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USAID Administrator Samantha Power’s recent “New Vision for Global Development” address reinvigorated the conversation around aid reform. In her remarks, Power called for more inclusive and locally led development, including through the diversification of the USAID partner base, and by making the agency’s work more responsive to local voices.

To reflect on Power’s announcements, I sat down with Randy Tift who, between 2017 and 2021, co-led USAID’s Effective Partnering and Procurement Reform (EPPR) process and launched the New Partnerships Initiative (NPI), under the leadership of then-USAID Administrator Mark Green. Randy is currently a Senior Associate at Oxford House. He’s also working on an in-depth paper on the past and future of USAID’s reform agenda, which CGD will publish in early 2022. Randy is optimistic about what he sees taking shape at the agency and has some ideas for how to advance Power’s vision. (This interview has been edited for clarity and length.)

Sarah Rose: Administrator Power promised to put local voices at the center of everything USAID does and announced new targets to motivate progress toward that goal. She committed that within the next four years, at least a quarter of USAID funding will go to local partners—and that, by the end of the decade, at least half of agency programming would put local communities “in the lead.” What was your overall reaction to those announcements?

Randy Tift: I have confidence Administrator Power is moving in the right direction. In attempting to shift USAID even more toward locally led development, Power’s agenda represents continuation along a trajectory that’s taken shape over the past 20 years. While experience has shown that “two steps forward-one step back” is the best we can hope for in the “localization” of US foreign assistance, there are four reasons why I am hopeful for greater success this time around.

First, Power affirmed the reforms of her predecessors that worked and left a seasoned and capable team of USAID career staff in place to implement her vision. Best I can tell, she wants to build on the successes of previous reforms, with due attention to important lessons learned. Second, while the Administrator has painted a compelling vision, she’s left the details in the hands of capable USAID staff and other stakeholders (Congress, implementing partners, etc.) to shape. Third, there is greater influence on the “demand-side” of reform than ever before, with new and local partners eager to work with USAID. And fourth, traditional USAID partners appear ready to support a bold, but practical, reform agenda.

SR: That’s encouraging. Let’s unpack each of those a bit. Can you say more about the lessons learned you think experienced career staff will be paying close attention to?

RT: Some key lessons were drawn from experience with the reform effort launched by the Obama administration known as “Local Solutions.” A signature reform of Administrator Rajiv Shah, Local Solutions proved famously divisive. At the heart of the initiative was a target to channel 30 percent of mission funds through direct awards to local partners. In setting this target, USAID essentially told its established partners—large US-based contractors and non-governmental organizations (NGOs)—that the goal was to put local partners in charge of USAID funding and ultimately put traditional partners out of business. Some established partners genuinely got behind this goal, but many resisted to protect their business interests. Others paid lip service, but made few changes to their practice. A few openly made a principled case for why Local Solutions was impractical and would not empower the local partners it intended to help.

While Local Solutions deserves credit for advancing the principle of “country ownership” and modestly increasing the percentage of direct-to-local awards, it also created perverse incentives, focused more on compliance with USAID’s requirements than advancing local capacity to achieve development outcomes. Worse, in some cases, the burden of US compliance requirements ended up putting local partners that received direct awards out of business.

Under Mark Green, almost all the USAID staff that we assembled to design a new strategy to advance locally led development had worked on Local Solutions and all agreed: Don’t repeat it. Instead, they urged a multi-faceted plan which would become the focus of EPPR and NPI.

I don’t think Power is repeating Local Solutions, despite the reappearance of a target for direct local partnerships. Many stakeholders, even proponents of locally-led development, would have advised—and some did—not to set a hard target for direct to local awards. So why am I more optimistic this time around? Simple: because she’s building on where things stand today and preserving what works, while giving her team the space to define the metric. More importantly, she announced a second metric: that “By the end of the decade, 50 percent of our programming … will … place local communities in the lead to either co-design a project, set priorities, drive implementation, or evaluate the impact of our programs.” That objective—which represents the more holistic view of what it means to be “locally led”—matters more than the 25 percent target for local funding in my view.

