resources toward areas and activities most likely to produce successful results. At issue is whether the agency needs to maintain a field presence in more than 100 countries, whether assistance programs contain adequate incentives for recipients to succeed and graduate from those programs, and whether resources that support AID missions can be put to more effective use through leveraging of services provided by other agencies.

Coincident with the administrator's designation of the entire agency as a reinvention laboratory, AID created a Quality Council to coordinate and initiate reinvention initiatives. Actions taken and planned by AID, and proposed in this report, will transform AID and make it more relevant to this country's post-Cold War foreign policy.

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