US foreign aid and the war on terror

The article Speak softly and carry a big wallet (pdf) about the nomination of Randall Tobias as the new USAID administrator in the January 26th issue of The Economist highlights recent plans for restructuring the US foreign aid program and reviews some of the debate on the potential politicization of US development assistance. The article cites the CGD working paper “The Global War on Terror and U.S. Development Assistance: USAID allocation by country, 1998-2005,” by Todd Moss, David Roodman and Scott Standley.The Economist writes:

“But according to a recent study by the Centre for Global Development (CGD), a Washington think-tank, there is little evidence that the war on terror has greatly distorted America's aid effort. The money it has spent on Iraq, Afghanistan and Pakistan was mostly added to the aid pot, not pilfered from it, they argue.”

It’s important to keep in mind that, given the well documented pipeline effect for aid, it may be too early to pick up any significant changes in allocation. Our study assesses changes in USAID aid allocation in the three years since September 11, 2001, but actual changes motivated by the launch of the war on terror may still appear over the next few years. Even with recent public announcements, any changes in allocation criteria and systems may take a long time to become established and refined.