And Administrator Power’s team gives the impression it understands that locally led development is not a one-size-fits-all proposition but that it will require every available tool in the toolbox—from collaborative design, simplified two-step solicitations, customized award types, to streamlined pre-award assessments, adaptive mechanisms, and post-award compliance support. It will require enhancing competition with well-aligned incentives to determine which partners offer the best solutions to make localization both more effective and more manageable. USAID’s competitions must incentivize delivery of solutions from innovators and beneficiaries themselves, rather than relying on the Agency to prescribe the answers. The team also knows that groups “on the ground” like the Movement for Community Led Development and other deep thinkers on how this can work are already out front.

SR: You sound optimistic that USAID has good people in place to shape the contours of Power’s vision—though there will also be an important role for external stakeholders, notably Congress, to play in the reforms’ success. Looking forward, what do you hope USAID leadership and staff, Congress, and others will keep in mind as they work out the details of implementation?

RT: As the agency moves forward, it will need to determine which internal policies require reform or clarification. But you can expect it will also look at what new authorities or flexibilities would strengthen its approach to localization—including those that require action from Congress or other parts of the Executive Branch (especially the Office of Management and Budget (OMB)). And, as past experience has shown, it will be vital that the agency align the incentives of its key stakeholders and its staff (some of whom prefer the old way of doing business) through a coherent reform agenda.

Practically speaking, there are a few steps I’d like to see from Capitol Hill. First, Congress should ask USAID to conduct an annual risk assessment and then monitor performance accordingly. Under Administrator Green, USAID’s risk appetite statement announced the agency would tolerate greater risk-taking in pursuing potentially innovative programming, but maintain vigilance on waste, fraud, and abuse. Responsible award management is essential, but to enable more innovative awards, improved staff performance, and greater local participation, lawmakers must back a more ambitious stance on risk. That’s going to be critical to shifting the agency away from its prevailing “culture of compliance” toward a culture of performance. Bipartisan authorizing legislation for the New Partnerships Initiative, introduced in the Senate by Senators Tim Kaine (D-VA) and Marco Rubio (R-FL), could be a good vehicle to recognize the importance of greater risk tolerance.

In terms of what leadership will need to pay attention to, one big thing will be prioritizing staff retention, not just relying on new recruitment and increased hiring authorityto fill gaps. Administrator Power has noted that managing a proliferation of smaller direct awards can burden the capacity of USAID staff who are stretched thin and has repeatedly argued for increased staffing, especially replenishing depleted numbers of contracting and agreement officers. But, as a starting point, USAID should focus first on retention and incentives for promotion, then the agency can work to bolster new staffing and recruitment. In 2018, USAID hired new contracting officers (COs) in what amounted to a 30 percent increase over the span of just 18 months, a record setting pace. But over that period, USAID lost the same number of foreign service COs to attrition. And losses have continued; the total number will soon drop below 100 COs in the field. Administrator Power urgently needs to empower foreign service leadership and rethink promotion policies in order to retain talented senior COs. The existing CO workforce is deeply strained; charging forth with a new localization plan that ramps up the burden on them without compensating measures risks a bigger break.

Finally, USAID’s leadership should seek more flexibility from OMB and Congress to allow the greater use of certain kinds of collaborative and adaptive partnering approaches that show promise in working with local actors. These approaches include awards that are well-suited for smaller and new partners, such as Fixed-Amount awards and innovation incentive awards. Regulations currently limit the use of Fixed-Amount sub-awards; we had formally requested OMB to raise the monetary threshold, but it seems that action got sidelined during the transition. USAID could also expand the already successful use of inception phases that enable an implementing partner to collaborate with USAID in redesigning implementation plans within the first year of an award. Shifting collaborative design to the field to engage more local partners and requiring local partner “feedback loops” to guide adaptation are both potential strategies. These methods could contribute to the basket of approaches that count toward the 50 percent “local voice” target and potentially transform local partners’ role in USAID programming. Based on signals from her team, much of this could be on the Administrator’s agenda.

SR: Bureaucratic change takes time. In many ways, reform is a generational pursuit that must span multiple administrations in order to take hold. And it sounds like you see this happening. Where do you see key elements of consensus or continuity across administrations in the reform agenda?

RT: I think there are some core areas of consensus we’ve seen emerge from recent reform efforts. First, the need to increase access to direct awards for new and local partners, which NPI has advanced through two-step solicitations, targeted co-creation, and customized awards with fewer barriers to entry.

