A Dawning of the Age of Development Inclusion? Advancing Power's Ambitious Agenda for USAID

As USAID marked its 60^th birthday this week, Administrator Samantha Power took the stage to outline her vision for the agency's future. Her tenure at the agency’s helm comes amid a growing number of global crises and increasing calls for a true reckoning with the standard operating procedures of donor agencies and institutions around the world—including at USAID. Power's remarks suggest she understands this context well. With commitments at the ready, she defined her vision around advancing more inclusive aid—by making it more accessible, equitable, and responsive. As part of this agenda, in music to many CGD staff ears, she described steps to elevate evidence-based programming at the agency.

Power’s tone was one of ambition tempered by humility. Past USAID leadership have sought to tackle similar objectives with only limited success. But organizational change is a generational pursuit, so it's encouraging that Power will seek to build upon past reform efforts while undertaking new ones.

Here we highlight four elements of Administrator Power's agenda, identify potential challenges on the horizon, and offer suggestions for realizing (and measuring) meaningful progress.

Directing resources to local partners

"Local voices need to be at the center of everything we do."

In its current form, USAID is fundamentally a procurement agency, channeling its funding through large, mostly US-based implementing organizations. This model has enabled the agency to manage more money with comparatively less staff. But it limits the agency's ability to engage directly with the communities it seeks to serve. Bureaucratic pressure to spend money quickly creates incentives for staff to pursue "tried and true" agreements with known implementing partners, well equipped to navigate the complexities of USAID procurements. It's hard for local partners to get a foot in the door. Power pointed out that as of 2017, 60 percent of USAID funds were concentrated in the hands of just 25 partners.

In addition, tight controls on implementing partner performance, adopted in the name of accountability, can limit local input during project design and implementation—orienting implementer performance toward USAID reporting requirements rather than achieving the development outcomes prioritized by local communities.

Past USAID administrators also sought reforms to encourage and enable more local partner engagement but encountered considerable roadblocks and made limited progress. In fact, as Power noted, despite significant attention from the last two US administrations, USAID funding directed to local partners grew only modestly from 4 to 6 percent over the last decade.

One of the key headlines from Power’s remarks was a commitment to direct "at least a quarter" of the agency's funding to local partners over the next four years. Power acknowledged the challenges. Working with local partners, she explained "is more difficult, time-consuming, and it's riskier." She also referred to USAID's processes as "onerous," noting that smaller, local organizations may lack things like in-house accounting expertise and legal counsel and that this can prevent them from partnering directly with the agency.

To many USAID observers, the target Power announced sounded familiar, nearly echoing a goal set by former USAID Administrator Raj Shah. In 2010, under the banner of "Local Solutions," the agency established a target of channeling at least 30 percent of mission program funds through local organizations by the end of FY2015. If it had been achieved, this would have tripled FY2010 levels. The agency made commendable progress toward the commitment but ultimately fell short at around 19 percent. (Note: For those following the math here, it appears the methodology USAID is currently using to measure direct local partnerships is different from that employed in FY2010, which estimated around 10 percent going to local partners rather than the 4 percent Power cited.)

But Power announced some specific moves intended to bolster USAID's odds of success.

In an effort to broaden the agency's partner base and break down the barriers to securing USAID funding, Administrator Power announced the launch of WorkwithUSAID.org, a "one-stop shop" for information about working with the agency and connecting current and prospective partners with experts who can help them navigate the process. The site could help address critical information barriers and allow traditional partners to act as a bridge between the agency and local organizations.

And, since partnering directly with local organizations is likely to require the agency to manage a larger number of smaller awards, Power pledged to expand the agency's capacity to do just that—including by empowering Foreign Service Nationals to take on a greater role in the process.

Absent from Power’s remarks was a description of how direct government-to-government (G2G) assistance might increase to help meet this target. Many functions USAID supports—including public health and education—are core responsibilities of partner country governments. Supporting governments in planning, budgeting for, implementing, and overseeing these functions should be central objectives where possible. But USAID has provided little G2G support, historically.

Far more ambiguous, but potentially interesting, was Power's promise to ensure that, by the end of the decade, 50 percent of agency programming would put local communities “in the lead.” She cited project co-design, priority setting, implementation, and evaluation as key stages where this engagement could occur. Ensuring local ownership over priority setting and program design is a critical complement to local procurement goals. Hiring local partners to implement projects is, at best, a partial move toward locally led development. In fact, near the end of the Obama administration, USAID began to walk away from its initial Local Solutions target, recognizing that the focus on direct local procurements detracted from bigger thinking about how to work with local actors throughout the program cycle. Better defining success in this dimension—for instance by clarifying what counts as meaningful local leadership—and articulating expectations for how staff would pursue these approaches will be important next steps for the agency.

Power’s announcements around local leadership come at an opportune moment with respect to congressional support for this agenda, reflected in recent authorizing legislation, a hearing convened by House Foreign Affairs International Development Subcommittee Chair Joaquin Castro (D-TX), and in greater flexibility and encouraging language included in the draft FY22 Senate Appropriations bill and accompanying explanatory statement. Congress will be a major factor in whether USAID achieves success in this endeavor. But while signs of growing support are encouraging, the siren song of spending directives can be powerful, and lawmakers haven't always been quick to embrace the need for greater risk tolerance. It's clear Power has been engaging Capitol Hill—and ongoing communication will be vital in the months and years ahead.

Increasing a focus on gender equality

"Empowering women and girls—an investment that pays huge economic and security dividends."