Second, the importance of a mentoring role for traditional US partners. NPI asks US-based partners to sub-award 50 to 75 percent of total award funds to local partners, while using co-design, compliance support, and capacity development to equip these local sub-partners to lead in implementation.

Third, the need to streamline design of USAID’s projects and activities. EPPR overhauled USAID’s Program Cycle Policy, eliminating or reducing time-consuming processes to free up staff to engage in more meaningful field-facing local engagement throughout the Program Cycle. EPPR also prompted changes in how contracting and agreement officers’ representatives (CORs/AORs) carry out their responsibilities. The agency developed a new accountability system to improve oversight and skills-development that will assure effective award management becomes a top agency priority.

And fourth, the importance of a strategic approach to local capacity development. USAID, under Administrator Green, introduced a new metric on Capacity Building for Local Development, making it required reporting for all missions across sectors, and introduced the first-ever Local Capacity Development Policy to establish a principles-based approach to developing local partner capacity.

Administrator Power has signaled her continued commitment to these reforms initiated in the last administration. Early in her tenure, she told the Senate Foreign Relations Committee that NPI, along with Local Works, gets the Agency “off to a good start” on locally led development. The Administrator has asked all Missions to develop new two-year action plans for NPI, including targets for the capacity building metric as well as metrics on increased use of co-creation and increased use of new and underutilized partners. The current team has refined the Local Capacity Development Policy, a draft of which will soon be released. Leadership has also embraced our reforms to the program cycle and USAID is advancing work to streamline design-to-procurement planning. Enhanced accountability and training for award managers continues, as well.

SR: Earlier, you mentioned that past efforts to reform procurement and program design at USAID have been stymied by groups who feel their interests are not well represented—or even threatened—by proposed changes. How do you see this landscape now?

RT: As I mentioned up front, I’m encouraged by the surge in “demand” I see for reforms that lead to more locally led development. NPI catalyzed non-traditional partners to seek opportunities to partner with USAID. And the agency has responded, creating the WorkWithUSAID platform to meet a rapidly rising demand to train and equip new or potential development partners.

Support for reform is also found in new and “niche” partner coalitions. While stalwarts like the Modernizing Foreign Assistance Network (MFAN) have consistently advocated for locally led development in various ways for years, others have joined the call. The newest is Unlock Aid, a coalition of innovative tech firms that are calling for reforms that facilitate USAID partnerships with their highly innovative and often locally-led organizations.

Perhaps the largest factor in creating a more receptive development community has been the rapid emergence of the “decolonization” movement. Its adherents are largely local partners themselves, some with strong U.S.-based support linked to the various movements for diversity, equity, and inclusion. To the extent there is a consistent agenda behind the movement’s potentially disparate efforts, it seems to center around the demand for more US foreign assistance to go directly to host countries—ideally without intermediaries or strings attached. But moving further in that direction, at least in the near-term, will be enhanced by the support of USAID’s traditional partners, provided there are incentives to help them work differently. This shift will need to include traditional partners being more strategic and transparent in how sub-awards are managed to empower sub-partners to lead in implementation.

And traditional USAID partners do finally appear ready to support a bold, but practical, reform agenda. In a lengthy recent policy paper that a group of contractors delivered to USAID, their posture on localization was miles away from actions they took in response to Local Solutions a decade ago. Back then, contractors went behind USAID’s back seeking to kill Local Solutions on Capitol Hill. Many continued to grumble about NPI despite its more fit for purpose and accommodating approach to locally led development. Now, contractors appear more willing to consider a reality that USAID has begun to embrace: achieving enhanced autonomy and self-reliance of partner countries to “lead their own development mission” is more important than just achieving outcomes, and that there may often be tradeoffs between the two goals.

There might still not be a unanimous, full-throated embrace of this reform agenda, even as consensus takes shape among key executive branch, congressional, and many development partner stakeholders that this is the way forward. There are still partners—and even USAID career staff—determined to defeat it, or defect if reform goes too far. But a critical mass of support is forming.

Disclaimer

CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.

Photo credit for social media:

Martha VanLieshout/USAID