On the heels of the release of the first-ever US National Strategy for Gender Equity and Equality, Power announced a commitment to "at least double the percentage of USAID bureaus' work that advances gender equality” and report on these efforts. This announcement is welcome, particularly since the US has historically lagged behind other bilateral donors in allocating development assistance focused in this area. The portion of US aid that’s reported as principally focused on gender equality has never exceeded seven percent of official development assistance.

Translating a commitment to gender equality and broader inclusive development into practice requires hiring more people with the skills and expertise to address the challenges marginalized populations face. In the past, inclusion efforts have been stymied as USAID staff members, already overloaded with other duties and untrained in gender analysis, were also tasked with conducting new analyses, carrying out consultations with local communities, and more. As a result, inclusion-focused activities were often sidelined or poorly executed.

Now, every USAID mission will employ a Foreign Service Officer "whose primary focus is gender equality and inclusive development." The commitment reflects an understanding of the importance of expertise in gender dynamics and inclusive development and its centrality to the success of Power's proposed vision. CGD researchers look forward to hearing more about how these officers will be recruited and empowered to inform agency activities within countries.

Diversifying the USAID workforce

"If we want an Agency that reflects the best of what America has to offer...then we must prioritize the hiring and retention of staff that look like America."

Power noted with pride that—thanks to the work of the agency's career employees—she was able to sign USAID's first ever Diversity, Equity, and Inclusion Strategic Plan on her very first day in office. The agency, she pledged, would also welcome its first chief diversity officer. And by giving this new role a direct reporting line to the administrator, she promised to elevate these issues and help ensure they get the attention they deserve.

That attention is overdue. USAID employees don't fully reflect the spectrum of races, identities, and backgrounds that make up the US population. A Government Accountability Office (GAO) report published last year found men are still overrepresented among senior leaders at USAID. Meanwhile, the proportion of Black women employed by the agency actually declined between 2002 and 2018, even as the hiring of both men and women of other racial backgrounds increased.

Last year, CGD hosted an event in partnership with Women of Color Advancing Peace, Security, and Conflict Transformation (WCAPS), which featured the lead author of the GAO study and speakers from USAID. The discussion revealed that, in addition to updating hiring practices, the agency also needed to focus on the promotion of and support for people of diverse backgrounds—a point that Power also made.

Moving forward, the agency should set clear targets for improving workforce diversity and inclusion and commit to making anonymized workforce data publicly available disaggregated by ethnicity, religious belief, sexuality, gender, and other identities. (Some of us have previously argued this approach should be adopted administration-wide.)

Evidence-based decision-making as core to responsive development

"To make progress, we have to understand human behavior, gathering and applying evidence from the communities we serve."

One of the keys to responsive development is understanding the extent to which programs are working to achieve their goals. With a model evaluation policy paired with operational policy reforms to encourage its implementation, and units devoted to innovation and experimentation, USAID has sought to build a culture of evidence and learning. The agency has been recognized for its efforts to use data and evidence to inform its programming. These kudos are warranted, but the agency could go further—for instance, by expanding its use of experimental studies to understand the success of its own programming and requiring more consistent use of evidence in program design. From an inclusion perspective, GAO has critiqued USAID's limitations in implementing the Women's Entrepreneurship and Economic Empowerment Act, due in large part to data and measurement constraints.

While Administrator Power has asserted her commitment to using evidence to inform USAID's work, to date, the agency has lacked a high-level, empowered lead—focused primarily on evidence use and generation—to drive this forward. Thus, it was exciting to hear Power's announcement of a new behavioral sciences and experimental economics unit, headed by the agency's chief economist—who will occupy an elevated and expanded role.

USAID has demonstrated the value of using experimental economics to pilot, test, and scale innovative solutions to development through Development Innovation Ventures (DIV), which is designed to do just that. DIV's early portfolio achieved a 17-to-1 social rate of return! But DIV is a small window that funds external applicants, often disconnected from USAID's own programming—while the newly proposed office could help apply experimental approaches to more of the agency's portfolio. The elevation of the chief economist is also a promising step. Compared to institutions like the World Bank and peer agencies, such as the United Kingdom's Foreign Commonwealth and Development Office (FCDO), USAID's chief economist has been relatively disempowered, lacking budget and staff—a missed opportunity for better integration of evidence into USAID's work.

Of course, there are questions about how the new behavioral science and experimental economics office will operate in practice. Will its remit be primarily behavioral science, which is important but a subset of the types of experimental studies relevant for USAID programming? Or will it take a broader experimental lens beyond examining behavioral "nudges.”  What will its relationship be to the Office of Learning Evaluation and Research and other pieces of the agency (in bureaus, in missions, at DIV) with responsibility for evaluation? How will the office be staffed and what roles will staff play? (CGD fellows have been among those who have called for a cadre of centralized, deployable specialists to help missions identify opportunities for impact evaluations and manage their implementation.) Will the chief economist’s role (and the role of the unit’s staff) extend beyond managing experimental research to improving how USAID engages with evidence and providing more quality assurance over USAID programming? And with the chief economist’s role currently vacant, how will USAID ensure the person selected for the position has a skill set that encompasses research expertise, management, and an ability to navigate the politics of a large bureaucracy?

It’s clear that implementing Power’s bold vision will be challenging, but the tone she set in yesterday’s speech provides a strong starting point. The choice to emphasize inclusion and responsiveness—across USAID’s own workforce, the partners it supports, and its approach to data and evaluation—signals Power’s understanding of the need to interrogate and alter the agency’s traditional business model. And, if fully realized, the administrator’s vision would leave the agency better positioned to tackle some of the world’s toughest problems—from supporting pandemic recovery and future preparedness, to combatting climate change and fighting corruption.